The modern chief financial officers (CFOs) skills set has become broader. To explain and make sense of complex financial data, CFOs are increasingly expected to possess strong analytical and communication skills. They are also required to master areas outside finance including regulation, risk management, business transformation, supply chain management, reporting, human capital management and finally, IT.
The evolving CFO–CEO relationship is pushing CFOs to play a more active leadership role and reconsider their traditional approaches to overcoming cost pressures, identifying inefficiencies and finding new investment opportunities. It comes as no surprise, therefore, that today’s CFOs are pressured to enhance their skillset. In this digital age, CFOs are expected to increasingly rely on the automation of key business processes and relying more on technology to transform data into actionable insights.
These newly required skills don’t just present challenges but also opportunities as they allow aspiring CFOs to stand out. However, many companies aren’t ready yet to attract the talent they need. Investment in systems and processes hasn’t evolved with the changing demands of the CFO role and having the necessary skills to take full advantage of data isn’t always an HR priority
Preparing your accounting talent for finance leadership
According to a Finance Talent Survey carried out by Deloitte in 2013, 40% of CFOs were pessimistic about their ability to meet talent acquisition demands in the future despite expanding their recruiting strategies.
Since then, there has been a drive to upskill within finance and accounting departments. Given that the median annual salary for a typical CFO stands at £95,000 per year according to Payscale, the rewards for ambitious professionals are clear. What’s less obvious is the most suitable path to securing tomorrow’s CFO roles. Being a CFO means providing business insights that can shape corporate and sales strategy and must involve familiarity with the systems that provide those insights.
One thing has become clear: technology is deeply entangled in the finance function. From big data to the cloud, technology is changing the way accountants and finance professionals do business. The modern CFO candidate will need to be able to articulate the risks and benefits of cloud applications and the software-as-a-service (SaaS) model, big data analysis, cybersecurity, and other innovations now transforming the finance industry.
The spreadsheet culture still dominating finance environments can be detrimental to candidates.
The need for a technical skill set with a focus on cloud
Finance teams using the cloud and adopting solutions such as enterprise resource planning and/or corporate performance management, are in a better position to build their own future stars or recruit top talent. Ambitious finance professionals want to work with the latest technologies to build their data-driven decision-making skills.
Cloud applications are quickly becoming the norm in all business roles. Whether yours is an SMB or a Fortune 500 company, the move to the cloud is the direction everyone is heading in – and finance is no exception.
An example of this is the case of private equity firm Electra which built an office of finance from scratch using cloud ERP as a tool. Electra’s financial controller in charge of the project recognised the importance of cloud technology and of fully acquiring the skills of the ERP solution to become self-sufficient – and better position themselves on the path to CFO.
There are many proven savings and productivity benefits that the cloud brings. Examples include, improved business security to better service availability, from easier compliance requirements satisfaction to IT cost reduction. According to a report by Integrel, 67% of IT professionals use cloud services and applications, while cloud deployment is up to 40 times more cost-effective (Forbes) for a small and medium-sized business. Hence, 56% of organisations are a seeking to hire staff with cloud expertise according to a report by Channel Times.
A CFO’s DNA – more than just finance
While it may not be necessary to become experts in IT – finance leaders will need to acquire skills around data retrieval, interpretation and analysis. Digital intelligence alone, however, won’t make you CFO material; but prospective CFOs should also be looking at the necessary experience to use fintech.
CEOs and boards already expect CFOs to be strategic advisers on how best to grow the business, as well as protecting the bottom line. In five years, as that expectation increases, CFOs will need to demonstrate a more multidisciplinary skill set and broader career experiences, from holding more operational positions to working overseas.
Roles in finance are already pivoting towards performance management and data analysis, while new responsibilities in scenario planning, modelling and simulation are on the rise. Demonstrating commercial insight fused with digital know-how is crucial for aspiring CFOs, who will be expected to guide, if not lead outright, wider business initiatives like process reengineering, change management, and data governance.
Finance teams should invest in people with the appropriate capabilities to help the business deliver on its strategy. Part of that means supporting current teams with the tools and training to deliver higher-value and with strategical insights. For aspiring CFOs, finding work environments where this is the norm will be essential to career success. The days of the one-dimensional CFO are long gone.