It was once seen as essential for a Chief Financial Operator (CFO) to come up from the ranks of a finance and accounting path, but this is no longer seen as the ‘normal way of doing things’. Whilst a part of the role still requires financial knowledge, it is now equally important for a CFO to be data savvy and possess strong strategic skills.
The Evolution of The Finance Function
It is long been recognised that at times the finance department has been seen as being a back office function where little takes place except for the processing of expenses or the production of financial reports. Unfortunately, this can lead to certain operational departments of the business not exactly knowing the importance of these financial reports and the value in which the finance function can add. In recent years, this view of the finance function has started to change with the introduction of certain finance specialists who have shown the importance of the business fully partnering with the finance team. These specialists have deployed their skills to fully integrate the finance team into the business.
However, with the advancements in technology and data leverage, the finance function is again required to establish itself at the forefront of the business with organisations expecting more support from IT as well as finance to add value to the business. These ‘flurry’ of specialist skills has and will no doubt trickle down from the new skill expectations required of the CFO. Therefore, the need to upskill is extremely important in order to counter-act automation. Technology will drive the complete overhaul of the finance function.
Using Technology To Add Value
Whilst the Digital Age has increased the opportunities for the more tech adventurous CFO to flourish, the business is benefiting from this in the form of data led strategies and a strong emphasis and importance on digital transformation. Partnering with the IT function on knowing the feasibility of producing certain data driven reports is vital for organisations to benefit from technology advancements. This can be seen in the increased investment in software as a service (SAS) and cloud-based technologies. Keeping up to date on tech trends enables the CFO not only to use tech to generate value for the business, but in using data to generate change.
Strong strategic skills are still a must for a CFO, but as the external environment becomes more and more dynamic, the role for ‘business advisory’ is becoming ever more increasingly important within an organisation. This has become apparent in larger organisations which have now started to move the financial analysis part of the CFO’s role into another senior role. This has and will enable the CFO to be recruited from other backgrounds.
Data Strategy is an essential subset of Digital Transformation. Part of data strategy is about accessing the ‘gap’ between what data an organisation currently has and what data is needed for reporting – based on company strategy. Having a good Data Strategy can be extremely beneficial for a business in where business data can be leveraged in order to evaluate risk and seize opportunities.
Organisations now require the role of the CFO to capture, leverage and monetise the advancements in technology. This must be teamed with strong strategic skills in a business advisory sense.
A recent article in the Financial Times by Amy Bell, reported that (in addition to the traditional path) it will be the norm for the CFO to come from a Data Science or Management Consultant background. I believe that this is already happening. In support of this, some of the larger organisations are no longer requiring their CFOs to be fully qualified accountants. It will be interesting to see how these advancements in skillset enable a busines to adapt to it’s external environment.
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