The value of a good CFO, ironically, is immeasurable. However, managing company finances, overseeing financing reporting or advising on long-term financial planning barely scratch the surface of their responsibilities. Even traditionally, CFOs have been acting as business strategists and IT leaders. But the rapid surge in adoption of digital tools and processes has made their roles more multi-faceted.
Does this mean that most CFOs are tech-savvy? Unfortunately, no! After all, their finance transformation journey started with cloud-hosting, which left little room for them to personally gain digital skills. So, the reality is that many continue to use Excel sheets. But they are also aware that their workflows are constantly changing. Today, their responsibilities include:
- Working closely with business teams to ensure initiatives meet financial criteria
- Aligning finance team goals to long-term growth objectives
- Assessing new and emerging FinTech trends
- Leveraging AI and automation to increase process efficiency/workforce productivity
- Creating a data analytics-driven mindset to increase scope/coverage of BI insights
What does this mean to the role of the CFO? They also have to play other roles like:
- CEO’s strategic advisor
- Digital transformation advocate
- Data analytics champion
- Business strategy collaborator
- Partner ecosystem enabler
Difference between a bad CFO and a good CFO
Technologies like AI, automation, big data, and analytics have already had a tremendous influence in transforming the way CFOs operate on a daily basis. It has equipped them with more agility, intelligence, and scalability to fulfill their responsibilities while going above and beyond to help the organization cope with volatile market dynamics. As previously mentioned, this can be immeasurably important to thrive in these current unpredictable economic times. It’s why now, more than ever, CFOs are under pressure to adapt or get left behind.
Now, the main difference between a bad CFO and a good CFO is that latter realizes that this change is an opportunity to add more value. And a bad CFO, in all probability, treat it as a stark departure from what they are supposed to do.
Let’s dig deeper into what makes for a good modern CFO.
10 qualities of a good CFO
- The CFO should be an advocate for digital transformation – driving operational efficiency through process transformation and optimizing workforce productivity with self-service tools.
- The CFO should have a 360-degree view of the organization – capable of connecting sales, strategy, technology, and finance with AI and data.
- The CFO should have a firsthand cross-functional information in real-time –this can help them respond to a financial crisis or take corrective actions to address strategic gaps.
- The CFO should offer strategic inputs on allocating budgets for mergers and acquisitions that allow the organization to transform into a more digital entity.
- The CFO should proactively ensure that financial parameters are controlled – for instance, if the ERP system is not agile enough to send timely alerts to avoid vendor payment delays, they should advise the organization to go for an effective real-time reporting tool.
- The CFO should help incubate a culture of digital upskilling for their teams and across the organization – making the workforce leaner and more resilient.
- The CFO should ensure security protocols are in place to identify and resolve breaches or cyberattacks that put confidential financial data at risk.
- The CFO should be aware of the value propensity of digitalization to become a revenue generator, not just a revenue optimizer.
- The CFO should offer predictive risk assessment and revenue growth inputs, during the planning stage, regarding new geographies or market segments.
- The CFO should understand the future impact of top-notch talent with modern skillsets so that they can rethink hiring budgets.
Considering that CEOs have remained sales-driven, the CFO’S role has become a lot more strategic as they continue to deal with more stakeholders than ever before. However, there are no one-size-fits-all stakeholders for CFOs. That depends on the type of organization they work for and its unique business goals. For instance, if it’s for a startup, the CFO would be committed to keeping the VCs happy. On the other hand, if they work for a public company, ensuring that investors are satisfied is a major priority.
But, at the end of the day, the CFO focuses on bringing internal stakeholders – the various teams and C-suite members – closer to digital transformation, which primes the organization for success.
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