The role of the CFO in the modern enterprise is in flux. While traditionally the CFO played the role of approver and budget enforcer, today’s CFOs are strategic partners in the business. The C-suite relies on their insight and experience to drive business growth.
While this role has changed, not all CEOs are confident in the ability of CFOs to meet the challenge. According to research conducted by KPMG in 2015, nearly 33 percent of global CEOs are concerned that CFOs aren’t prepared for these new challenges.
When the more traditional responsibilities of the CFO – things like sign off and budget tracking – are expected, a high-performing CFO must embrace a new set of skills and take on additional strategic responsibilities. To do this effectively, today’s CFOs must lean on new tools that simplify and automate tasks while offering deeper insight into company performance.
The Changing Role of the CFO
The challenge of the modern CFO is incorporating the expected technical and fiduciary responsibilities of reporting, compliance and controllership, with a whole new set of expectations. These include connecting the dots for other leaders between strategy and goals and contributing to operational decision-making.
CFOs need data to help other decision-makers define goals. That same data is what will help the office of finance draw a line between strategic objectives and financial goals. To do that, CFOs need to be able to gather data from across the organization and frame it in the context of the company’s aspirational direction. They must understand what the data is telling them, and be able to communicate to the rest of the C-suite and the organization as a whole what that data means for the company’s day-to-day operations.
Understanding the data isn’t enough, however. Today’s CFOs must also be the ones to define financial metrics. These metrics must be meaningful, measurement of them must illustrate the company’s current trajectory when compared to its roadmap and plans, and must not be so overwhelming as to cause “analysis paralysis”.
The traditional tasks assigned to a CFO were a fulltime job. To be successful with these evolved responsibilities, CFOs need modern tools that simplify both the financial management aspects of their job and the deeper analysis and strategic consulting that is now considered part of their role.
A New Breed of Tools for a New CFO
For many CFOs and financial teams, spreadsheet tools like Excel have been the standard. This ubiquitous tool of the office of finance did what was needed, and even if it created challenges and overhead, it was familiar.
Unfortunately, with new demands on them, CFOs need to find new tools that streamline their responsibilities. Finance tools must be flexible and collaborative. And just as important as these traits, finance tools must also provide features that allow for data analysis so that CFOs can answer the questions of the C-suite and the board of directors while providing insight into business drivers.
To make the CFO’s job easier, financial planning and forecasting tools should automate tasks whenever possible. Automated updates to balance sheets and cash flow and income statements result in accurate reporting and projections throughout the year. CFOs have access to immediate answers about where the business stands without needing to update fields and incorporate actuals.
To gain insights and define business drivers, CFOs need data at their fingertips that is understandable at-a-glance, but also facilitates deep dives when needed. With a tool that integrates data sources from across the company, CFOs have a 360-degree view of performance so that they can report on the financial metrics they have defined. This creates an agile organization that can turn on a dime if the market doesn’t support the company’s initiatives or if objectives must be refined to meet strategic goals.
This data leads to the kind of analysis that informs strategic drivers for the organization. If the sales team is focused on quantity sales, but the market isn’t supporting that, a company can pivot to try new tactics to meet their goals. With this kind of analysis, CFOs can communicate quickly where a company is at, and how that will impact both the financial goals and strategic objectives of the organization.
To meet the demands of an evolving role, modern CFOs must be willing to take on the financial management and strategic guidance of their companies. Their jobs become more difficult without tools that can automate the more mundane tasks of financial management and offer insights into organizational performance. With the right information, however, CFOs can embrace their new responsibilities as strategic business partners to the C-suite.
Centage Corporation’s Planning Maestro is a cloud-native planning & analytics platform that delivers year-round financial intelligence. With Planning Maestro, Centage offers the sophisticated features needed by small and mid-market organizations to integrate budgeting, forecasting, and deep data analysis within one easy-to-use, scalable SaaS solution. For more information on how to modernize your office of finance with intelligent planning, view our product demonstration video, or call 800-366-5111.