The growing importance of Chief Financial Officer (CFO) roles due to globalisation and business complexity has led to the need of increased expectation for CFOs to become business strategists. Equipped by technology advancement, the role of a CFO is now transforming.
Conventionally, CFOs are required to direct the company accounting, ensure the financial information accuracy, and monitor the financial health of the company. However, the future candidates for CFO positions might experience a change in their conventional roles. Future CFOs will be expected to not only good at interpreting the numbers but also developing and supporting their companies’ business strategies. The CFO will become more progressive to act as the CEO’s right hand man, especially when it comes to strategic decision making.
The change in CFO role could not happen without the impact of technology. Innovative technology are disrupting and challenging the conventional definition of being a CFO. Technology is indeed the significant factor that is transforming the role of the CFOs.
Innovative technology enables cloud accounting to flourish. Systems like XERO provide CFOs access to real time data and insights of their companies’ performances. With advanced machine learning, XERO could learn to complete multiple manual tasks which are currently performed by human. The automation feature of XERO allows CFOs to have more time and resource for strategy analysis, thus results in a better decision making.
Big Data Analytics is another business intelligence tool that employed by CFOs to collect comprehensive data from all departments. Data from sales, marketing, manufacturing, and management are combined, analysed, and visualised against the industry benchmark. For instance, Power BI by Microsoft is an effective tool to provide CFOs with an interdisciplinary view towards their companies and business environments. Business forecasting could be implemented more effectively by using business intelligence tools to generate strategic decisions at the Board level.
The technology development from Cloud Accounting to Big Data has created opportunities for CFOs to extend their roles and involve deeper in organisational strategic planning. Opportunities often come with threats. If future CFOs could not keep up with the change in technology and equip themselves with sufficient knowledge and skills, their jobs would be at threat and their roles in the Boardroom would be questioned. Furthermore, computer cannot fully replace human.
With more data and information at hand, it is not just about converting the data or interpreting the information (which can be done by sophisticated computers and software); the important role of CFOs is to translate and communicate information in such a way that can help the CEOs and the Boards make decisions more timely and accurately. As a result, there are much more important knowledge and skills that the future CFOs need to obtain today. CFOs should reach beyond their conventional duties to strategically align with the long term growth directions of their companies.
The job scope of CFOs will continue to grow, shaping a change in future top management practice. CFOs are now trying to balance conventional responsibilities with the growing demand for data-driven analysis and insights to support business growth. Progressive CFOs are the first change factor in the C-suit to make an impact and drive the companies towards their ultimate goals. Business intelligence tools and techniques will maximise productivity and efficiency of the CFO.
In becoming the partners of their CEOs, CFOs will need to improve their business strategy understanding and communication skills. At Tailored Accounts, we aim for the managerial accounting approach when we help CFOs make strategic decisions. CFO monthly meetings and cash flow analysis have always been our best advice for CFOs who want to maximise their potentialities and add more values to their companies.