Chameleon in the boardroom

The modern-day chief financial officer (CFO) is no longer solely responsible for holding the purse strings, but has a much more strategic role to play in a company’s long-term business plan.

For this reason, the CFO should now be a key figure in driving future change within organisations, according to business experts. The emergence of the so-called strategic CFO is hardly surprising given the influx of data and the rapidly shifting business backdrop that means organisations have to be alert to the various risks to a company and its employees.

Tim Briant, CFO at workforce solutions company Airswift, has seen the role of a CFO evolve so that it is now more of a strategic partner to the chief executive. “Hence why so many CFOs now ultimately become CEOs, such as PepsiCo’s Indra Nooyi,” says Mr Briant.

So it’s clear the CFO’s traditional remit of balancing the books has not gone away; it’s just had a layer of strategic analysis grafted on to it

“There are a lot of reasons for this,” he says. “Partly, it’s because enhancing shareholder return is now less a question of selling more, but about spending less. This is often the remit of a CFO.

“Also, while traditionally only areas that focused on financial reporting and compliance reported to the CFO, now functions with wider strategic impact on an organisation do too. IT, procurement and project management offices are good examples.”

Brett Morris, CFO at Olive Communications, agrees that over the past 20 years the CFO has shifted from being keeper of the purse to a trusted business partner and adviser to the chief executive.

“The focus of today’s CEOs is to build business value with a very outward-looking customer focus, leaving a gap for the CFO to fill, to play a more strategic part in the business, responsible for researching evolving markets, analysing trends and predictions, and customer sales interaction, so they have the insight and intelligence for CEOs to plan business strategy,” he says.

Doing more with less

While CFOs are adapting to the changing demands placed on them, companies are frequently failing to provide them with the resources required to carry out this new, more strategic role effectively.

Patrick Villanova, chief accounting officer at BlackLine, claims the job is being stretched like never before. “On the positive side, CFOs and finance directors have a more meaningful part to play in the company,” he says. “But on the negative side, it’s clear they are expected to do more with less.”

Mr Villanova points to a BlackLine survey which found that more than half of chief executives believe it is the CFO’s job to ensure accounts are correct. “So it’s clear the CFO’s traditional remit of balancing the books has not gone away; it’s just had a layer of strategic analysis grafted on to it,” he adds.

Barriers created by silos

Another issue for CFOs to contend with as they try to ensure the finance function makes a bigger impact across the wider business ecosystem is the siloed nature of company teams.

Nick Felton, senior vice president at MHR Analytics, points out finance and accounting are some of the fastest adopters of planning analytics, predictive analytics and even artificial intelligence (AI).

“Yet poor consolidation of data quality across large organisations is still holding financial directors back from achieving the business advantages they know are possible,” he says.

“Siloed working poses significant barriers to proper adoption of these technologies, even in accounting. A recent PwC survey showed the main challenges to implementation of customer analytics for 62 per cent of businesses were data silos or organisational silos.”

Any CFO will tell you that few things inhibit efficiency as much as siloed and static data, mainly because it is extremely limited in scope, according to Robert Douglas, Europe planning director at Adaptive Insights.

It is impossible to make truly strategic decisions with a partial view of the wider business environment, says Mr Douglas. “What CFOs and their businesses need is to integrate both financial and operational data into a single planning system,” he says. “This allows a collaborative, continuous and comprehensive approach to planning, where business-users and finance alike can access the data to plan, report and analyse.”

While it is important CFOs get buy-in from across a business, not everyone sees organisational silos as a challenge specifically for CFOs to overcome. Gurinder Sumra, CFO at global payments specialist Elavon Europe, does not think it is entirely true to say the siloed nature of large companies inhibits the efficiency of a CFO.

“While this is a challenge for how siloed divisions and functions in a large organisation collaborate, it is less of a challenge for the CFO. The numbers are still always visible,” he explains. “As long as the CFO’s team, even if embedded into those silos, comprise and partner with key decision-makers, we can influence the direction of the business.”

Day-to-day reality

To meet the needs of long-term business plans, as well as their day-to-day jobs, CFOs and finance directors need to continue concentrating on process optimisation, says Magali Michel, director at Yooz. “Regardless of their company’s size, they can now take full advantage of new technologies, such as AI, machine-learning and robotic process automation, which can offer tremendous efficiency gains,” she says.

Oliver Vaughan, CFO at Edenhouse Solutions, agrees that CFOs must embrace the potential digital transformation can offer. “AI can be a massive aid in removing those repetitive tasks that weigh many finance departments down,” he says. “Once automated, they can quickly get the numbers out and instead spend more time focusing on the decisions that matter to the growth of the business.”

For those CFOs who might assume they need to make new hires to deliver on the various demands being placed on their teams, then it might be as well to think again. “Machine-learning technology can cross-reference transactions more efficiently than a human,” explains BlackLine’s Mr Villanova.

This should help to minimise instances of human error or inaccuracies, which if they creep into a business process, such as order to cash, can be damaging. Mr Villanova concludes: “This technology liberates finance and accounting employees from admin too, allowing them to focus on turning data into usable insights. With this approach, you don’t need to increase headcount, you just redeploy your existing talent with even better results.”

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