CFO and Technology » How Finance 4.0 has changed the role of CFO

How Finance 4.0 has changed the role of CFO

CFOs looking to future-proof their finance teams are going to have to make tough decisions regarding talent and digital strategy

Panellists:

  • Rohan Hewavisenti, CFO, Amnesty International
  • Nick Lakhani, CFO, calfordseaden
  • Richard Moorin, Head of Finance, Sage Intacct

Chief Financial Officers (CFOs) – the people in charge of businesses’ balance sheets.

And yet, their role now encompasses crisis management, strategic leadership, and organisational change. In fact, over the past decade, and in recent years exacerbated by the pandemic, the role of the CFO has evolved dramatically, with the shifts in responsibility linked to fundamental changes in how businesses and people work.

“This evolution means finance leaders have moved on from just being holders of the purse strings and keepers of historical records,” says Jonathan Howell, CFO at accounting software provider Sage.

“They are now future-focused strategists, and advisors capable of providing guidance and commercial insights where their businesses need them most.”

At a recent event hosted by The CFO, in partnership with Sage, finance leaders discussed how their roles and associated responsibilities had evolved over time, and the role technology has played in aiding and abetting this change.

Multiple hats

“Over the past ten years, and even going back to the 2008 financial crisis, the role of the CFO has been elevated and enhanced,” says Nick Lakhani, CFO at calfordseaden.

“We have been asked to drive decision making, and since boards and other c-suite [executives] have realised we can be seen as a trusted advisor, they want to get more out of us.”

According to Sage, 80% of UK finance leaders have become more involved in digital transformation, environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) initiatives.

Meanwhile, 78% have found that they are increasingly supporting data and cybersecurity decisions, IT purchasing choices and strategy and future planning.

Investing in technology

In today’s environment, the onus on CFOs to influence company strategy and build deep resilience has never been more prevalent.

Lakhani went on to note that he felt he got greater backing from other members of the management team because they felt he knows what he is talking about regarding strategy implementation and broader company goals.

This made investing in new technology – aiding his team to make data-driven decisions – a lot easier.

As a result, CFOs and their teams have been able to move from being solely reliant on historical data, to be able to utilise real-time analysis, as well as predictive modelling and forecasting. This has helped businesses see around corners, and take a more proactive, rather than reactive, approach.

According to Sage, around half of UK finance leaders say their organisations are prepared for integrating new technologies (51%) and upgrading software (49%), with UK-based CFOs leading the way with regards to the integration of emerging technologies when compared to their US counterparts.

Sourcing talent remains a challenge

As the role and responsibilities of the CFO continue to change, the skills and competencies of their wider team must evolve too – a shift in who finance teams recruit has occurred as a result.

UK finance leaders are now prioritising digital skills over financial experience. The emergence of big data and the increase of artificial intelligence (AI) functionality within financial software has led almost two-fifths (38%) of organisations to target candidates with deep data and AI expertise, according to Sage.

“Recruitment is a challenge for everyone at the moment, so it is hard to be choosy,” Rohan Hewavisenti, CFO at Amnesty International, noted.

“We at Amnesty International have turned to less traditional channels – like social media – to find candidates to attract a different type of talent.”

Attendees of the event reported looking to different pipelines when looking for future talent, turning away from traditional avenues such as finance and accounting degrees.

“An accounting degree does not really give you an idea of what working within the finance function means,” according to Richard Moorin, head of finance at Sage Intacct. “Finance graduates come in with an expectation of what the role is going to be like. Those coming in younger, from apprenticeships are generally hungrier.”

For Lakhani, soft skills are in high demand at Calfordseaden.

“I need people with the right attitude and communication skills – technical skills should be a given when people apply,” he said. “We need people who are not going to be afraid of failure, who will learn, and will embrace a ‘growth-mindset’.”

The role of ‘Chief Fairness Officer’ has recently become synonymous with the traits of a CFO. They are defined by their empathy and focus on people, not just profit.

Sage notes only a quarter (26%) of UK CFOs say they demonstrate the skills of a Chief Fairness Officer, and UK finance leaders say they are under less pressure to prioritise employees than their peers in North America.

As a manager, Lakhani said he expected his teams to engage, empower and enable – the three E’s of any finance team. “My role as CFO is to create an environment where people can thrive, not just survive,” he said.

Both CFOs noted there was a challenge around retaining staff – especially those from older age groups who may struggle as the finance function becomes ever more digital.

“We need to make sure we appreciate the different skill sets each generation has, and what they can learn with regards to our expectations,” Hewavisenti said.

Mentoring was suggested by event attendees as one way to ensure skills were transferred among team members.

Looking to the future

Given the ever-expanding role CFO’s play within their organisations, their responsibilities must encompass more forward-looking strategic objectives. With that in mind, CFOs have also taken on the persona of Chief Future Officer.

They plan for new technologies, market changes and world events, which could impact the operations of their organisations.

In addition, they believe that the issues holding their organisation back are the ability to integrate new and emerging technologies, the remote and hybrid work environment, and a lack of diverse talent in their organisation.

There is no doubt the future (and arguably redefined) CFO is poised, not only to prepare for disrupt, but also to disrupt how businesses do business – hopefully for the better.

For more information on how CFOs are redefining their roles, see Sage’s latest research here.

Comments are closed.