How to Be All the CFO You Can Be (or Want to Be)

Progressive CFO online event

 

Over the next few years, many companies, motivated by opportunity or pressed by competitors, will launch new initiatives that require precise planning and forecasting, as well as new technology platforms. Some enterprises, however, may get stuck in the mud if their CFO is overly tactical, risk-averse, at-odds with IT, or keeps a stranglehold on financial data. Over time, these companies will see opportunities pass by, taking customers with them.


The evolution of the CFO is critical

CFOs get more unwelcome labels than other C-level counterparts—they have been called bean counters, Doctor “No” or “a speed bump on the road to innovation and company growth.” In reality, CFOs are the voice of reason. The essence of their job has long been to plan, forecast, ensure compliance, and communicate business and financial information internally to the management team—and represent the business to external stakeholders, analysts, and investors.

Now, CFOs must handle much more, as managers of risk, responsible for IT, proactive drivers of business evolution, and—more recently—drivers of innovation. At Tagetik, we have worked over the years with “status-quo” CFOs as well as their polar opposites, whom we call “progressive CFOs.”

The progressive CFO sets an example by being:

  • forward-thinking and frequently reforecasting, modeling, and uncovering opportunities;
  • a partner to business unit leaders in driving operational performance and strategy;
  • embracing new technology to help finance combine strategy with innovation, while remaining bulletproof from a compliance standpoint.


Pressure builds on CFOs to communicate more, and faster

In the CFO’s dynamic—difficult to predict—and very complicated environment, requirements for accuracy, completeness, and speed have gone up in the same blink of an eye.

The information universe of finance has expanded. Today, the CFO works not only with financial data and analysis, but also with information about market trends and economic conditions and now even big data—and that is a significant job expansion. CFOs need systems that can analyze financial as well as non-financial data, yet maintain the accounting logic and rigor needed for full regulatory compliance.

The same systems must also allow the Office of the CFO to quickly model large-scale alternative business scenarios in detail, across the boundaries of business units, as the CFO’s role now includes acting as an internal business partner to the management team, supporting LOB involvement in data analysis and planning. LOB managers know their business better than anyone else does, but the CFO is the authority on modeling and budgeting.


CFOs as technology leaders: there is room to “progress”

The CFO is where the buck most often stops for IT spending. It matters how the finance group itself uses technology—and how technology changes finance. Gartner noted recently that “The digital disruption in finance departments has been as profound as in any other organizational department" 1. Another Gartner study in 2014, however, showed only 10 percent of CFOs see IT as a source of differentiation 2, and as little as 3 percent see it as a source for transformation. That perception is outdated, and a progressive CFO will develop awareness of the high ROI that technology innovation can bring to finance and other departments, creating beneficial differentiation.

Corporate Performance Management (CPM) systems—to support the more progressive, strategic CFO—must leverage newer technologies such as:

  • in-memory data processing, to reduce the time to analyze information, and the cost of storage, while enabling very large volumes of data to process quickly, in ever-larger analytic models.
  • mobility, to allow global finance organizations to collaborate easily, and accommodate to 24/7 work schedules across time zones.
  • the cloud, to simplify software adoption and upgrades, and reduce operational costs.
  • integrated reporting, to advance from a compliance approach to a concise communication of company value that drives more effective decision-making.


The progressive CFO is actively involved in defining the technology path

Systems that work only within departmental silos, isolated from these new technologies, or requiring undue integration, do not serve the CFO as an enterprise strategist and leader.  By working together, these technologies and capabilities help pave the road forward.

The CFO should keep an alert eye for new technologies that can deliver concrete benefits throughout the enterprise—and strive to incorporate them into the company’s business processes and models. In-memory technology, for example, might debut in finance, giving the CFO yet another role: technology evangelist.



The Progressive CFO Series

Of course technology is only one of the challenges and opportunities that the progressive CFO faces. There are many more, which is why we created Tagetik’s Progressive CFO™ Series. Every month, short interview-style videos, webinars and podcasts will feature one executive, showing how he or she tackled a specific problem, and the outcome achieved. The presenter will be available to answer your questions online. I am confident that you will gain valuable insights from their experiences. We encourage you to suggest future topics to address in the Progressive CFO series.

The first Progressive CFO Series online event will be broadcast on June 18th at both 8 a.m. and 2 p.m. EST, and will feature David Hale, leading global economist and advisor to many Fortune 500 businesses. Please join us at this event and also check out the calendar of topics scheduled for the coming months.


1Gartner, Survey Analysis: Critical CFO Technology Needs: 2014 Gartner FEI Study, John E. Van Decker, 23 June 2014

2https://www.gartner.com/imagesrv/cio/pdf/cio_agenda_insights2014.pdf

 

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