Close the spreadsheets, put down the balance sheets, and look up from the books. Chief financial officers (CFOs) focused exclusively on the numbers are missing real opportunities to support innovation and create value for the business.
In my career as a CFO and now in my work as an SAP ambassador, I’ve witnessed a dramatic shift in the responsibilities of finance executives. Many CFOs are taking a more strategic role in the business, leading on issues such as corporate portfolio management and capital allocation, performance management, and investor relations. Perhaps more importantly, these CFOs are increasingly viewed as an architect of business value.
This shift is especially notable in companies where industry disruption threatens to change established processes and models. This week, for example, I met with the CFO of a postal organization in the Pacific region. Facing significant revenue losses caused by the growth of digital technology, this executive is leading new initiatives to transform the business so it can address current market realities. In a meeting with the board, she aimed to explore new markets, growth opportunities, and changes that could help the organization provide new customer value. The CFO is also meeting with leading global consultants to gain external insight.
Another client, a property development company with holdings throughout Asia, is experiencing similar challenges. Thanks to the growth of online shopping, retail trade is declining at its malls. The CFO there is actively designing initiatives that will add value to the existing business and support transformation that will enhance competitiveness.
Partner with other CxOs
As roles evolve, so does the relationship of CFOs to other C-level executives. With the support of a strong controller or deputy CFO who handles the day-to-day financial aspects of the business, today’s CFOs can focus on partnering with the chief operating officer, chief information officer, and even chief strategy officer on business transformation. Often viewed as first among equals by the company board, CFOs can lead team efforts to improve company performance, optimize process efficiencies, and identify early market opportunities.
Complexity – of processes, systems, and technologies – is the chief obstacle to success. By concentrating on simplifying, standardizing, and optimizing business processes, executives can reduce this complexity and focus on the changes needed to enhance both company performance and business value.
The Pacific postal CFO, for example, brought a multimillion-dollar financial management solution to the board for approval. Firmly believing that this software would help streamline and simplify financial management, she took responsibility for this initiative and asked the board for support. In past years, the CIO would have spearheaded such an effort, with the CFO as a client.
Transform or die
Acting as the financial gatekeeper is no longer enough for today’s CFOs. To help their businesses succeed, CFOs must take responsibility for executing critical business transformation initiatives.
This blog series will focus on the change that CFOs must deliver in the next few years. For now, the question is: Are you ready to transform your business to meet the challenges of today – and tomorrow?
Get more on the importance of working across the C-suite by reading The CFO-CIO Connection: Creating Strong Partnerships For Greater Performance.