Digital transformation is not just a strategy to meet market expectations through the introduction of technology – it is also about aligning the roles and responsibilities of employees with business goals.
The changing role of the CFO is a perfect epitome of this development. Traditionally, the only priority for the CFO has been overseeing financial planning, monitoring cash flow, optimizing budgets, generating reports, and so on. Simply put, they were responsible for creating financial value.
With the influx of digital tools, platforms, and processes, they began to play a more prominent role in bringing about business transformation. In 2021, the CFO will take on a more strategic and cross-functional leadership role. Some of their updated responsibilities include:
Enable business excellence and growth
The CFO is a strategic advisor to the CEO – given the increasing number of roles within his or her area of responsibility including legal, supplier procurement, facility management, etc. By promoting the enterprise-wide adoption of cloud and data analytics, CFOs can work with CEOs to manage technology transformation, Avoidance of infrastructure and software waste, etc.
The unexpected growth of the subscription-based business application ecosystem has also led companies to strive to meet SOX, IFRS, and GDPR compliance rules. This has resulted in the role of the CFO expanding to create more synergies with CIOs to help their companies overcome new risks and comply with regulations.
The SaaS ecosystem has also made them better equipped to manage their teams. CFOs can use performance management tools to get their hands on accurate data insights to set goals, metrics, and provide incentives. Now they can be flexible enough to invest more time and effort in cross-functional collaboration to help the business grow.
10 steps on the modern CFO’s journey of transformation
The CFO has become an agent of change in modern thinking companies. In several functions, they have developed into key decision-makers and planners of business strategies. Let’s take a look at the 10 most important steps in becoming a modern CFO.
Prepare for the new normal
The unexpected, COVID-influenced business climate accelerated the need for CFOs to adopt a value-based management approach. With hiring freezes, travel restrictions, and virtual events, the cost savings were also unexpected.
You should focus on attracting capital investments to fuel business growth. In addition, experts have already claimed that legacy ERP is no longer welcome due to its inability to provide real-time value. Moving to the cloud is just as important for CFOs as it is for any other C-suite.
The fact is, there is no telling what the next new normal for businesses might be. The only certainty is that the role of the CFO will evolve and grow in importance.
– Mr. Centhil Eswaran is Practice Head of Enterprise Solutions at Aspire Systems Ltd. Views are personal.