Top 5 traits of the digital CFO
At the end of 2019 we released a white paper authored by leading UK accounting journalist Kevin Reed, which delves into the digitalisation of the finance department. Kevin explored the changing digital agenda, and how the evolving role of the finance department has meant technology has become even more important (in terms of enabling CFOs to get their teams ready for the digital age).
20 years ago, finance teams were still focused on number crunching and fulfilling legislative requirements. However today, the finance function now has a responsibility to help their organisation in meeting its commercial goals (through data analysis, forecasting and business partnering). So how can CFOs ensure they are prepared to support this change in direction?
Take a look at what we believe are the top five traits are of the ‘digital CFO’, and why they are crucial for any CFO looking to succeed in 2021 and beyond:
The Digital CFO needs to understand the impact technology can have on the finance function and the wider business. In today’s changing technological era, truly successful CFOs will see technology as an investment rather than a cost, and will look to new advances as a way to improve business performance.
The role of the finance department is no longer about just balancing the books, but ensuring the business is ready for tomorrow too. The Digital CFO needs to be able to predict the organisation’s future cash position, as well as the impact different scenarios will have on business performance. Having good analytics and reporting tools enables CFOs to become more operational and future-focused.
Driver of change
With the CFO increasingly at the right hand of the CEO, their role is to help drive business performance and strategy. Many organisations are now looking at AI, machine learning and the cloud to reduce manual tasks, and to drive business performance. Finance chiefs must ensure they are setting an example by embracing (and driving) change.
Adaptability in the face of compliance
Organisations hold vast amounts of confidential data and must be compliant with the latest legislative requirements. CFOs are under increasing pressure to ensure the business is meeting standards, and not at risk of paying hefty fines due to misgivings in this arena.
Expertise with non-financial data
Perhaps the most radical change that most CFOs will have experienced in recent times is the need to deal with non-financial data too. Analysing such information gives those in the finance department a better working relationship with other key stakeholders across the business. It also provides them with a more holistic view of performance, ensuring they are backing up the numbers with qualitative data.
CFOs and business leaders will already recognise a lot of these traits within themselves and their organisation. However, these characteristics will become even more crucial throughout the next decade as the finance function continues to evolve in conjunction with technological change.
As Andrew Hicks, CFO at Advanced, says: “The fact that technology can elevate the role of the finance department cannot be underestimated. Many tasks can now be automated through sophisticated and intuitive finance management systems, freeing up finance teams to provide value-add analysis. The right technology can even strengthen the relationship between the CFO and CEO, whereby the CFO acts as the CEO’s ‘sounding board’. It’s a position that is becoming more critical as technology gives ever greater levels of understanding and insight. So, there is no better time for the finance department to invest in technology, or they risk being left behind.”
If your business is looking to embrace the ‘digital CFO’ characteristics, take a closer look at our accounting software (which is perfect for manufacturing SMEs that are looking to grow). This solution is regularly updated to stay up to date with industry trends (and to stay in line with legislative changes). It also has powerful reporting capabilities and integrates all business functions, meaning your finance team have company-wide visibility, and can use this data to accurately predict future performance.