Modernising the role of finance need not cannibalise the CFO role

Rowen Grierson explains that the next step in the evolution of the CFO role is becoming a chief futures officer.

Change, rapid growth, equally rapid contraction, socio-economic factors, and market tensions are all moving parts of an increasingly diverse business world. Throw in digital technologies and the sheer cost of modern tech into the mix, and it could be argued that the role of the CFO is by no means easy, but it is one that needs to evolve. And evolve rapidly.

Over the last decade, what has become clear is that the CFO needs to embed themselves into more and more business processes – not just taking a seat at the boardroom table, but being part of the process from the very start, namely, where decisions are taken on where company resources (not just finances) are going to be expended.

Chief futures officer
“CFOs are in a sticky position. They need to evolve to stay abreast of modern business practices and technologies. However, they still need to keep their eye on the numbers and the bottom line," says Herman Singh, futurist and CEO at Future Advisory. "In a recent discussion, I posed the question, “How does a CFO move from being a bean counter to a barista?” In other words, how can you embrace the idea that you aren’t just a financial officer, but the chief future officer too.”

While the name chief futures officer has a great ring to it, and you won’t be spending any money updating your stationery as your title remains CFO, Herman cautions that the shift is not as easy as it seems.

According to Singh, 40 percent of CFOs indicate the biggest challenges they face on a day-to-day basis are in strategic planning and budget. They also note that 50 percent of their time is spent in processing transactions, 20 percent on reporting, 20 percent on controls, and less than seven percent of their time is dedicated to strategy.

“These numbers are criminal. CFOs are some of the brightest minds in a business, but we have them netted down sorting out the beans. There is no way that the current CFO 2.0 will ever evolve into a CFO 4.0 if there isn’t a mental and cultural switch alongside a rapid shift to technology,” adds Herman.

Planning the shift
Strategic CFOs, or CFO 4.0s, are a partner to the business with a focus on customer profitability. If we view the above measure of time the CFO spends on specific aspects of the business as a pyramid, with 50 percent of their time in transaction processing represented as the foundation and strategy at a meagre seven percent at the top of the pyramid, it’s time to flip the pyramid – urgently.

It sounds easy on paper, but how can a CFO break the bonds of time constraints to dedicate their time elsewhere? One way is by leveraging technology.

The CFOs I speak to all say they often must rapidly switch their focus from reporting on the business to supporting the business. And sometimes they make this switch multiple times a day. It stands to reason that as a leader in the tech industry, I am going to tell you to use technology to support you. So yes, use technology not just to support you, but to support the investments you have made in it.

Sound like a contradiction? CFOs can benefit immensely from shifting their focus from simply signing the cheques for technology to inserting themselves into the technology acquisition process. This way, they can get technology to work for them, the business, the people, and by being part of the process, they can change the way their company consumes technology.

Embracing performance gains
Digital agility and digital transformation are both exceedingly overused terms, but they hold immense merit when deployed effectively. The digital age is the biggest catalyst in forcing companies and their finance functions to change. So the CFO 4.0 is as much a digital CFO as they are a financial one.

Embracing digital technologies is only one part of the shift to modernising, not just the business, but the CFO role. Technologies allow CFOs to make the shift by enabling them to focus on real-time and flexible performance management that homes in on high-value insightful planning and analysis activities and the automation of these.

But it is more than just systems. There is no system out there that will, once implemented, negate the need for functional processes and magically turn the finance process into a one-button job. According to Singh, what technology does for the CFO 4.0 is change the rules, in some cases, disrupting them.

As a CFO, you need to take your role and lift it above the fray. With digital solutions that work for you, you should have the time to be able to do this. In short – you need to hack finance. And you hack finance by being part of the technology process at the start so that you can guide the decision-making to ensure that the systems you need are catered for. Think blockchain, think compliance, think process automation and analytics.

Measuring success
Where traditional finance measures success only by the bottom line, the CFO 4.0 measures it in customer satisfaction, customer retention, overall profitability, and business performance. But, making a shift to modernising the role of finance need not cannibalise the existing role of the CFO.

“If you want to move from bean counter to barista, you know that a barista still needs the beans for his role to be successful. No coffee is brewed without beans, and no good coffee is served without exceptional beans,” says Herman.

“So, the CFO 4.0 undertakes to be a strategist, an operator, a steward, and a catalyst to the business. They are not just a futures-driven person who speaks in technical jargon; they are able to ride the digital wave, face constantly changing challenges, deploy next-generation finance strategies, and have the technology in place needed to support their teams.”

In short, if you want to be a chief futures officer, you need to focus on the end game – and use what is at your disposal (technology included) to help you get there.