The term ‘Chief Finance Officer’ barely does justice to the repertoire of responsibilities the modern CFO shoulders. Outside the realm of their core competencies of financial reporting, compliance and audits, their voices are heard more strongly in matters of capital allotment and corporate management decisions.
It would be an understatement to say that this is only the tip of the iceberg. The role of these former bean-counters is poised to skyrocket in importance in the coming years. However in reality, finance personnel still struggle with toggling between their two most important mandates: operations and strategic planning. Experts suggest that in an ideal world, CFOs must spend only 10% of their time on transactional activities while the remaining 90% must be spent on their analytical roles. At a time when layers of complexity wait to be addressed, most CFOs are still bogged down by the daily tactical rigmaroles of reporting and number-crunching, with little or no time for ‘big-picture thinking’ that is expected of them. It’s quite obvious that the CFOs of today have their work cut out in charting their paths towards growth. But what are the top issues that keep them up at night?
Data, Data Everywhere
In a paradox of sorts, the abundance of data has become the source of trepidation for many CFOs. At a time when they have unbridled access to massive amounts of information, their jobs of handling it are becoming proportionally complex. Especially, if CFOs are steeply inclined towards purely finance-related functions, managing great volumes of data becomes nothing short of drudgery.
But to those who have realized its benefits, data and analytics have proven to be crucial for businesses to find new markets and new verticals to generate greater revenues and also for understanding and controlling costs. Though a CFO’s forte may not lie in data science, it is important for him or her to be the connect between business and data. The insights gained from avidly monitoring the wealth of data are invaluable assets that a CFO can bring to the C-suite and aid smarter business moves. Today there is a huge opportunity for CFOs to partner with their companies’ CIOs in order to ‘own’ analytics and take a data-driven approach to strategic planning.
Putting Together The A-Team
It should come as no surprise that human resources (especially the best ones for the job), hold great promise for the welfare of an organization. The mettle of the 21st century CFO is tested by the exacting standards with which new hires are attracted and retained. CFOs are now handed the challenge of identifying candidates that display prowess not just in finance, but also have a keen sense of analytics and clear communication. In fact, a study by Accenture reports that by 2020, companies’ most essential talent will not ‘finance’ talent at all – they will be a melting pot of data scientists, economists, behavioral scientists and statisticians. While this makes the hunt for potential targets even more trying, it is expected to revolutionize careers in finance.
A thoughtfully handpicked, versatile team means freeing up a CFO’s time for more innovative and strategic roles. Clearly, the team hired by the CFO has a direct impact on not just his own team but the organization as a whole.