The role of the CFO has changed. In the space of a few short weeks in 2020, they had to create completely new strategies and plans that would enable their businesses to maintain their stability throughout the upheaval of COVID-19. Even as the worst effects of the pandemic begun to ease, many of these plans have stayed, while others have evolved to meet new demands of customers.
Now, no longer is it just about cash flow management, financial reporting, understanding performance, safeguarding assets, and financial planning and analysis. The face of ever-evolving business operating environments has changed that. Today, a CFO’s role encompasses many more tasks and considerations, such as risk responsibility and technology investment, making the role much more complex.
But despite these changes, a CFO’s job does not have to be more strenuous or difficult.
If finance leaders could take away one key learning from the past 18 months, then it’s the importance of being able to make fast, accurate business decisions. In fact, according to Gartner, 27% of organisations that pursue a “sufficient versions of the truth” (up-to-date) strategy are 41% more likely to generate decision-ready data, and twice as likely to improve the quality of decision making and business outcomes.
Similarly, in a recent webinar, Dun & Bradstreet highlighted how 76% of CFOs said the role of the finance team would expand from core accountancy-based functions to include advanced digital and data analysis. This is certainly a step in the right direction, because in today’s digital revolution where big data plays a massive role, CFOs can integrate the best of human and machine intelligence to improve business performance.
Although, first and foremost, CFOs need to know how they should best integrate technology, as well as when is the right moment to invest in digital solutions that are evolving so fast.
Resource optimisation requirement
CFOs and finance leaders recently surveyed cited that they pursued automation of tasks over the past year as one of their primary responses to COVID-19-related economic disruption. This response must continue post-COVID as leaders that use technology efficiently and effectively can help reconcile their expanding workloads for the entire finance department.
However, the same CFOs and finance leaders surveyed also said that managing data is one of their most significant challenges. A notable 47% noted that their biggest challenge is using data to generate insights with minimal manual work, which points directly back to the inextricable relationship between data quality and automation capability.
Moving forward, finance teams must find the best solutions for managing data for automation to benefit the finance department’s workloads. From integrating data from disparate sources, maintaining customer records, and streamlining payments, better technological solutions such as data analytics and analytic rigor is a fundamental.
The pandemic drove home the importance of generating insights that help finance leaders manage various risks — such as macroeconomic and credit risk — and improve forecasting capabilities. And with data analytics implemented across the business, CFOs can much better evaluate risk – a task that falls under their remit more often now.
In fact, today, nearly 80% of CFOs are now directly or indirectly responsible for enterprise risk management - including internal and external risk. This responsibility - combined with growing threats can be demanding. However, through technologies such as artificial intelligence and machine learning, CFOs can help identify risks much faster, such as a high-risk supplier.
Consistent risk decisions are increasingly important against the backdrop of uncertainty environments – like Brexit and the pandemic. Turning to innovative technologies to help surmount these difficulties will not only alleviate time constraints but leave finance departments to work on tasks that instead require human intelligence, such as providing guidance – based on data analytics – to internal and external stakeholders, including other C-level executives.
Data driven strategies
As circumstances continue to shift, CFOs need to be able to make data driven strategies by connecting business intelligence from multiple sources of data. That way they can have a much greater understanding of who they’re doing business with to manage the customer/supplier portfolio more effectively.
With the help of experts such as CTOs and technology partners to identify the right systems and tools to improve the use of data, CFOs will be able to make accurate real-time strategic decisions, and fast.
The weight of the digital revolution and big data now sits firm on CFOs shoulders. They need to invest in data strategies, and fast. The finance department’s traditional role is no longer and could cost a business their commercial advantage if operations aren’t adjusted to fast paced business conditions. While the job role may have changed – with the right technology – it has never been more exciting.