The role of the CFO has evolved. CFO 1.0 was a historian of past performance. CFO 2.0 was a real-time analyst. Our research reveals a radical new remit for finance decision makers as drivers of strategic change and visionaries of the future. This is CFO 3.0.
Technology may be the enabler driving this change, but the extent to which it transforms a business lies with those who are bold enough to take the lead.
It’s clear that the modern CFO will need to be versatile—marrying accounting, analytical, business and strategic-thinking skills into one package.
CFO 1.0: The historian
CFO 1.0 is a historian of past performance. A strong individual with high financial acumen, this role reflects the traditional view of the finance professional as a historian of company financial data and past performance.
While there is still a place for traditional skills, forward-thinking CFOs need to spot issues and make decisions in real-time and predict the future, aided by data and technology.
CFO 2.0: The real-time analyst
CFO 2.0 uses real-time data and dashboards to provide the support and analysis that helps a business improve operational and management performance. While CFO 1.0 can tell their colleagues what happened, CFO 2.0 can add the “why” and help the organisation use data to gain critical strategic insights.
And while CFO 2.0 can catch issues as they occur, they can’t accurately see where these issues are happening ahead of time.
CFO 3.0: The visionary
Our research reveals a radical new remit for finance decision-makers as drivers of strategic change and visionaries of the future.
We are in the age of CFO 3.0 – a new breed of trailblazing finance leaders who use data and emerging technology to create a vision for the future of the business and who are often in the driving seat of digital transformation. Instead of just using a rear-view mirror, data and predictive analytics allow them to look ahead and plot a new direction, making them one of the most valuable members of the C-suite.
The evolution of the CFO means many finance professionals now have an integral role in data governance, data flow and cybersecurity. This leads to more performance analysis and innovating the business model. This new remit will become key to unearthing new commercial opportunities.
Your journey to CFO 3.0
Whether you are already embracing emerging technology and driving digital transformation in your organisation, or you’re at the start of your journey to evolve from CFO 1.0, there are a couple of steps you can take.
Start by assessing your finance function and focus on dealing with risk management, getting up to speed with digital transformation and ensuring the team undergoes ongoing training. Then look at technology literacy skills – they are essential to the future of an effective finance department. It’s worth pointing out that, as our research demonstrates, more than two-thirds of CFOs still make decisions based on gut feel.
The changing dynamics of your job mean you need to keep learning to have the business, analytical and data skills you and your team require.
Leading a finance team to achieve its new function
As a finance leader looking to run your function effectively, you need to ensure your team is aware of its changing role. Crunching the numbers still has a place – and remember, automation can help with this – but so does the role of analysing and interpreting data to make key business decisions.
The finance team is there to evolve the business and it’s your role to look beyond the traditional boundaries of the function and make the sort of impact that drives the company forward.
By combining analytics, digitisation and the right blend of personal skills, you can make that a reality.