The role of the Chief Financial Officer is rapidly changing.
A CFO can no longer simply depend on crunching numbers and focus narrowly on the company’s balance sheet. Today, CFOs need to know how to take a broader perspective and embrace disruptive technology, analytics, and other new and developing variables. Similar to natural selection, CFOs need to evolve in order to survive.
Since this is the case, we’ve rounded up the most important skills CFOs will need to develop in order to be successful in modern times, along with recommended software and learning resources that can help along the way.
1. CFOs must become analytics wizards The current role of the CFO is to a large extent transactional. However as technology becomes an integral part of the workplace, the CFO’s responsibilities need to adapt. A great CFO should spend 90% of time and effort on analytics, and only 10% on transactional operations. Sadly according to a study conducted by Accenture, only about 3% of organizations currently meet this figure. Recommended learning resource: edX Data Analysis and Statistics Courses EdX provides a variety of classes ranging from “Introduction to Data Analysis using Excel” to “Analyzing and Visualizing Data with Power BI.” Online learning platforms are excellent resources as they are easy to access at any time, anywhere. For a nominal fee you can learn the basics of any analytics platform from some of the top companies and academic institutions including Microsoft, Columbia University, and Imperial College London.
2. CFOs must know how to deal with an increasing amount of risk The breadth of potential risks present today is historically unprecedented, and it seems to only be on the rise. Consequently, this calls for appropriate and novel risk management processes. One apparent, and simultaneously unforeseeable, danger is that a business model will be disrupted by emerging technology. As a result, CFOs need to constantly question- "who, or what, is going to put me out of business tomorrow?" A recent forecast supports this trend of increasing risk. It holds that while in 1964 tenure on the S&P 500 list was on average 33 years, by 2027 this figure is expected to go down to 12 years. As such, it is vital for the CFO to act as the CEO’s strategic partner in navigating and mitigating risks.
Most valuable software to consider: Parapet Parapet is an Integrated Risk Management System (IRM). Since businesses can encounter various types of risks (such as business, technical, security, environmental, etc.) it is important to have a system in place that helps you keep track of all the potential obstacles in your way. Parapet aims to help you identify these potential obstacles and manage them.
3. CFOs must adapt to new technology A CFO must look at the business model and determine how it can be adapted to fit with the times as well as consider how changes can be financed. CFOs must be forward thinking and figure out how to leverage new metrics to allow for innovation. They can’t continue to rely on old ways of thinking as this prevents the creation of new business. Instead, the successful CFO must embrace incoming changes and know how to incorporate them into the business.
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4. CFOs must embrace Big Data Data and analytics are of increasing importance to organizational success. CFOs are not expected to be data scientists, but successful modern CFOs need to serve as the link between data scientists and business objectives in order to propel the business forward. The CFO’s role should be that of a translator, relaying business needs to the data scientists, getting answers, and translating those answers into actionable insights.
Most valuable software to consider: PowerBI Power BI is Microsoft’s visualization tool. Big data is an invaluable component of today’s digital environment, and Power BI is an excellent tool that can help organizations take advantage of the insights lying behind their numbers.
5. Hiring decisions will become a big part of the job CFOs need to be active players in the search for talent and talent retention. As they have always been and will continue to be, your people are your greatest asset. In fact, as the future marketplace becomes even more competitive, their importance will only grow. As such, CFOs need to be involved in the hiring process in order to ensure that the right people are brought in and stay there. Most valuable software to consider: Ideal Powered by AI, Ideal helps organizations make the best data-backed talent decisions. With Ideal you can intelligently screen candidates, automate tasks, and activate a 24/7 chatbox to converse with candidates. All this is used to elevate your candidate selection process and ensure that your organization makes the right hiring decisions at the right time.
"The digital transformation does not stop at the boundary of any industry or sector. New competitors and technologies are transforming product ranges, work processes and even entire business models. Companies' finance functions and CFOs are acting as key navigators through this digital transformation – supported by the most up-to-date tools." -Gori von Hirschhausen, Partner, PwC Germany
The digital revolution is impacting every facet of the working world, and the role of the CFO is no exception. If CFOs want to stay relevant they need to be able to fit in with the times. By embracing the skills mentioned above, CFOs can ensure that what they have to offer fits with the current demands of the modern world.