For many years, corporate finance leaders were seen as the “numbers people” who invested their time in calculations, balance sheets and very large spreadsheets.
That model is increasingly outdated as today’s CFOs take on more responsibility and a greater role in strategic decision making. One recent study conducted by McKinsey suggests that, on average, five different functions now report into the typical CFO’s office. For instance, in 38 percent of cases, technology now reports to the CFO.
Our research supports this analysis. Rod Meade, finance director at property consultants Carter Jonas, has worked in a finance leadership role for more than a decade, but over time his responsibilities have become much wider. Today, the IT, risk management and contract management teams at Carter Jonas all report to the finance department, and Meade is also chair of the operations board and a long-standing member of the executive board.
This new type of CFO leads a finance department that is far more than the place to find figures and is instead delivering strategic insight and influencing the business. “We are data interpreters, technology experts and contemporary strategists, who must look ahead and plan for the future,” says Uta Molnar, finance director at the smart infrastructure subsidiary of Siemens AG. At her part of the multinational, the company is in fact actively recruiting in finance with an eye on this new breed of CFO.
The move towards digital business, and the associated developments in technology, have been critical in the evolution of the CFO. Technologies such as business intelligence, robotic process automation and data analytics have freed up time and resources within the finance function, allowing CFOs to take a more involved role in the wider business.
Additionally, the quality of data being captured within the finance department is vastly improved, meaning the CFO is in a position to act as a partner to other senior executives, providing information and support to make better, faster decisions.
“In days gone by it felt like the CEO set the agenda and the CFO would follow, but now the CFO is part and parcel of that strategy and driving shareholder value,” says Scott Singleton, international finance director at UK-based digital marketing experts Oliver Marketing. “The CFO is driving a lot of the change because a lot of the relevant data is being created and reported from by finance.”
Technology has helped many finance leaders to both evolve their roles and increase their strategic involvement and contribution to the wider business.
“A frequent challenge that finance teams face is the simultaneous need to understand the movement of detailed business drivers while getting business units buy-in to the anticipated macro consequences. That can manifest itself in enormous spreadsheets and information overload. While technology undoubtedly helps with that, CFOs and their senior teams need to apply themselves to the analysis not the production of that data.”
Neil Edwards | ex-CFO, Zoopla
Many have embraced new technology such as Intelligent Automation, enabling them to boost productivity and identify new market opportunities. With Intelligent Automation, programs and software can automate functions and provide better insight into factors that can affect a company’s bottom line. This frees up CFOs to spend more time on other areas of strategic importance.