Tomorrow’s CFOs Need New Skills and Tech to Survive
With CFOs roles expanding beyond treasury duties and bookkeeping tasks, it has become imperative for them to work on their skills and invest in smart tools. Studies by KPMG hints that one out of three CEOs think that their CFOs are not up to the mark.
New Expectations from CFOs
- Maintain strategic relationships with major stakeholders within and outside the organization.
- Develop a vision and strategy on how finance can back the business.
- Strategic decision making.
- Monitor and forecast trends.
- Plug skill gaps in the finance department.
- Manage regulatory authorities.
Automate Right, Embrace Fintech
85% of CEOs of top organizations believe that applying financial data to achieve profitable growth is the greatest value addition CFO can bring in. Big Data tools can help CFOs and the managers under them to mine data and forecast market conditions. Finance departments of companies across the globe have embraced invested in such AI-enabled tools. A report by Ernst & Young suggests that around 80% of finance-related applications will very soon transform into cloud applications. Presently, the finance departments waste 25 % of the time working on excel sheets. So it’s a priority for organizations to automate such tasks. The AI-enabled software can take care of the data entry works of the finance department. This essentially gives CFOs more hands on the deck for strategizing. Machine learning is being increasingly utilized to negotiate the best supplier terms. It enhances cash flow in times of need. This essentially means the finance department can function with the lesser workforce. Larger coordination can be achieved with cloud-based applications.
CFOs as Strategy Leaders
Though the primary duty of CFO surrounds finances, the planning and risk assessment has gained prominence in the list of duties. Critical data related to finances have to be monitored more closely by modern-day CFOs. According to McKinsey’s research, more than 60 % of growth comes from riding on favorable tailwinds in the market. The finance department is increasingly in pressure to identify these tailwinds. Companies that pursue growing sectors reap better profits. CFO plays a key role in strategizing transformations and acquisitions. According to Boston Consulting Group, 52% of large public companies in Europe and North America announced transformations in 2016. Most of these companies announced multiple rounds of cost restructuring, reorganizations, and downsizing during a short span of two years. The CFOs role has changed in these instances to shaping priorities, defining KPIs and communicating the value creation story to investors. Leadership qualities serve more purpose now as in several markets CFOs are considered for the upward shift CEOs.
Communication Skills Inevitable Now
CFOs are increasingly playing the role of advisors to the CEOs. Though studies say that only a few CEOs change their decision based on the CFOs suggestions, constant feedback is demanded in matters like Budget Management. CFO plays advisory roles in tasks such as real estate acquisition. Also, the communication of the finance department to all non-experts needs to be led by CFO. Similarly, some of the works of CFOs overlap with that of HR since recruitment in the financial department happens under CFOs watch. Above all CFO communicates the financial baseline against which company measures its success. This calls for better presentation skills and improved communication skills than before.