The new normal.
We’ve probably all said that phrase a lot over the past year-plus. Like, A LOT, a lot. In business, and in life, in general.
The ratcheted-up business challenges brought on by the COVID-19 pandemic layered on top of ongoing machinations of digital transformation pack a potent one-two punch. This has created an environment that is anything but ‘business as usual’. Changes in response abound, and one of the most conspicuous has continued to be the evolution of the Chief Financial Officer (CFO) role.
Traditionally, the CFO has two main duties:
- Serve as custodian of the company’s budget
- Serve as protector of the company’s critical assets
These days, in addition to those foundational assignments, a CFO is also expected to lead the charge in an organization’s future decision-making and path to success. That added assignment is based on the insight and foresight from key performance indicators (KPI) he or she has been tapped to capture.
The Deloitte “CFO Signals” survey of North American CFOs, based on Q1 2021 findings, indicated more than half (54%) of the respondents “having higher demands from their executive/leadership teams since the beginning of the pandemic.” The same survey also found more than a quarter of the responding CFOs to have broader functional responsibilities than prior to the pandemic, with data analytics, forecasting and a strategic mindset among the key skillsets being sought by finance team members these days.
How best should the CFO, and the team he or she leads, put to use those skillsets to be successful today, and how can this executive ensure the right KPIs are being captured?
Those two questions, and more, are addressed in the Forbes article, “The New Essential CFO Skillset,” from this past summer.
By way of referencing a couple of the modern chapeaus worn by CFOs today, the Forbes piece makes a couple of helpful observations:
- Tech Champion: As the designated stewards of new technology and process adoption, CFOs are more likely to expand their firm’s automation journey to include the financial close process so F&A teams can redirect time and effort toward business growth activities.
- Strategic Collaborator: The pandemic has highlighted the duty of the CFO to define the health of an organization and, if ‘under the weather,’ the need to get things shipshape again. These financial leaders are tasked with soliciting insight from stakeholders at all levels of a company and establish a transparent and open information sharing expectation company-wide.
Recommendations on how to capture the right KPIs for a prosperous business future, per Forbes, include:
- Cross C-Level collaboration, which we most certainly agree on and co-sign.
- Standardized, automated and accessible (read: real-time) financial and operational systems established in sync across the business
- Provision of summary metrics with business narratives which help layout not just the KPIs, but the steps needed to improve, if necessary.
Today’s functional duties for the CFO are at the heart of our data revolution, brought about by better technology tools, more accessible insights and efficient automation engines. It’s why we’ve given this evolved role the more real world moniker of CFRO (Chief Financial Revolution Officer). It has a nice ring to it.
Need more proof this is how things have evolved for this role?
Consider the five ways highlighted in the EY article from earlier this year, titled, well, “Five Ways the Role of the CFO has Evolved in Five Years.”
- CFOs lead a broader, more diverse team
- Softer skills have become more important
- Shift from short-term performance to long term value
- Technological advancement
- Learning, learning, learning
Nope, the days of the CFO designated with simply managing a company’s bottom line or clearly over. Rising technology along with recent world events have ensured that. It’s unlikely to ever go back.
Did you know RecVue offers a guide tailored to help you better manage your order-to-cash process and simplify modern billing challenges?