Written by: Yvonne Dias – Mint Group CFO
As a CFO to a top 1% global Microsoft system integrator, I am continually learning and collaborating to ensure that I stay on top of evolving trends to help my organisation and its clients transform through technology. From the last few finance and technology seminars I attended; a pertinent theme rang throughout a look into the jobs will no longer exist in 10 years. Processing jobs, accountants and lawyers always feature on this list, making me wonder how soon this will realise, and what will follow? Will the role of a CFO become redundant?
People often underestimate the human link and cognitive contribution of another human being. Therefore, I think not. I believe that, instead of disappearing, the CFO role will change and evolve over the next 3-5 years with the focus shifting from the production of numbers to the understanding and application of data-driven insights and trends.
While technology is transforming and automating processes at a rapid pace across industries, the ability to drive actionable strategic decisions that question the data and challenge all stakeholders does and always will lie with the CFO. Evolve to stay relevant.
I recently attended a course at the University Stanford, California, and drew great inspiration from the focus placed on ’The Emerging CFO’. The course reflected how CFO’s should prepare themselves to evolve to the new requirements in a rapidly changing world. CFO’s of the past were looked at for the technical skills and know-how to drive decision making. The new role comprises a more active role in challenging decision-makers to achieve the main business objectives across all focus areas, as depicted below.
But with a new role comes new challenges that CFO’s will need to address as they adapt to the changing world around them and evolve along with it. For this to realise, CFO’s should constantly focus on the bigger picture and keep the following four crucial aspects in mind:
1. Becoming a strategic CFO
How does a CFO and evolve from technical to strategic within the organisation and what skills changes are required? Studies, training and current work expectations encompass a CFO’s technical knowledge, so how do we evolve to analytics and become the driver within the organisation?
2. Balancing resources
A balance between cash and capital value is critical. The focus must be on making cash a strategic tool while still driving value through capital and investments. Amid tough market conditions, this is a hard-balancing act. How do we use technology coupled with strategic decision-making to render this process fluent?
3. The development of a financial leadership pipeline and financial-lead organisation
To become a financially-lead business means to become a data-driven business, and for this to realise, the CFO should deliver the correct data and analytics strategy, governance and data literacy. Thereby ensuring that the whole organisation is aligned and drive a data-driven culture is enabled.
4. Balancing short terms goals with long term goals
It is not always easy to make the long-term decisions needed when the short-term number are not there. It is imperative that a CFO uses data-driven insights and ML to help identify past trends that predict future behaviours to ensure that more accurate decisions are taken with a longer term view.
From the above challenges highlighted, the CFO evolution boils down to four main factors: technical knowledge is a given; CFO’s must challenge decision makers; strategies must be objective led; CFO’s must serve as decision-makers across all business areas.
This answers the question of how CFO’s will evolve: Data, People and Technology. Trends, insights and access to all internal systems allow data and analytics to be the heart of the organisation and must be woven into every single process and decision. For this to happen, data and analytics must form part of the DNA that is driven by executives downwards.
The role of a CFO is to maximise the data and analytics available in the organisation and drive continuous transformation by combining technology and finance and applying this across all business areas.
But how does the new role of a CFO change the persona required to be effective? How technical will the CFO of the future need to be? And what cultural shift needs to happen across organisations to enable the potential of the emerging CFO? These are some of the questions that CFO’s need to be spending time on and understanding.