What does the CFO of the future look like?
With digital transformation becoming vital to business success, CFOs are moving beyond the confines of traditional responsibilities in order to create value at a breakneck pace and build cutting-edge digital enterprises. Moreover, expectations around security and compliance continue to expand as a consequence of both regulation and consumer expectations. We are seeing growing pressure on the CFO to anticipate diverse needs and lead efforts in several directions.
Digitalizing Finance and Accounting can have far-reaching consequences within an enterprise, empowering CFOs with data to strategize, drive value, and bolster efficiency. With the power of
data and automation, finance executives are broadening their horizons vis-à-vis decision-making and reimagining capabilities.
Let’s dive deeper into these critical roles. What can CFOs do to catalyze the next stage in F&A innovation and growth?
The CFO of the Future: Four Areas of Focus
1) Transformative Tech
Technology is evolving rapidly, and waiting to adopt tech can put an enterprise at a huge competitive disadvantage. While it began with Enterprise Resource Planning (ERP) in the 1990s, the current wave of new technologies is transforming the finance function in profound ways, as never before.
Five technologies that are transforming Finance and Accounting today: advanced data analytics, Robotic Process Automation (RPA), cloud-based infrastructure and applications, Blockchain, and Artificial Intelligence (AI). It is vital for CFOs to understand these key technologies, in order to make the right decisions around testing them, investing in them, and helping people manage changes effectively.
Technologies save costs, limit risks, help uncover new opportunities, and increase efficiency. Understanding them and their implications and seamlessly integrating them into ongoing operations is no cakewalk, but it can be made easy with technical expertise via a dedicated team.
2) Talent & Outsourcing
Skillsets are changing with changing times and CFOs would need to modify their hiring and talent development criteria accordingly. While CFOs themselves, as well as senior finance professionals, are gaining skills at quick rates, employees within the F&A function need to constantly be encouraged to upskill in order to avoid skills gaps.
However, an enterprise can also choose to share some of its Finance and Accounting processes with CPA firms, which has numerous benefits. Besides cutting infrastructure and hiring costs, a CPA firm – such as ours – provides companies with an on-demand, dedicated pool of expert accountants and MBAs driving ROI for companies. In-house staff and outsourced teams can work alongside each other, making operations agile and more efficient.
The COVID-19 pandemic gave rise to remote work around the world. This pivotal change, with entire teams’ data online, exposed vulnerabilities and caused major cyberattacks. The Financial Stability Board (FSB) has stated that cyber activities such as phishing, malware, and ransomware grew from fewer than 5,000 per week in February 2020 to more than 200,000 per week in late April.
Needless to say, each technology comes with its risks and the stakes are perhaps the highest with finance and accounting. CFOs are being called to assess the suitability of technologies to meet business goals, but also to oversee their deployment and mitigate potential risks that could be disastrous.
For a CFO, spearheading efforts towards the bottom line alone is no longer enough. The ‘triple bottom line’ or a bottom line that simultaneously caters to people, planet, and profit has become the need of the hour. Both investors and consumers gravitate towards companies with strong environmental credentials.
Business decisions that are centered around sustainability, such as those resulting in reduced emissions and lower carbon footprints, fall under the purview of the CFO’s office and carry tremendous implications for the environment. An organization that works actively towards minimizing its environmental impact while driving profit needs a CFO that continually strategizes and co-leads the mission.
Paving the Way
It’s an exciting time for CFOs. Not only are they leveraging data for business, but are also set to drive innovation in 2021 and beyond. Tech adoption means higher ROI, smoother workflows, and greater value creation. CFOs need to continually foster tech upgrades to build the future of finance and accounting. Outsourcing the Finance and Accounting function while retaining in-house teams may be the key to closing skill gaps and cutting costs. The CFO must don many hats to be an effective leader, stay up to speed with technological advancements, and redefine how business is done.
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