The role of the CFO is undergoing a major transformation. New research from Accenture finds that more than eight in 10 CFOs see identifying and targeting areas of new value across the business as one of their main responsibilities. And three quarters believe it is within their purview to drive business-wide operational transformation.
This transformation is driven by several major forces. For one — boards of directors, CEOs, and enterprises overall have ever-demanding expectations for CFOs and the value they deliver.
CFOs are working side by side with CEOs to drive strategy, while at the same time are under constant pressure to show growth and profits as well as manage expanded control and compliance requirements. Add that to the accelerated pace of change brought on by new digital technologies, and it’s no surprise that CFOs and their teams continue to see a radical repositioning of their role, the work they do, and how they do it.
Through our research, we’ve identified three themes that characterize this pivotal moment in the evolution of the finance function.
Digitizing Finance and Harnessing the Power of Data. CFOs continue to automate routine accounting, control, and compliance tasks, and shift their focus to value creation as digital technology empowers them to shape strategy. As a result, they can increasingly be relied upon for higher-level thinking, answering new questions in new ways and bringing the C-suite together to act on insights gleaned from data analysis. The ability to capture, structure, and make better use of data to increase the efficiency and effectiveness of their own departments and the rest of the organization is the CFO’s biggest area of potential strength.
Leading Digitalization Efforts. CFOs play a critical role in the digitalization of their enterprises, with most starting in their own departments. In a virtuous circle, the data capabilities CFOs develop can help them make decisions about investing in technology across the enterprise based on economic value, which in turn empowers them to generate and combine even more useful data. Our research shows CFOs are advancing the enterprise-wide digital agenda, with 77% heading up efforts to improve efficiency through adoption of digital technology, and 77% also exploring how disruptive new technologies could benefit the organization and the business ecosystem.
Developing Future Finance Talent. CFOs need to shift their hiring and talent development criteria so the next-generation of finance leaders — who will more than likely follow different career paths than previous generations — can flourish in this expanded role. Knowing how to collaborate and innovate are requisite traits of the next-gen CFO. Meanwhile, today’s CFOs and senior-level finance professionals are gaining expertise at a faster rate than the rest of the function, creating a skills gap that must be addressed. And that may mean looking outside of the finance department for candidates. Two-thirds of finance leaders believe they can and should train executives in non-finance functions to take on finance activities such as reporting, planning, budgeting, and forecasting.
The opportunity to fill the new dynamic role of CFO is great, but it comes with some challenges. Here’s how CFOs can best position themselves to meet them.
Shift focus away from process. Finance activities need to be aligned to business outcomes. Now is a critical time to leverage automation and analytics to gain more insights. And as accounting and other routine tasks are automated, the CFO will create more meaningful and impactful roles for finance professionals, such as leading digitalization transformations, ensuring their organizations pivot wisely in this radically different marketplace.
Sharpen your data storytelling skills. Data and analytics are only as good as the decisions they result in. CFOs will have a critical role in educating, coaching, and communicating their data outcomes to shareholders and their C-suite cohorts. CFOs are now strategy players who are expected to use their knowledge of data, analytics, and finance to forge new strategies across their organizations while influencing and guiding existing business units.
Step outside of the finance function. Teams form and re-form around issues, projects, and events. That brings diverse skill-sets to the decision table. It’s time to reach beyond finance to find new ways to allocate resources, leverage skills, and measure results. Forward-looking leaders will be energized by the potential of digital transformation: the automation of dull and mundane tasks, richer and more timely datasets, access to sophisticated analytic models, and deployment of advanced visualization tools can combine to make finance one of most exciting and value-adding places to work in the enterprise.
Never has the CFO been better positioned to be the CEO’s chief business partner, serving as an innovator and a disruptor who can harness data to unleash new value. Now is the time for CFOs to wield the power of digital and secure their organizations’ growth objectives and become the true guardians of the enterprise.
Steve Culp is senior managing director at Accenture and global head of the company’s finance & risk practice. Christian Campagna is senior managing director, Accenture Strategy, CFO & enterprise value.