Today’s CFO: Less Bean Counter, More Strategic Advisor

The role of the CFO has undergone significant transformation in recent years, allowing companies of all sizes to be more strategic about operations and growth.

No longer cloistered number crunchers, today’s Chief Financial Officers (CFOs) are assuming a more significant role in shaping the strategy, vision and even communication of their organizations.

Thanks to recent advances, such as continuous accounting, predictive analytics, and the increased complexity of today's businesses, there’s a greater need for guidance from CFOs about what companies should prioritize from a strategic standpoint.

In a 2015 KPMG survey of CEOs, 63% said that the CFO’s role would become increasingly important to them over the next three years. By 2017, that same survey reported that 34% of CEOs view CFOs as potential successors.

Here's a look at what has changed, and how CFOs can leverage their knowledge to positively impact the business.

Increased Strategic Input

CFOs and their finance departments traditionally spend a considerable amount of their time collecting, sorting, and distilling data for management.

Today, sophisticated software does much of that work automatically, offering companies more accurate and timely indicators of how the business is performing relative to previous periods and targets.

The upshot?

Because these insights depend on data, CFOs are more frequently called on to interpret trends, introduce and implement technology, and accurately communicate options to other decision makers and stakeholders. Accounting functions as a whole now largely focus on employing data about the company, its customers, and the broader industry to more effectively pursue opportunities and sidestep potential risks.

CFOs increasingly spearhead these efforts since they have a line of sight into all aspects of the business, becoming significant contributors to company strategy—as opposed to simply reporting the current state.

The challenge for many CFOs, however, is that while there are many options for modernization, most companies are still dealing with legacy systems that make it difficult for them to take full advantage of the technologies available. CFOs have to be able to work with Chief Information Officers (CIOs) to inform the business on which technological investments make sense strategically and the financial impact of implementation.

A More Integrated Function

For many of today’s companies, sustainable growth is not simply centered around major product breakthroughs or large-scale operational changes. For an organization to truly thrive, silos have to be broken down—product development, finance, marketing, human resources, operations, and other functions all need to be on the same page.

Indeed, without a cross-functional view it can be difficult to optimize and move forward.

CFOs are now bridging the gap by turning data-driven insights into more complete narratives—framing not only what’s happening now, but a leading the vision of what needs to happen in the future to remain competitive.

Regulatory developments have also made integration essential. The advent of new measures for the Financial Accounting Standards Board (FASB) and International Financial Reporting Standards (IFRS) involve significant documentation and the transfer of information across multiple departments. Today’s compliance measures necessitate integrated reporting with a traceable path across multiple departments.

Challenging Goliath With Part-Time CFOs

In an age of financial technology, smaller companies are able to punch far above their weight when it comes to measuring key performance indicators, generating reports, and forecasting with more precision.

This shift in the landscape has ratcheted up demand for outsourced CFO services among modestly sized enterprises. Why? It’s simple: outsourced services give companies access to the expertise of seasoned financed professionals—as well as advanced finance and data analysis tools—without the typically significant expense of employing a CFO full time. Moreover, outside CFOs can often bring an unbiased perspective to the strategic table.

It’s a new era in finance departments, and the changing CFO role is a sign of the times. The focus on innovation over obsolescence, embracing technology, and seeking new avenues to create value has the potential to generate more opportunity for businesses as a whole.

If you haven't already, it's time to rethink how the CFO—and your whole C-suite, for that matter—can integrate to keep your company moving in the right direction and help chart new channels for growth.

The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank, National Association or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever. Deposit and credit products provided by Fifth Third Bank.