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The Outlook

What does the next century hold for corporate finance? Here are 21 predictions for the 21st century.

There is no question that over the past decade or so, chief financial officers have risen to prominence in the corporate landscape. And with the new century upon us, it’s only natural to wonder how the role may continue to evolve. What new responsibilities will they be expected to assume? Could a significant economic downturn mean a return to bean- counting? Will the Internet shrink the finance department to a one-person outpost monitoring legions of outsourcers?

What follows are our predictions–based in part on your perceptions–for the future of finance in the next decade. Some predictions may seem obvious; others, far-fetched. About all we can say with absolute certainty is that the rules of the game will continue to change, and that finance executives must be ready to change with them.

1
Speed, not structure, will rule.
It is 57 days, 3 hours, and 49 minutes to the end of the century, and Craig Monaghan is a bit frantic. The CFO of iVillage Inc., which runs a leading online site for women, has just come off a two-week road show for a follow-on offering to last March’s initial public offering. Now, with a fresh $75 million on hand, he’s staring at an earnings-release deadline that’s just hours away.

As the clock ticks down, Monaghan checks on the work of staffers who are double-checking the third-quarter numbers, while fielding calls from an advertising sales manager, an investor-relations consultant, and iVillage CEO Candice Carpenter as she steps off a plane. The next day’s announcement should add to the four-year-old company’s legacy of losses, yet he hopes investors will focus on the progress being made on key nonfinancial, brand-building, and core metrics.

For the 42-year-old Monaghan, the speed and intensity of the job is nothing like what he experienced growing up in finance at General Motors, Bristol-Myers Squibb, and Reader’s Digest. Rather, it feels more like his life back in 1980, when he commanded a tank unit in South Korea and had the authority to launch missiles if the North Koreans fired on his platoon. “There we were on the front edge, and here [at iVillage] I think we are on the front edge as well,” he says.

In Monaghan, it seems safe to say you can glimpse the multiple roles CFOs will play in the future–strategist, technologist, deal maker, financier, and CEO partner. There is little evidence that the pace of change will slacken. In a recent survey of 620 readers, in fact, we asked them what they think the future holds: 67 percent said they expect the rate of change to accelerate. Only one respondent thought things would slow; the rest predicted that the pace would stay about the same.

For Monaghan, whose new-century priorities– manage rapid growth, push for profitability, seize new strategic opportunities–reflect those of many finance chiefs, the speed is exhilarating. Yet this 21st-century CFO secretly yearns for that relic of corporate finance–the inches-thick binder of management reports. “I’m envious of the sophisticated systems, formal policy manuals, and monthly reporting packages that big companies have,” he confesses. Reminded that many firms want to stop delivering reams of backward-looking data, Monaghan agrees that there’s no need for them, but adds ruefully, “I’d like a little more structure than I have right now.”

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