The pace of digitalization has accelerated, particularly with the advent of AI and analytics. This has been further amplified by remote work trends post-COVID-19. Also, the introduction of RPA, a decade ago, marked a milestone in enhancing operational efficiency and cost savings. These transformations have redefined the CFO's role from traditional bean counting to that of a strategic business partner and driver.
With this, the emphasis on leveraging cutting-edge technologies for data-driven analysis, insights, and strategic narrative has become ever so imperative. Also, outsourcing initially streamlined non-core tasks has enabled CFOs to free up time, as today, they have to go beyond traditional financial management to shape business strategy and drive growth. Furthermore, CEOs expect CFOs to spearhead diverse functionalities right from managing business KPIs, to fostering growth initiatives, and overseeing critical areas like ESG, cybersecurity, and data protection. This greatly expanded role necessitates continuous upskilling for CFOs and their teams.
Additionally, in the field of data analytics, CFO’s have started recruiting data scientists and coders and not depend on IT function for basic tasks. They have also become the central custodian of financial and non-financial data within the company while concentrating on achieving a single version of truth. Hence, leveraging advanced analytics tools like Tableau and Power BI to drive insights and decision-making throughout the organization has become the need of the hour.
Navigating Challenges and Enhancing Efficiency
Today, the biggest challenge is the mindset change that needs to resonate across each and every member of a finance department. Every team member should understand the enhanced role and the importance of automation and data analytics. Driving this culture would be one of the key tasks of a CFO. Here, upskilling and continuous learning must be a constant process, wherein, every team member needs to spend a good amount of time on garnering new skill sets.
There should be a policy with respect to job rotation within the teams as well. The finance team should continuously keep themselves abreast of the changing business environment, including regulatory compliance and risk management. There is a growing trend wherin the CFO is also the head of Enterprise Risk Management and they are part of the Risk Committee as well.
Last but not the least, the CFO’s need to be patient in the digital transformation journey; about 5 years are needed to achieve a meaningful level of transformation in any organization. It is important to note that cultural shift along with the shift in process and technology typically takes a longer duration. One can accelerate the journey through transparency, communication and continuous mentoring – including reverse mentoring.
CFO's Role as Change Agent and Leader of Continuous Improvement
To position themselves as catalysts for change within their organizations, CFOs must lead by example. Embracing new technologies, such as AI tools, is crucial for optimizing operations and controlling costs effectively. They should actively seek out and stay informed about advancements both locally and globally, fostering a proactive approach to innovation. Networking with peers and participating in knowledge-sharing sessions are essential to staying ahead.
Establishing a culture of continuous improvement requires the CFO to lead promising initiatives and promote best practices regularly. By championing this mindset, CFOs can instill a commitment to ongoing enhancement across the organization. Looking ahead, the CFO role is evolving beyond traditional boundaries, encompassing responsibilities of a Chief Strategy Officer, Chief IT Officer, and Chief Transformation Officer. It is definitely an expanded role which I’m sure that the CFO can become ready to cross roads with..
About the Author
Sambasivan G, CFO at Tata Play Ltd, brings over 35 years of experience in Finance and General Management to his role. He specializes in leading transformational projects, emphasizing the pivotal role of motivated teams in organizational success. Sambasivan G has witnessed firsthand the evolution of finance functions since the early 1990s. With a steadfast belief in people as the cornerstone of any company, he champions initiatives that harness team potential to drive innovation and operational excellence.
