As the year-end looms, CFOs in corner offices around the globe are poring over 2017 budget proposals, allocating resources and approving 12-month plans based on data they know will be out of date even before the Christmas trees have been recycled.
This might suffice for another year or two, but nimble disruptors are appearing in every sector, and CFOs and their organisations stuck in a trap of out-dated systems, data and skills, will be left behind unless they make an effort to change with the times and the technology.
So, based on all of FSN’s research this year, these are where I think CFOs should be focussing in 2017
1 Invest in people and new skills
CFOs are increasingly being called upon as strategists, business partners, innovators and technology evangelists, and they must develop their own ‘soft skills’ like leadership, negotiation, presentation and communication to take up this mantle.
But the skills development must also filter down to their team. Automation and business intelligence systems have subsumed many entry-level finance tasks, and what’s left are fewer staff doing higher-skilled jobs.
Rising demand for expertise like data analytics amidst a growing mountain of financial and non-financial data has left gaps in the skillsets of many finance functions. Investment, for example in financial planning and analysis skills, will generate insight and foresight to enable CFOs to plan for a strategic future.
2 Engage key stakeholders outside of finance.
The CFO role has broadened so substantially it is no longer possible for the job to be done effectively from within a financial silo. In order to be an effective strategic advisor, business partner and technology evangelist, CFOs must forge closer relationships with their Chief Marketing Officers and Chief Information Officers.
As the proprietors of customer data, CMOs offer CFOs visibility into the front-end of the business, and their data is a trove of insight into future demand. CIOs are the custodians of technology. They offer guidance on the game-changing technology strategy that CFOs are increasingly being called on to spearhead, and the capability to implement it.
The CFO must act as the conduit through which innovative marketing, colossal data collection and business-enhancing technology merge into a strategic competitive advantage.
3 Make time to understand the front-end of the business and link it to the back-office
In the rush to appease increasingly demanding digital-savvy customers, resources and strategic attention have been focused on front-end operations. This has sometimes stymied the aspirations of CFOs for their own finance function, and done nothing to engender cooperation between the front and back offices. When they operate in silos, the customer experience suffers and unproductive time is spent mediating between them.
Understanding, and linking, front and back office systems allows CFOs to make much quicker decisions and spend more time on strategy and business analysis, while ensuring a seamless customer experience.
4 Standardise and automate
At every level of the organisation, standardisation and automation form the building blocks for improved processes, cost savings and competitive innovation. Whatever the constraints on resources, CFOs must prioritise standardisation and automation.
It enhances the accuracy of forecasting and liberates CFO time to spend on value added initiatives like business partnering, innovation and process improvement. And it liberates finance staff to up-skill to more strategic roles, like analytics and planning, adding value across the finance function.
5 Focus on non-financial data
Financial stewardship is the backbone of the CFO role, but to meaningfully steer a business in the digital era requires much more than just number crunching.
The volume and variety of non-financial data is exploding and it can provide crucial visibility. From web analytics to customer satisfaction surveys to supply chain information, CFOs must draw on this rich seam of corporate intelligence to generate more accurate, faster forecasts and well-rounded strategic plans.
With more inputs, these plans will be more widely accepted within the business giving rise to higher levels of trust and confidence.
Change requires vision, resources and an effort of will. Effective CFOs shouldn’t wait for the Christmas recycling to start ringing in the changes.
May we take this opportunity to wish all members of the FSN Modern Finance Function on Linkedin, wherever you are in the world, a wonderful festive break and a peaceful & prosperous New Year!!