Today’s CFO is no longer merely the chief number cruncher. As the business budget process and deal structures have evolved over the years, so too has the role of the CFO.
Now CFOs and budget managers focus on how they can add more value to the management team beyond just data. This is an opportune time for CFOs to step into the role of strategic partners and contribute to the operational vision of the organization. As CFOs become leaders, they can use their unique mix of financial know-how over a larger organizational arena.
There’s little doubt these changes can benefit organizations over the long run. And those embracing them are likely to see results: better growth, improved decision making and more efficient processes.
The shift is on. While this changing landscape might have been a long time coming, it’s been embraced only in recent years. The question many might be asking is: when did this change begin?
CFOs Move out of the Back Room
The role has been evolving over the last decade or so. While the increasing complexity of deals has certainly been a factor, some point to the 2007-2008 financial crisis as another. It was during that time many businesses realized how much vital information a CFO had. They felt the CFO had to become more visible and a key contributor to the strategic side of the business.
As the economy improved, the shifting responsibilities of CFOs stuck. Now more CFOs are embracing for the potential for larger parts in their organizations.
In fact, we continue to see that shift today.
In a 2016 study by McKinsey, researchers found 41 percent of responding CFOs spend the majority of their time on non-financial areas. And the majority of that time is spent on strategic leadership, organizational transformation and performance management. None of these key areas would have been in the CFO’s portfolio in the past.
The expansion of the role means the CFO is not only tasked with working within the finance department but also with reaching out to other business units to discourage siloing and to create a more cooperative and collaborative workforce. This team approach is especially critical when in performing tasks such as business budgeting and financial forecasting.
Where Collaborative CFOs Can Shine
A CFO focused on collaboration and leadership can do a lot more than boost company morale. Taking ownership of cross-departmental collaboration means the best data and insights are captured. That translates into a clearer vision of operational opportunities and risks.
Today’s businesses want to be agile. Competing in a dynamic market means decision makers need data that’s timely, accurate and easily understood. The CFO who can manage this process is poised to be the vital link between data collection and informed decision making. Much of that starts with the budgeting and forecasting process.
Another area where the CFO can look to is increasing growth over both the short and long term. Part of this goes hand-in-hand with being agile and capitalizing on the right opportunities. But another side of it comes with looking at the business from a strategic perspective: what will increase organizational value?
Automation and cloud computing have to be included as factors here as well. As more big data streams in, CFOs can utilize these tools to analyze what-if scenarios, create dashboards and zero in on KPIs (both financial and non-financial). The CFO can understand everything from cash flow to sales and marketing. That arms them with a powerful arsenal.
Being able to harness all of this potential is where forward-thinking CFOs can thrive. Focusing on where they can add value to the organization is a good first step toward becoming indispensable.
If you’d like more insights on how CFOs can take a leadership role in improving the budgeting process, sign up for this week’s webinar: The CFO Playbook on Leadership: How CFOs Can Make Budgets More Effective. This webinar will explore the tactics and strategies CFOs can utilize to see results in the budgeting process. Click here to register.
Businesses of every description rely on the Budget Maestro™ family of software solutions by Centage Corporation to improve the efficiency and effectiveness of their business budgeting and planning, financial forecasting, financial consolidation and reporting processes. For more information, take a tour of Budget Maestro, contact Centage, or call 800-366-5111 now.