Compared to two years ago, CFOs report they are spending more time on their “operator” role and less in their “strategist” role, according to the results of a recent Deloitte Consulting LLP’s CFO Signals survey. And they don’t like it.
It’s a tilt that bodes badly for both CFOs and their organizations, diverting the CFO from the all-important task of helping plan for long-term growth.
These concerns and how to address them were the subject of a recent Webinar, “Leading the Way to Financial Excellence through Digital Transformation,” hosted by the Institute of Management Accountants (IMA) and attended by 930 finance professionals from 40 countries. Participants heard critical facts, figures, and findings from Susan di Zerega, director at Deloitte Consulting LLP and Birgit Starmanns, senior director for Product Marketing at SAP.
A tricky balancing act
During the Webinar, the speakers outlined the role of strategist versus operator, underlining why CFOs’ best intentions are being sidelined by pressing operational demands:
- The CFO as operator: focuses on the running and efficiency of the finance department; balances cost and service levels; defines and evolves finance’s operating model; deals with talent management
- The CFO as strategist: is a driver of strategy for the company’s future; provides to the Board a financial perspective on innovation and growth; improves risk awareness and decision making and translates expectations of the capital markets into business imperatives
Why CFO as strategist is needed now more than ever
Besides the CFO’s own preference, the list of why CFOs need to increase, not lessen, their strategic role is both long and compelling, rooted in technological concerns and in the accelerated pace of doing business. The Webinar highlighted some of the major trends showing why CFOs need to offload operational tasks and concentrate on strategy:
- External conditions are becoming increasingly complex.
- There is heightened pressure to support global growth initiatives.
- Millennials have put into play a whole new work style that embraces networks and mobility. Organizations have to keep up with them.
- The adoption rate of technological innovations is continually accelerating.
- There’s an ever-increasing requirement to reduce costs in the finance department.
- Cybersecurity is an ongoing source of concern in a business world powered by technology – and CFOs must contribute to critical decisions on risk management.
These factors are creating a new and more difficult reality for the CFO. While doing business in today’s complex global world requires greater strategic involvement, it also places greater demands on the CFO’s organizational responsibilities – a vicious and hard-to-break cycle.
Enter digital transformation: the CFO’s lifeline to greater strategic involvement
The Webinar highlighted how technological innovations can update, innovate, and streamline operational functions and procedures that divert time, energy, and resources from a CFO’s strategic focus.
A few examples of how new technologies bring balance to the CFOs dual roles of strategist and operationalist:
- Planning and predictive finance: The digital transformation allows for a single consolidated view of all planning and forecasting information. More options are available and fewer opportunities are missed because lag time for updates is eliminated.
- Financial close: New technologies make it possible to look at transactions in real time with continuous intercompany reconciliation and financial reporting visibility. Technology helps eliminate end-of-period batch bottlenecks and can be used to calculate key performance indicators.
- Fraud management: Top-down and bottom-up information helps pinpoint and focus on key areas of cyber vulnerability. Predictive models help detect patterns. New technologies also enable real-time performance analysis and automated mitigation responses to fraud, should it occur.
- Cash management: New cash management solutions combine analytical functions with related transactions. Integrated bank account management becomes available, allowing for the central administration of bank accounts and signatories. Nondisruptive cloud or on-premise deployment options can be utilized if desired.
The experts agree: new technologies are becoming essential tools in helping CFOs successfully reimagine their roles as they help reimagine their companies.
For more information on this topic, listen to the Webinar on demand on the IMA Web site.
To learn more about how finance executives can empower themselves with the right tools and play a vital role in business innovation and value chain, visit the SAP finance content hub, which offers additional research and valuable insights.
And join the upcoming live CFO.com panel Webinar with Deloitte on January 21, 2016, “Ask the Experts: Prepare Your Finance Team for Success in the Digital World.”