This year’s larger The Future of The Finance Function Survey 2017 was completed by more than 800 senior finance members from across the globe, making it once again one of the largest and most authoritative studies of its kind. And it didn’t disappoint in terms of its findings. It reveals a genuine shift in mind-set from first generation CFOs, the so called “bean-counters”, to a more enlightened second generation of CFOs for whom business partnering, strategy involvement and performance management is the new norm, alongside the more traditional roles of financial stewardship, financial governance and risk management.
Nevertheless, the challenges are formidable and there is little room for complacency if CFOs are to successfully make their mark in business operations and the boardroom. Last year’s study highlighted the need for process standardization and automation to help release valuable time that could be better deployed on business partnering and strategy development.
This years’ Future of The Finance Function Survey pinpoints a different set of concerns against the backdrop of continued pressure on finance headcount. Many CFOs are still finding their way in relation to business partnering. The roles and expectations of business partnering are not yet well defined and many finance professionals are involved too late in critical business decisions. Furthermore, the data needed to support effective business partnering is scattered, often hidden from view and incomplete. New sources of data that could be pivotal to competitiveness go undiscovered or under-exploited, not helped by the fact that many finance functions concede they do not have the technology skills to make the right technology choices. Finally, second generation CFOs have yet to define their role in relation to innovation or discover how finance innovation can add value to the enterprise.
So, what are the next steps along the journey towards the modern finance function – what we call the transition from second generation CFO to CFO 2.1. In many ways, the finance function of the future will need to be more outwardly facing, namely;
- Investing more time in business partnering and deeply understanding the nature of business operations in order to add more value to decision-making, rather than explaining the financial consequences of decisions that have already been taken.
- Exploiting new data sources on the fringes of the business that could hold the key to more valuable data-driven insights and potential pockets of growth.
Working more closely with software vendors to compensate for the deficit in skills and to help exploit the transformative potential of digital technologies.
- Mastery of business partnering, technology and data sets the framework for innovation.
Those CFOs that ‘grasp the nettle’ and invest in these three areas will not only differentiate the finance function but will also help set their organizations apart from the competition.