The Transformation Of The CFO

CFOs have always been critical to any business. The role owns both the technical reporting and commercial partnership functions. The former ensures accuracy in financial information, which is vital to every organisation, while the latter provides challenge and support to operational management. This ensures the strongest return possible from investment and pricing decisions.

This is not just transforming the role of a CFO, but also the type of talent that will succeed in it. One key element driving that change is digital transformation. According to a PwC global CFO survey the responsibilities for finance have grown in key areas, particularly in digital.

Of the CFOs surveyed, 73% believed that digitisation of the finance function is a high priority, with 44% forecasting their budget for digitisation to increase in the future as a result. The survey also highlighted that 18.5% of a CFO’s time is spent on digitisation, reflecting its significance within the role.

Adding Value

Many companies are keen to implement initiatives that cut across business functions and the CFO is strategically well-placed to lead such efforts. They are likely to be involved at the beginning, working with the rest of the business on objectives, as well as at the end, to judge whether these targets were achieved. They will also provide support through the course of the project, refining or finessing its implementation and using the insight they have gained to create the most successful outcome possible.

As a result, the days of hiring CFOs to tend to the finances alone are long gone. Another example of change is that today’s finance director is also expected to be an ethical standard-bearer for the organisation.

This status and knowledge of the financial priorities of the organisation gives CFOs a meaningful role to play in their companies’ ESG programmes. With CFOs involved, there can be a greater alignment between these ESG programmes and the company’s strategic and financial objectives.

Digital Era

With rapid digitalisation, the contemporary CFO is often asked to take on an additional role. This involves maximising returns on digital investments, leveraging Big Data, and swiftly adapting to disruptions.

Automation of mundane tasks, richer and more timely datasets, access to sophisticated analytic models and deployment of advanced visualisation tools can all combine to allow finance to gain prominence as the department that adds the most value. 

But the most significant challenge in recruiting the right CFO is finding people who really understand how to collect and use data. They must be digital storytellers able to persuade and communicate with the rest of the enterprise to drive the right conclusions and actions out of data-driven insights.

Bridging the Gap

Today’s CFO has clearly moved from being ‘the numbers person’. As their role expands, they must now be able to bridge the gap between strategy, execution and finding new sources of value for the organisation. How do you prepare financial leadership talent to fit this new model? There are three areas of possible focus: 

1. Strong leadership and business acumen: This can be developed through an MBA or leadership development programme, but early involvement in the company’s decision-making process will help. 
2. Broad and diverse experience: Finance leaders need exposure to different parts of the business. Leading change management initiatives or working in other functional areas can provide a rich development experience. 
3. Effective stakeholder engagement: This comes from exposure to the board and its committees, investors, analysts and the media. Finance executives need to ask for these opportunities so they can hone their communication and political skill. 

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