Discover five forces driving change for CFOs, how CFOs are positioned to meet these changes and how things are playing out in the industry today.
CFOs, long responsible for producing numbers and managing technology investments, are now taking on the strategic role of proposing and shaping business models and the investments required to move financial services organizations into the digital era.
As David Axson, Global Lead of CFO Strategies at Accenture Strategy, said in his interview with Alex McKay of Soldo, the change in role began with the financial crisis, when companies turned to their CFOs for help with conserving cash and capital, cutting costs, and continuing to make money in a challenging environment. Since then CFOs have stepped up, embracing change and using it to their advantage.
Five forces driving change
Accenture’s research shows that the evolution of the CFO’s role is being driven by five forces:
- Businesses are under constant pressure to show growth and profits.
- Boards, CEOs and enterprises overall have increasing expectations from CFOs.
- Regulatory and consumer expectations are propelling expanded control and compliance requirements.
- The pace of technological change continues to accelerate.
- Data-volume is exploding, which requires a new focus and new capabilities, and it’s delivering powerful data-driven insights.
Of these five forces, I believe data is the lever CFOs can use to make the biggest impact.
How CFOs are positioned to meet change
CFOs are so well positioned because they are by nature analytical and data oriented—both are obvious requirements for anyone guiding investments in data technologies and capabilities. It’s these two sides of the data equation that will enable them to grow their leadership position:
- Automating data functions, such as routine accounting, control and compliance tasks, will create an enormous capacity for them to refocus their teams on more strategic activities.
- Tools like AI will enable the analytics to support their higher–order role as strategic enablers.
While it’s true that artificial intelligence (AI) will massively simplify the production of information, selecting important touchpoints and doing the heavy lifting of analysis, it will take the CFO’s human ingenuity to derive insights and act on them. Paul Daugherty points this out in his book, Human + Machine: Reimagining Work in the Age of AI.
A CFO’s ability to synthesize rich, complex data sets and develop rigorous analysis of potential investments while managing risk, lets them assess plans and strategies objectively.
How it’s playing out in industry
Banking CFOs are more likely, compared to other surveyed sectors, to already be using data to analyze future business scenarios and prepare their enterprise for future volatility. The use of data for identifying shareholder value creation opportunities is also a growing priority.
Insurance CFOs are taking steps to exert greater control over data across the enterprise. Our research shows that they are significantly more likely than those in other sectors to say that finance should take a leading role in identifying and managing the most critical data.
However, when it comes to managing and using data throughout the organization, talent is still a key challenge to overcome. Insurance CFOs tell us that they are struggling to recruit and retain the talent they need—an issue that could prevent them from achieving their strategic ambitions. In the banking industry, where there’s even more competition to recruit data scientists and digital skills, I suggest CFOs consider options, like sharing talent across the enterprise or acquiring start-ups as a viable source of fresh skills.
CFOs are now strategic partners
The evidence is clear. CFOs are expected to use their knowledge of data, analytics and finance to forge new strategies across their organizations while influencing and guiding existing business units.
The CFO of today—and of the high-performing digital business of the future—is, above all:
- Focused on securing critical business outcomes and economics by enabling strategy.
- Partnering with the CEO to deliver those outcomes, helping lead the way for functions throughout the enterprise.
- Embracing new technologies and evaluating enterprise-wide investments to support the velocity required for tomorrow’s business.
- Owning the data agenda and wielding the power of data, not least by controlling the one version of the truth.
- Embodying a smart technology culture and building new talent with the agility, skills and experience needed to deliver in the New.
CFOs must establish the expectation that their organizations will leverage all the available data and analytics, going beyond reporting to help guide the business. I believe emerging finance leaders are up for the challenge. Are you?
I highly recommend reading the report, From Bottom Line to Front Line, co-authored by my colleague Steve Culp, Accenture’s Senior Managing Director who leads Finance & Risk for Financial Services. It brings together our latest primary research and is filled with rich insights from Steve and other Accenture leaders.
You can find the full interview with David Axson here.