In previous columns, I have explored many ways in which the CFO’s role in the enterprise is evolving and expanding. From closer collaboration with other C-suite members, to taking on new responsibilities when it comes to cutting-edge technology like machine learning, and being vigilant to cybersecurity threats, the CFO must be a jack-of-all-trades in a world of digital business.
A new global survey of 1,500 finance executives, conducted by Oxford Economics and SAP, confirms what other finance veterans and I have suspected: CFO responsibilities are no longer limited to finance, but increasingly are expanding into strategic leadership – in fact, 88% of respondents report that the CFOs in their organizations are becoming more involved in strategic decision-making outside of finance.
So, what factors are influencing and supporting this evolution of the finance function? The survey confirms three areas as increasingly critical for CFOs: collaboration across the enterprise, automation to drive efficiency, and increased attention to cybersecurity.
Finance can no longer exist in silos
Nearly all respondents noted close collaboration between finance and internal audit, risk management, and compliance operations – areas where finance overlap is expected. However, often this collaboration can fail to extend to other areas of the business – and according to the survey, this can be a huge handicap when it comes to driving success in an increasingly competitive environment.
In fact, in looking at survey respondents with zero or negative revenue and profit growth, 46% say an isolated finance function keeps them from achieving their business goals. Furthermore, an isolated finance function is an even greater issue at larger enterprises, where 33% of respondents agreed a disconnected finance function hurts business, compared to 16% at small businesses.
In today’s digital world, finance departments need to be integrated and connected across departments to drive business success. By bringing valuable analysis outside of the finance function, CFOs can demonstrate the impact to overall business strategy and foster a culture of collaboration across the enterprise.
Automation is critical for driving efficiency
Efficiency is top of mind for CFOs today – in fact 52% of survey respondents cited improving efficiency as a top business goal. However, many finance teams still find themselves trapped by archaic manual processes that can consume unnecessary time for employees and often create redundant work scenarios and system errors.
There is a huge opportunity for finance to streamline and automate many of its core, transaction-focused tasks that happen on a monthly, quarterly, and annual basis. In fact, nearly three-quarters (73%) of survey respondents agree that automation is improving the finance function’s efficiency within their organization and gives executives more time for value-added tasks that require human judgement like fraud detection, compliance, data analytics, and/or driving business strategy.
To streamline finance tasks, organizations must adopt new technology – this was a claim strongly echoed in the survey by 91% of respondents. And while much fear about job loss has circled the industry when it comes to conversations about automation, the survey found this is not the case in the real world. While leading CFOs are committed to improving efficiency, they are not reducing staff – finance headcounts have remained consistent in the past two years, with 85% of respondents noting finance headcount has remained steady. Just three percent say it has fallen, and only four percent feel that automation is causing finance jobs to disappear in their organization.
Cybersecurity may be a blind spot
While the digital transformation continues to stretch the role of the CFO today, one responsibility that remains central to the finance function is optimizing risk management and compliance, with 97% of respondents citing strong decision-making authority over risk monitoring and assessment, and 93% saying the same about ensuring compliance.
As companies entrust transactional operations to emerging technologies that increase the number of endpoint connections, from IoT devices to new technology tools, one of the growing challenges facing government, risk, and compliance (GRC), and finance teams today are cyberthreats. Sixty-eight percent of finance leaders in the survey name cybercrime as a top business risk, and this statistic jumps to 76% for the banking industry – a highly targeted market. However, in the broader landscape, cybersecurity might be a blind spot for many GRC and finance teams. Only 46% of the risk and compliance chiefs in the survey cited cybersecurity as a top threat.
What this data suggests is that both finance and GRC teams may need to put more resources into strategy and planning around cybersecurity, as this is a huge threat to organizations today, affecting both performance and value. By aligning finance and GRC teams, organizations can take the necessary precautions to safeguard against cyberthreats.
As the digital economy continues to evolve, the pressure on CFOs and finance teams will continue to become paramount as they look to drive ROI and success for their organizations. By pushing collaboration outside of the finance function, improving efficiencies in transactional processes, and dedicating new resources to support risk management in the cyber age, finance teams can boost performance and establish leadership within their organization.
Learn more and read the full findings from the report, “How Finance Leadership Pays Off,” here.
This article originally appeared July 3, 2017, in the Huffington Post and is republished by permission.