How the CFO Role is Changing — and What it Means for Your Organization

It’s a new day for middle-market CFOs, who have traditionally been viewed primarily as number crunchers and financial risk managers. The role is changing significantly as organizations rely on CFOs as strategic leaders central to corporate planning and decision making.

CFOs will still perform foundational tasks like budgeting, financial reporting and cash flow management. However, it’s no longer enough to just be the financial steward of the organization. The modern CFO is expected to bring strategic ideas to the C-suite table while developing and executing the company’s strategic agenda and helping effect change throughout the organization. This expanded role requires a new skillset for many financial professionals.

Transformed by Technology

The role of the modern CFO is being transformed by technological innovation and access to massive amounts of data, both inside and outside the organization. They need to lead the charge in these new technologies and be the change agents controlling the pace of change throughout the company. Those successfully do so will become the key source for data-driven decision making and drive their organizations to be more agile, dynamic and successful.

There are three key technologies leading this transformation:

  1. Automation — Automation of the financial function is typically the first step in technology transformation. According to a study conducted by McKinsey Global Institute, 42% of a finance team’s processes can be fully automated while another 19% can be highly automated. Finance activities that lend themselves well to automation include:
  • General accounting operations
  • Accounts payable
  • Accounts receivable
  • Payroll
  • Financial controlling and reporting
  • Tax processes

By automating these functions, the finance team frees up significant time and resources to focus on driving strategy and change throughout the company.

  1. Data visualization — Pairing automation of financial and operational functions with the use of data visualization tools provides access to valuable real-time data.

Businesses often lack easy access to data because it’s located in different systems that don’t easily communicate with each other. Data visualization software pulls raw data from various sources and organizes it. This allows for the generation of clear, timely and actionable visuals that can be used to enhance decision making.

  1. Analytics — Automation helps streamline processes. Data visualization provides real-time information. Data analytics is the advanced analysis of vast quantities of data to make informed, tactical decisions and identify growth opportunities. The companies that can strategically leverage data will be tomorrow’s market leaders.

Wearing Lots of Hats

This seismic shift of the finance function means that CFOs must wear many different hats. With a keen focus on driving the strategic agenda throughout the organization, the CFO knows what areas need the greatest investment and where resources need to be allocated to drive the greatest value.

Today’s CFO also must work hand in hand with the other members of the C-suite to develop an integrated approach to the business and a broad understanding of the organization’s entire value chain. This includes:

  • Human resources to help drive the talent agenda
  • IT to drive technology transformation throughout the organization
  • Operations to optimize efficiency in the supply chain, logistics, production and procurement functions
  • Sales and marketing to enhance visibility and target customers

Becoming a Forward-Focused Leader

While the CEO remains the visionary leader of the company, the modern CFO helps pull all the different pieces together. This has resulted in a more forward-focused leader and the chief executive’s most essential strategic partner, influencer and change agent.

Talk to an advisor to learn how we can help you harness the power of data and digital solutions to overcome barriers and transform your role as a financial leader.

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