By Louise Patrick, Chief Financial Officer at ActionZero

The role of the Chief Financial Officer (CFO) has changed rapidly over the last five years.

This change has been accelerated by the introduction of new technologies as well as the disruption caused by the pandemic.

CFOs are required to adjust how they think, lead, and operate, as innovative technologies arise. While the traditional roles of cost management, controls and acting as the conscience of the organisation are still important, so much more is expected of the CFO in today’s working environment.

 

Evolution is key to success

They must constantly be aware of emerging trends and strategies such as evolving technology solutions, the evolution of data analytics, the increasing role of technology and automation and, of course, global regulations.

And change doesn’t stop there.

CFOs are also required to manage traditional mandates such as corporate reporting, as well as overseeing digital transformation and growth initiatives with additional focuses on non-financial reporting.

The acceleration of the digital era has enabled the financial team to benefit from a new range of capabilities.

Most of a CFO’s time is no longer spent recording and verifying numbers, but instead is spent on analysing the figures, including past, current, and future trends. In fact, almost 60% of finance tasks are now automated as opposed to 34% seen three years ago.

Technological advancement has allowed CFOs worldwide to change the way they think about business problems and better manage those that may impact the future of their business.

Making this tech-enabled transformation for strategic planning one of the biggest priorities for CFOs today. Analytics is helping CFOs drive operational insights faster and easier, thus, creating a competitive advantage.

Influencing the C-suite

Previously finance teams focused on the short-term performance of the business, however, in order ensure company growth, focus has shifted to a long-term.

CFOs must re-think how their teams work to align with the businesses needs in the everchanging business environment. This change has given rise to the “soft” side of leadership from CFOs as there is an increased focus on emotional intelligence as they aim to put together a team with diverse skills and thinking styles, while collaborating and influencing across the C-suite.

No longer an isolated role, CFOs must work across various functions. Increasingly, finance teams are not only needed to perform financially but are often required to collaborate with various teams, from investor relations, to procurement, to sustainability and data analytics.

CFOs are also often involved in operations that relate to human resources, marketing, legal compliance, etc. so that they can push for cost efficiencies and new business regulations which leads to a more influential role from the CFO in enacting change within the business.

 

Driving a fluid finance operating model

Finance leaders sit at two increasingly complex worlds – one inside the business and one outside the business.

When businesses consider global expansion, the finance team plays a particularly vital role. CFOs must understand the regulatory conditions to help identify the best strategy for potential investment opportunities within new markets.

COVID-19 has changed the way that finance teams function because of a home and office working environment and it is likely that with this change and coupled with the growing tech industry, that we will see a greater shift in the CFOs role the coming years.

A CFO must understand the changing face of the payments industry, how different solutions work, what is best for the industry in which they are employed, and how to implement modern technologies with minimum disruption and inconvenience.

As efficiencies are created and finance functions adapt their talent models and effectively embed technology, the CFO and CIO are likely to become increasingly aligned over the years ahead.

Now, a key challenge for CFOs is that data systems and their hierarchies often do not reflect business structures or reporting needs. At the same time, the business continues to change, which means that technology plays catch up and finance spends significant time reworking data in spreadsheets.

CFOs also need to be prepared to drive a smarter, more fluid and open finance operating model. As the digital era continues to accelerate, the performance of markets is fundamentally changing and we may see the evolution of superfluid markets, as new technologies converge to eliminate more and more inefficiencies and frictions.

 

Now is the time to reframe value

Finance leaders must navigate external issues such as geo-political changes, environmental, regulatory, competition, technological innovations and new markets which now affect their business. These strongly compete with traditional accountability to boards, shareholders, employees, and customers.

This was further accelerated by the pandemic, with 79% of CFOs surveyed compelled to ramp up organisational transformation because of the past year

Since the onset of the pandemic the changing nature of the role of the CFO has been seismic. There has never been a better time for CFOs to reframe what value really means for their organisations, and similarly set out their stall when it comes to the future of finance and what that should look like.

Smart investments in technology and innovation together with a renewed focus on talent attraction and retention have never been more important for organisations as they respond to disruption with agility.