The role of the Chief Financial Officer (CFO) continues to evolve. Tasked with steering their businesses through volatile economic times, CFOs used their expertise in cost management and operational efficiency to ensure the survival of their organisations.
Those who succeeded earned the respect and confidence of executive management, the market and external shareholders, helping to elevate the role of CFO from financial steward to corporate strategist and change agent.
Today, CFOs must find new ways to sustain performance and grow the business.
Rapid technological change and economic volatility, more empowered consumers and employees, and more active government intervention have combined to disrupt traditional business models worldwide.
To manage this disruption and find new ways to achieve sustainable, profitable growth, CFOs of leading organisations must identify and invest in business transformation initiatives.
An online survey of 930 CFOs across Asia, Europe, Middle East, Africa, Latin America and North America was conducted by Oracle and Accenture to understand how finance executives are leveraging their growing influence revealed surprising results: The CFO's role is becoming more strategic and influential, but there are challenges to their ability to be the key catalyst for change across the enterprise.
To become an effective change agent requires CFOs to demonstrate strong leadership, have both commercial and strategic insight, and the ability to overcome organisational resistance.
Strategic and Influential
As the CFO's role becomes more strategic and influential, the tools and structures that served finance leaders well in the past may no longer work so well. Cost levers that used to be effective are becoming less so as margins become squeezed and incremental operational efficiencies are harder to uncover.
Volatility makes it more challenging to set priorities and plan for future investments. Complex organisational structures hamper the ability of CFOs to gain visibility into performance across the enterprise.
Disruptive technologies, such as big data, cloud computing, mobile and social media, have given rise to new forms of competition that are challenging even the most established enterprises. Many companies worry that further cuts, particularly to headcount and fixed assets, may make it more difficult for them to take advantage of growth opportunities when they emerge.
Over the past few years, managing profitability and cost, and initiatives to conserve cash and maintain working capital flow have been the top two priorities for CFOs. This focus on cost management will become increasingly difficult to maintain without recourse to emerging technologies. Recognising the critical enabling role of technology, most finance leaders are closely involved in IT investment decisions and in managing IT infrastructure.
Since the financial crisis, CFOs are increasingly expected to be strategic thinkers and business partners as well. Their broadening influence—over IT, procurement and operations as well as finance and strategy—position them well to become the catalyst for change in their organisation.
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