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Who is the modern day CFO?

By Ian Preston, VP of sales UK & I at Adaptive Insights

The CFO role has, arguably, transformed more than any other executive role within the past decade.  No longer is the CFO consumed with explaining the issues that have already happened or having debates over the credibility of the data.  Now, the CFO is charged with building comprehensive strategic plans embracing both operational and financial data and this requires a more complete picture of the organisation, its financial performance, and, crucially, its financial potential.

While in the past, companies may have only dreamed about accurate ‘what-if’ forecasting that takes the guesswork out of their financial stability, this is increasingly becoming a reality.  CFOs can’t do it alone however.  It’s all about a change in tactics.  If CFOs are expected to be analysing the bigger picture in real time, they need another way of collecting the data that is faster and more accurate.  This is where better technology comes in.

An evolution

Traditionally, finance professionals have had to rely on spreadsheets to consolidate company data, which are notorious for being both time consuming and error-prone. What’s more, because it is so important for accounting to be accurate, this often results in a repetitive process of checking and re-checking data often across multiple spreadsheets that reflect different parts and levels of the business.  While such diligence to ensure accuracy minimises the risk of errors to an extent, the process of corroborating and combining multiple reports can in itself cause inaccuracies.

Leveraging an easy to use, cloud-based analytics system, CFOs can empower key staff to upload the financial and non-financial data associated with their department or business unit, which can then be rolled up into company-wide reports and analysis.  This will ultimately give the CFO a more complete vision of company financials and business performance freeing up time for analysis and financial modelling to better manage the future.

The situation today

Demands on the CFO are increasing. With more data, more stakeholders, and a continuously changing economic and political climate, strategic planning can be a tall order, one that is impossible without agile and accurate technology.  In recent research we did with CFOs, 69% said that keeping data siloed was among the top financial mistakes most companies make, and 40% said inaccurate data for forecasting and planning was a common problem.

Having accurate data and armed with realistic forecasts and models, the modern day CFO can work closer with other C-suite executives.  This allows them to aggregate business-critical information and find a strategy that benefits the business as a whole.  More than 65% of the CFOs we spoke to, for example, planned on eliminating the ‘data divide’ by working more closely with the COO and the business; 34%wanted closer collaboration with HR; and 30%wanted closer collaboration with the CIO.

As CFOs increasingly become business strategists, they are also looking beyond internal operations into macroeconomic trends, risk analysis and external threats.  For example, the top external concerns for CFOs are economic uncertainty (71%) and competition (81%).  Interest rate rises are also being considered in 2016 planning by 48%of CFOs, as well as M&A activity for 37%, 32%cybersecurity, and political volatility is seen as a point of flux for 29%.  This demonstrates the multiple factors that impact financial planning and analysis and how much the modern CFO has to take into account.

Elevating the finance function

More sophisticated technology that enables finance to deliver a holistic view of the company will not only benefit the business but finance professionals themselves. While the business gains in more accurate numbers, better analysis, and more control over cashflow, the finance professional is carving out a niche of their own.  As the go-to person for the financial aspect of any decision or situation, they hold some of the most valuable information in the business and, in some cases, become the best person to make decisions.  The job satisfaction of having such a valuable role within a business also can’t be ignored, and the workforce is likely to be much more motivated as a result.

In a nutshell, the modern CFO is a skillful analyser, able to provide a narrative to the numbers and deliver actionable insights that transform the business. They aren’t concerned as much with looking in the rearview mirror, but achieving a true 360-degree view of the business. It is this unique view that is distinguishing the modern CFO.

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