Finance expert to strategist: the evolving DNA of the CFO

The role of the CFO is ever-evolving. James Booth explains what this new era of the multidiscipline strategist means and how there is more potential than ever for CFOs to be the architects of change within business

The rise of big data, new tech, and digital media has seen the role of traditional CFOs evolve significantly over the last few years. In addition to finance and accounting expertise, CFOs are on course to become multidiscipline strategists who can harness big data, curate talent and manage cyber risks within their organisations.

Challenges Facing CFOs Right Now 

  1. Brexit

Around 75 per cent of CFOs worry Brexit could have a negative impact on business in the long-term, compared to just 9 per cent who don’t, according to Deloitte. Along with Brexit risks, weak demand and the prospect of tighter monetary policies are ranked as the top worries for CFOs in 2018. Despite high levels of uncertainty across the board, research shows CFOs are still highly focused on growth plans, and the level of desire to expand business over the next year is at its highest since 2009.

  1. Skills Shortages

According to research, 44 per cent of CFOs have reported recruitment difficulties and skills shortages in 2018. To add to the challenge, The Open University Business Barometer revealed a massive 91 per cent of UK organisations say they have had difficulties hiring skilled employees in the last 12 months.

  1. Rising Stress Levels

78 per cent of UK CFOs believe stress levels are set to rise in the next two years as workloads increase, business expectations grow, and companies face a lack of staff, according to Robert Half. Research also shows CFOs expect their finance teams’ workloads to increase, while 52 per cent are planning to hire interim staff as a short-term solution.

  1. Big Data

Research firm IDC predicts that by 2025, we’ll see 163 trillion gigabytes of data output every year. And a recent study by Accenture suggests that by 2020, 90 per cent of a CFO’s time and efforts will be spent on working with data scientists to turn data into actionable insights that organisations can use for strategic decision-making.

  1. Increased Cyber Security Threats

Studies from Verizon show that 59 per cent of cybercriminals are motivated by financial gain and are likely to target finance and HR – areas which fall into the CFO realm – suggesting CFOs are going to be expected to take a proactive approach to cybersecurity.

Top Five CFO Priorities for the Upcoming Year

In Q2 of 2018, CFOs listed the following as strong priorities for business in the following 12 months:

  1. 49 per cent say increasing cash flow is the top priority
  2. 47 per cent say reducing costs
  3. 37 per cent say introducing new products and services and expanding into new markets
  4. 18 per cent say expanding by acquisition is a priority
  5. 14 per cent say raising dividend or share buybacks

We’re harvesting more data from across the business than ever before.  This is, in itself, a positive as it allows us to make more informed business decisions, however, it has drastically increased workload as there is simply so much more information to analyse.  The nature of the accounting profession means that we’re well versed in the manipulation and interpretation of data, and it’s increased the scope of the finance team’s work within the business – particularly in SMEs.

  • Talent Shortages: Recruitment difficulties are being widely reported across sectors, with 91 per cent of UK organisations having trouble hiring skilled employees in the last 12 months. A massive 44 per cent of CFOs have reported recruitment difficulties this year, and these shortages are not exclusive to the UK. CFOs in Belgium cite scare labour as a great concern, while 67 per cent of executives in Japan face mounting skills shortages.
  • Cyber Security Threats: Financial gain is the top motivational gain for 59 per cent of cybercriminals, which means finance and HR are the most likely to be targeted. With both of these areas falling within the realm of the CFO, a proactive approach to cybersecurity is going to be expected as we move into the future.

Preparation for the Future CFO 

Prepare to be at the heart of the data revolution

The world is set to produce enormous volumes of data by 2020 and, according to the ACCA and IMA, finance teams will be tasked with accurately interpreting data to generate reliable, innovative insights for CEOs to take to board-level.

Prepare to become a talent curator 

In order to prepare new employees for the role of finance, CFOs are going to need to increase involvement in talent acquisition and retention within business. New recruits need to be adept in strategy, multitasking and tech. CFOs are also prioritising soft skills as a key element for future hires.

Prepare to tackle cyber-risks 

The growth of tech means risks to businesses are becoming increasingly complex. Future CFOs will be required to take a proactive approach to managing risk within the finance department, and the business as a whole. One report by NJAMHA shows four in ten finance chiefs currently own or co-own cybersecurity within their organisations.

Prepare to keep pace with a changing workplace

With the consumerisation of real estate becoming a global trend, more businesses are choosing an agile approach to office space to expand into new markets, reduce costs, increase networking opportunities, and improve staff happiness. At the same time, modern CFOs are developing the leadership skills to not only manage talent, but also implement development strategies that work across remote teams with geographic and language differences.

As I am part of a global business, I need to have quality time with my teams around the world to ensure they are on top of their workload. This can mean a working day that starts with calls/Skype meetings with our office in Sydney right through to similar contact with our offices in Texas and California.  The ease of communication enabled by tech is fantastic and brings companies together, although it can also create diary overload and a very long working day, which is something that needs to be carefully managed.