As we enter the third decade of the 21st Century, the rate of technological change in the world of business continues at pace. Within this context, the CFO’s role is pivotal to their organisation’s success and ability to respond to – and thrive during – this change.
As things stand, organisations are simply not acting fast enough to keep up with the rate of technology innovation or benefit from real-time information. In fact, according to our latest Advanced Annual Trends Survey, 32 per cent of the senior business decision makers admit their organisation is not acting fast enough to keep up with the pace of innovation.
This is clearly an issue as the UK defines a new role for itself in the global market. So what role can we, as CFOs, play in changing this and what should our priorities be for 2020?
Here are my predictions for the next year and beyond:
Technology at the centre
Being switched on to the latest technology, and how to use it to their advantage, must be a core part of the CFO skillset in 2020. Automation technologies can take over low-skilled team functions, such as mundane transactional processing, releasing valuable time to focus on driving business strategy. Given the right software, these traditional finance tasks can be increasingly automated – but only if the CFO understands the opportunity that technology brings and is open to digitisation. A recent Gartner survey revealed that CFOs currently lose one day per week to the wrong activities, with only 22 per cent found to be ‘personally effective’. Clearly this situation is not sustainable. In 2020, technology will increasingly hold the key to shifting the CFO’s role from an internally facing controller to a highly effective advisor to the CEO, with unparalleled influence on business direction.
Data-driven business strategy
Businesses in 2020 are facing more complexity and uncertainty than ever, with changing global dynamics and the ongoing uncertainty around Brexit, meaning that we are truly entering uncharted territory. CFOs have a unique role to play in driving insight-based decision making in this context, using data to provide some level of visibility and knowledge to the businesses they serve.
Of course, a core part of the CFO role has always been about the interpretation of data. However, in 2020, the nature and role of this data will need to change, adding external trends and metrics into the mix with traditional internal performance metrics.
Finding and analysing this range and complexity of data is not straightforward. CFOs must be able to translate data from multiple sources into consumable information to help navigate the changing economies and markets, as well as minimise risk. The old approach of Excel spreadsheets and different data sets no longer cuts it. Instead, Cloud-based software, with the power to assimilate and analyse data from a wide range of sources to create an insight dashboard and enable data-driven decision making, will help set the strategic CFO apart from the tactical CFO. In 2020, the strategic CFO will be able to use this technology to bring together operational and strategic reporting to give a fully holistic view of the business, anticipate future needs and ensure the organisation is agile enough to respond.
CFO as key advisor
All of the above leaves the CFO uniquely placed to help set the direction of travel for their organisation. 2020 will see CFOs working more closely with c-suite leaders, with the role evolving to become a true influencer in the boardroom. The CFO can, and should, become a strategic partner and sounding board to the CEO, helping them stay one step ahead. CFOs can help CEOs understand how the business is performing, where weaknesses lie, whether more efficiencies can be made and identify new growth areas.
This unique vantage point means that CFOs’ responsibility and influence will increasingly move beyond the traditional realm of finance into other areas of the organisation. CFOs are now taking responsibility for functions such as IT, and 2020 will see this continue and expand, with strategy and digitisation moving into their remit.
Finance team skills will evolve
With CFOs taking on a broader and more strategic role in organisations, so our teams must evolve in terms of their skill set. According to the Economic Intelligence Unit, ‘the future finance professional is as much a strategist as an accountant’. In 2020, finance teams will shift to be made up of professionals with broader commercial and analytical skills alongside, or even in place of, traditional accounting. Teams will need to apply technology to keep a strong grip on the numbers, but will also need the ability to act and think like business strategists and decision makers. Innovation, and the ability to embrace new ways of working, will be essential to creating a team that can support and inform the strategic CFO. We need team members who can look outside of the organisation, spot trends and risks, and manage internal stakeholders to challenge and influence.
At Advanced, for example, we have a team of business analysts who sit in the finance team. They help us visualise data, interpret it and turn it into meaningful insights that can be used to inform business decisions including deal negotiations.
The new role of finance requires a reset of team objectives, a different recruitment strategy and a refresh of training and development programmes to ensure skills are aligned to the needs of the business in 2020. Technical skills remain essential, but soft skills have become equally, if not more, important. Finance staff now focus on sharpening their business acumen and building strong consulting, negotiation and influencing skills, as well as transforming data-driven insights into actionable advice.
While 2020 will bring challenges, it presents the most exciting opportunities yet for the visionary CFO. Nearly half of the business leaders we spoke to in our Annual Trends Survey believe the most important attribute for a business leader in the digital era is the ability to react with pace and make bold decisions. This places tech-savvy CFOs in a uniquely powerful position, as this level of bold decision making can only take place when supported by real-time, data-driven insights.
By Andrew Hicks, CFO at Advanced