The evolving role of the CFO

business people
By Andrew Harbison, CA Today

23 March 2016

The finance function is set to undergo a radical evolution within the next four years. How can CFOs ensure they are making the most of this opportunity?

The way the finance function fits into an organisation is changing dramatically, according to a new report.

The CFO of tomorrow will be increasingly involved in business strategy and planning to drive profit and growth – as well as seeking out new commercial opportunities.

The ‘Finance 2020: closer than you think’ report, by specialist recruitment firm Robert Half UK, asked 200 CFOs to rank their priorities for both the short term (up until 2017) and the long term (up until 2020).

How CFOs see their priorities changing

The short term - 2017The long term - 2020
1. Meeting regulatory compliance mandates1. Keeping pace with changing technology
2. Keeping pace with changing technology2. Harnessing/managing big data
3. Meeting accounting and financial reporting standards3. Meeting regulatory compliance mandates
4. Harnessing/managing big data4. Meeting accounting and financial reporting standards

Source: Robert Half UK

While the essential functions and disciplines within the finance structure of a business will remain largely unchanged,, the speed at which technology is developing and an increasingly complex and uncertain market will require finance professionals to be more proactive and strategically-focused.

“As accountants, we are great at coming up with the answers, but we need to change our perspective and start listening. Asking probing questions generates objective insights in collaboration with business managers,” said Peter Simons, Head of Future of Finance Research at CIMA Global.

Advancements in technology

The report found that in the short term, finance chiefs are focusing on meeting regulatory compliance mandates, while harnessing and managing big data came in at the bottom of the list.

However, in the long term, keeping pace with changing technology and using big data are first and second respectively, while meeting accounting and financial reporting standards was ranked at the bottom of the list.

Anneke Wieling, Managing Director at Protiviti realises that “technology and the internet will become the decisive business factors in the future, and having timely and relevant data to gain a competitive advantage will be a key role for CFOs looking ahead”.

Digitising the finance function

Even though an organisation may be working at a high level with data analysis, the systems they are using are often outdated, leading to more time being spent completing the process. Replacing these legacy systems by investing in new processes is at the top of UK CFOs’ plans to digitise the finance function. However, the majority of those surveyed feel that this upgrade is not without it challenges, citing technology limitations as the greatest challenge in the UK.

Pushing past these limitations will allow organisations to free up "talented accountants who are still spending time chasing paper documents who should be providing more value to the business," said former Chief Financial Officer and now Deputy CEO of ENGIE Richard Blumberger.

Breaking down barriers

Perseverance in the face of adversity is also important. As the role of finance changes, accountants and CFOs may find they come up against some resistance from individuals or groups in the organisation who believe that they may be overstepping their expertise or their remit.

Pre-existing silos within the business can kill much needed collaboration between different departments.

“The biggest challenge is that a CFO does not have either the credibility or the mandate to suggest change,” admits Peter Simons.

“However, if they can show the business how to make money, save money and/or remain compliant, they will be invited back to the table again and again.”

He also said “empathy and rapport” are just as important when presenting the business with original initiatives.

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