Digital transformation isn’t merely a strategy to meet market expectations with technology adoption – it’s also about aligning people’s roles and responsibilities to business goals.
The changing role of the CFO is a perfect epitome of this evolution. Traditionally, the CFO’s sole priority was to oversee financial planning, cash flow monitoring, optimizing budgets, preparing reports, and so on. Simply put, they were responsible for creating financial value.
With the influx of digital tools, platforms, and processes, they started to play a more integral role in achieving business transformation. In 2021, the CFO dons a more strategic and cross-functional leadership role. Some of their updated responsibilities include:
Enabling business excellence and growth
The CFO is a strategic advisor to the CEO – given the increasing number of functions under their purview, including legal, vendor procurement, facilities management, etc. By encouraging the enterprise-wide adoption of cloud and data analytics, CFOs can work in tandem with CEOs to manage technology transformation, avoid infrastructure and software wastages, etc.
The unexpected growth of the subscription-based business application ecosystem has also left enterprises scrambling to meet SOX, IFRS, and GDPR compliance rules. It has led to the CFO’s role expanding to achieve more synergy with CIOs in order to help their enterprises navigate past new risks and comply with regulations.
The SaaS ecosystem has also better equipped them to manage their teams. CFOs can get their hands on accurate data insights based on performance management tools to establish targets, set metrics, and offer incentives. Now, they can be flexible enough to spend more time and effort in cross-functional collaboration to help grow the enterprise.
10 steps in the modern CFO’s transformational journey
The CFO has become an agent of change in modern-thinking enterprises. Spearheading multiple functions, they have turned into chief decision-makers and business strategy planners. Let’s look at the top 10 steps in any modern CFO’s journey.
Preparing for the new normal
The unexpected COVID-impacted business climate accelerated the need for CFOs to take a value-based management approach. With hiring freezes, travel restrictions, and virtual events, the cost savings have been unexpected too.
They should focus on moving capital investments to fuel business growth. Furthermore, experts have already claimed legacy ERP is outstaying its welcome due to its inability to deliver real-time value. Moving to the cloud is just as much a CFO’s priority as it is any other C-suiter.
The fact is that there’s no telling what the next new normal may be for enterprises. The only surety is that the CFO’s role will continue to evolve and grow in importance.
– Mr Centhil Eswaran is Practice Head of Enterprise Solutions at Aspire Systems Ltd. Views are personal.
(Edited by : Yashi Gupta)