Unleash your Inner Superhero

The Changing Role of the CFO

Regardless of industry, every company is trying to adapt to new market demands and constraints. As the pace of change keeps accelerating, organizations’ expectations of CFOs mount as well. Does the position of CFO now require superpowers?

In this article, we’ll go over the five key trends that place significant new risks, responsibilities and challenges on CFOs and how they can leverage new technology to thrive in this modern environment.

In the past, the CFO’s job description was relatively simple. It was mostly about financial reporting, audits, and compliance. However, there is no single definition of the CFO role anymore. The trend is for CEOs to increasingly rely on their CFO to guide business strategy.

Many CFOs are embracing the strategic advisor role, and are turning to technology to automate clerical tasks. The advantage is that they are then free to work on more strategic issues.

In this regard, modern ERPs like Microsoft Dynamics 365 provide an integrated view of all the operational units and generates cross-company forecasts in record time. This type of real-time insight is what CFOs need to confidently recommend the best course of action.

As senior employees prepare for retirement, companies realize they have to do a better job meeting millennials' needs and aspirations if they want to attract and retain top talent.

From a technological standpoint, this means adjusting mobility policies to allow employees to work from home, in coffee shops, or wherever they want, without compromising security, of course.

The challenge for CFOs is therefore to find the right balance between employee productivity and data-security needs. And while new technology may be part of the problem, it’s also part of the solution.

With Microsoft cloud, CFOs can use enterprise-grade security tools to configure their mobile devices and apps, so teams can be more efficient from virtually anywhere.

With the explosion of big data, CFOs need to figure out how to extract knowledge from a much wider range of sources and how to apply that knowledge to make strategic decisions about the business.

Traditionally, finance professionals relied on technology to report on historical data. Today, new technology makes big data more accessible to not only gain greater visibility into day-to-day activities, but also to anticipate future events.

In particular, smaller sensors improve data collection and accuracy, and a new breed of analytics powered by cloud computing allows CFOs to anticipate future trends.

By taking full advantage of their data to make faster and better decisions, CFOs can finally help their organization see imminent change and respond accordingly.

As more and more businesses pursue international growth through mergers and acquisitions, CFOs are expected to provide a unified view across the business. For finance professionals, this often means integrating different systems from new subsidiaries into a centrally managed system.

Through the power of the cloud, worldwide organizations are now able to easily aggregate financial data from business units around the globe. For instance, CFOs can link their SAP system to Microsoft Dynamics 365 through Microsoft Azure, even when these ERP systems are not hosted in the cloud, thus providing finance teams a 360-degree view of the business.

Meanwhile, the risk of IP theft is quite real, and having too much centralized knowledge can be problematic when trying to protect IP. The question then becomes: how can CFOs aggregate and centralize information across all their global business units while mitigating the risk of IP theft?

Here again, technology can be used to enforce corporate policies while still fostering employee collaboration and productivity on different sides of the world.

All in all, technology gives CFOs the agility they need to grow the business in a complex economic and legal environment.

Engaging with investors has always been part of the CFO role, but today they have to build relationships with institutional investors instead of private individuals.

As a result, CFOs need to allocate more time to investor relations while embracing a larger public role than they were accustomed to in the past.

The fact that investor relations are changing is also a challenge from a reporting perspective because each type of institutional investor has its own reporting requirements. Compounding the problem is the need to extract the required information from different systems in business units around the globe.

That is why modern CFOs increasingly rely on new technology to improve reporting efficiency and accuracy. In particular, cloud computing makes it easier to collect and analyze information from many different sources, helping CFOs speed up their financial close process while reducing the annual financial reporting costs.

Each of the trends we’ve described can be interpreted as an opportunity, a risk, or both. But CFOs can only exploit these moments of critical change if they take the lead and leverage technological advances to perform at the highest level in their role and ultimately help their organization stay competitive through this new era of digital transformation.

Read our blog on Digital Transformation to discover the tools you need to succeed.