Digital Transformation » Financial expert to strategic partner: The evolving DNA of the CFO

The rise of big data, new tech, and digital media has seen the role of traditional CFO evolve significantly over the last few years. In addition to finance and accounting expertise, CFOs are on course to become multidiscipline strategists who can harness big data, curate talent and manage cyber risks within their organisations.

In Q2 of this year, 49% of CFOs said increasing cash flow was their top priority in the next 12 months, while 47% said reducing costs was key. Another 37% said introducing new products and expanding into new markets would be the focus. With CEOs expecting more input on business direction and strategy from their CFOs than ever before, the role of traditional financial expert is set to evolve into something much bigger to achieve these goals.

By 2020, financial directors will be helping CEOs bridge the gap between strategic and operational decision-making by owning data and analytics. This is no small feat considering British business plans to increase average spending on advanced analytics by 26% to £24 billion. And while the question of who should own analytics remains open across sectors, a report by Deloitte makes a strong case for CFOs to take on the mantle. In ‘How CFOs Can Own Analytics’, research shows the area most often found to invest in analytics within a business is finance, at 79%, while Accenture predicts that 90% of a CFOs time will be spent on data by 2020.

Challenges facing CFOs right now

Uncertainty Around Brexit: The long-term negative impact on business is a major concern for 75% of CFOs, compared to just 9% who aren’t concerned at all. In addition to the prospect of tighter monetary policies, weakened demand is also a consideration. Despite this, growth plans are still highly focussed, and the level of desire to expand is at its highest since 2009 across the board.

Harnessing big data: With CFOs set to be spending most of their time by 2020 working with scientists to turn data into actionable insights, the question of how to effectively harness this information is on everyone’s minds. This is essential, as we’re set to see an incredible 163 trillion gigabytes of data output every year by 2025.

Increasing stress levels: Mounting workloads, high business expectations, and talent recruitment challenges all contribute to rising stress levels, with around 78% of CFOs believing these are set to increase in the next two years. In preparation, 52% of finance teams are planning to hire interim staff as a short-term solution.

Talent shortages: Recruitment difficulties are being widely reported across sectors, with 91% of UK organisations having trouble hiring skilled employees in the last 12 months. A massive 44% of CFOs have reported recruitment difficulties this year, and these shortages are not exclusive to the UK. CFOs in Belgium cite scare labour as a great concern, while 67% of executives in Japan face mounting skills shortages.

Cyber security threats: Financial gain is the top motivational gain for 59% of cybercriminals, which means finance and HR are the most likely to be targeted. With both of these areas falling within the realm of the CFO, a proactive approach to cybersecurity is going to be expected as we move into the future.

Preparation for the future CFO

Prepare to be at the heart of the data revolution

The world is set to produce enormous volumes of data by 2020 and, according to the ACCA and IMA, finance teams will be tasked with accurately interpreting data to generate reliable, innovative insights for CEOs to take to board-level.

Prepare to become a talent curator 

In order to prepare new employees for the role of finance, CFOs are going to need to increase involvement in talent acquisition and retention within business. New recruits need to be adept in strategy, multitasking and tech. CFOs are also prioritising soft skills as a key element for future hires.

Prepare to tackle cyber-risks

The growth of tech means risks to businesses are becoming increasingly complex. Future CFOs will be required to take a proactive approach to managing risk within the finance department, and the business as a whole. One report shows four in ten finance chiefs currently own or co-own cybersecurity within their organisations.

Prepare to keep pace with a changing workplace

With the consumerisation of real estate becoming a global trend, more businesses are choosing an agile approach to office space to expand into new markets, reduce costs, increase networking opportunities, and improve staff happiness. At the same time, modern CFOs are developing the leadership skills to not only manage talent, but also implement development strategies that work across remote teams with geographic and language differences.