Lance Gilmour, VP Enterprise & Partners at Sage, offers some solutions
Today, chief financial officers are expected to do far more than number crunching. They are now a strategic partner to the CEO that contributes and provides guidance on company innovation and efficiency. They are expected to turn regulatory burdens into a competitive advantage and give strategic guidance on areas, such as growth.
In a recent survey of CFOs by Ernst and Young, almost 70 per cent said they were spending more time on providing analysis and insight to support senior leaders and decision makers than they were five years ago. For today’s CFO, their role is no longer simply operational – whatever keeps the rest of the business awake at night will also keep them awake.
Due to the changing role of the CFO – moving from a traditional accountant role to a strategic business advisor – there is more pressure than ever before from a wider range of sources. This is something CFOs must address as part of their day-to-day role.
But what is currently causing the biggest disruption? Economic uncertainty and increased regulation? Internal challenges over data responsibility and compliance? Inability to see how the company will develop? Or attracting and retaining top finance talent? Sound familiar?
Change your mindset
The current state of global politics and ensuing economic uncertainty means CFOs are seen as responsible for helping their business overcome some serious hurdles. Tackling such challenges can be quite a task, and there is no easy fix. However, there are ways to offset the potential impact.
Getting ahead of changes is one way to mitigate the disruption. For example, rather than being pessimistic about how potential changes will affect your business, CFOs should remember that disruption often comes hand-in-hand with opportunity. The business that can position and prepare themselves effectively for these changes will gain a competitive advantage.
With a constant emphasis on compliance, it can be tough for the CFO not to be seen as the negative voice at the table when the board wishes to implement a strategy which could be seen as risky.
Collaboration is key. When a new IT strategy that impacts multiple departments is being proposed, a team made up of the CFO’s and CTO’s office should work together from the outset to assess the benefits and risks. Once signed off by the board, taking this collaborative approach will make it easier to develop a strategy to engage colleagues appropriately. Effective colleague engagement will foster an understanding of why change is needed and the role they can play in making the strategy a success. Colleague engagement will also ensure that adoption of new systems across the business runs as planned.
Use predictive analytics
Much like economic uncertainty, future demands from customers and employees can be hard to predict, particularly with the pace at which the world and innovation moves. To stay relevant, CFOs must be able to provide insight into future trends, as well as position the company to make the most of the opportunities and avoid the pitfalls.
For many businesses, a great way to do this is by observing patterns in previous customer and market activity and using that understanding to plan for the future. For example, predictive analytics, which uses artificial intelligence, can be like having a crystal ball into the future health of a company. It can give the CFO the scope to get ahead of any potential challenges, such as staffing issues or the need to invest in more infrastructure or drive into new markets.
Build strength in depth
As the business landscape continues to evolve, so will the challenges CFOs have to navigate. The demands on the CFOs time and attention will also increase, with responsibilities reaching beyond the finance department. Having the capability within the team to allow them to delegate responsibilities to the rest of their team will be crucial.
With the right team and support in place, CFOs can handover tasks to other team members with the right skillset, freeing them to focus on providing advice and leadership. With this in mind CFOs must not only invest in developing their teams, but they must also take a forward-thinking approach to recruitment. Employing and equipping team members with the skills and attitude you need now and in the foreseeable future can be an effective way to add value to the wider business.
For CFOs to be effective and add real value in today’s new business landscape, they need to look beyond the pressures traditionally associated with their function to understand what the landscape of the future might look like; by taking the right approach to team structuring and investing the time to understand customers and market behaviour, the CFO will be able to position themselves as a valuable influencer today and for years to come.