For finance professionals, the role of CFO is no longer the top rung of the career ladder. In fact, a recent survey of 200 UK chief financial officers found that 86% aspired to ultimately take the top seat as CEO. And it’s not just a pipe dream. CFOs are increasingly progressing to CEO – at time of writing 55% of FTSE 100 CEOs have a background in finance.
Finance is stepping out of the shadows and into the spotlight at the head of the boardroom table, but what exactly does it take to progress from CFO to CEO?
Direct impact on decision making
The first step for any CFO is ensuring that the finance function is making a direct impact on decision making at board level. If finance, and by proxy the CFO, appear to be contributing little then they are instantly at a disadvantage in making the step up.
In order to make this impact though, the CFO needs access to the right data to offer relevant insight and make informed decisions. However, it is often the case that a combination of outdated processes and inefficient tools – along with serious time constraints – make this difficult.
A huge 90% of CFOs acknowledge that they need to do more with their financial and operational data to assist in helping senior management make decisions.
This is no easy task, and one that’s only getting harder as the role of the CFO continues to transform. Historically, CFOs have been concerned with a few select activities including managing regulation, containing costs and consolidating their company’s finances. These responsibilities still stand, but the focus has shifted.
Now, CFOs have to prioritise data and insights. They are expected to produce management reports to review the company performance and make informed investment decisions; to provide granular operational data to understand costs and highlight savings opportunities; and to store and analyse benchmarking data to compare spend patterns.
Accessing this data is often anything but straightforward and extremely time consuming. In fact, according to the Concur Finance Leader Report, administrative tasks absorb 18% of a finance team’s time – almost a whole day every week. With such laborious data tasks, 64% of finance leaders believe they aren’t spending their time on the things they should be prioritising.
True business partner
If they are to take over the reins, the CFO has to make their presence felt in the boardroom by driving business change – but at the moment inefficient processes are preventing them from doing so. So what can be done to overcome these issues and improve finance’s contribution at the top table?
What’s needed in a nutshell is time. If a CFO can relinquish time from admin tasks, then the team can dedicate more resources to acting as a true business partner, sharing insights that support strategic decisions. And the only way to free up time is by adopting automation. In the last ten years, over 86% of finance controllers believe their processes have been improved – and the time spent executing them reduced – by automation.
Yet 37% claimed their expenses process was largely or entirely comprised of spreadsheets and paper, while 32% said the same applied to invoices. In a large company, managing and filing data in spreadsheets, from every client or employee, is extremely arduous – and correcting the inevitable human errors more so. When it comes to tasks such as expenses, invoice and payroll, automation can take on the heavy lifting – affording CFOs precious time to spend on strategic planning.
Ultimately, a strong financial background is a key attribute for a CEO, making the CFO a reliable candidate for the top position. But, for a CFO to reach the top they have to prove their worth in the boardroom. Finding the time to dedicate to boardroom-rocking initiatives can be difficult – but armed with technology and automation finance leaders can consistently deliver the strategic insight that senior management so desperately need.
And once that happens, it’s a matter of when, not if, you change that F to an E.