Trends in Finance for 2019, Part 1: The Role of CFO is Changing
There has been a significant shift in business from 2008 when the recession hit. We’re dealing with a new generation of workers, innovation is the norm rather than the exception, and every business, regardless of industry, must be a “technology” business to thrive.
The role of finance has changed as well. They’re no longer isolated from the rest of the organization, staring at budget spreadsheets and generating reports. Finance leaders are the connectors of the organization, using technology along with data to help guide strategy while ensuring stability and protecting it from risk.
This is the first in a series of blogs on how finance is changing in 2019, from an evolving workforce to battling new risks.
Part 1: The changing role of today’s CFO
Two basic truths govern the role of today’s CFO:
- The CFO is responsible for anything that impacts the bottom line
- Everything impacts the bottom line
The traditional role of the CFO has been changing. They are no longer simply managing the organization’s finances but are now involved in everything from staffing to IT and product development. In fact, as technology becomes a large part of every department in a business, CFOs are becoming more involved in the understanding and managing the role technology plays – both in getting the work done as well as the financial impacts of that technology on the business.
Finding the balance between new technologies and risk
As technology finds its way into areas as diverse as manufacturing, warehouse management, human resources, sales and marketing, and field operations, the budgets for these expenditures must be reviewed and approved. And the CFO is ultimately responsible for how this money is allocated and spent, including the responsibility for justifying how these expenditures will help the company’s profitability. This requires that CFOs balance the benefits the new technologies bring to the business against the potential exposure risk presented by each technology. For example:
- The Internet of Things (IoT) allows field service personnel to monitor installed products remotely and proactively generate a service order before the unit fails. But can that unit be hacked? Can the hacker gain access to company data?
- eCommerce offers many companies access to global markets via the internet. But does this expose the company to data breaches of customer information, including credit card fraud and identity theft?
- As more departments adopt automated systems, productivity increases. But what are the consequences of a system failure? What about data backups? Malicious viruses? Data center security? Hacking into employee records? The list goes on.
Today the CFO is not only responsible for approving the budget for new technology investments, he or she is also responsible for how that technology is used and the risks that technology brings to the company—and the company’s investors. In 2016 Ernst and Young stated that 64% of CFOs reported being asked to take on broader operational leadership roles beyond finance. And in 2018, IDG Communications reported that only 54% of technology investments are actually controlled by IT departments.
Today, CFOs are expected to be more than number crunchers reporting quarterly returns. They are also taking on roles previously reserved for IT managers, COOs, and product development, being responsible for audits, regulatory compliance, and data security.
But they still need to be able to crunch the numbers and report on quarterly returns.
How AKA can help today’s CFO with new roles and responsibilities
So how can we help? As discussed, technology is playing a much bigger role in finance, so you need a partner who understands how to leverage technology to help CFOs and their finance teams meet the new challenges they face. With Microsoft Dynamics 365 as well as the entire Microsoft Platform—including Power BI and PowerApps—we can help with everything from automating processes to streamlining operations to getting you greater visibility into all facets of the organization, enabling you and your leadership team to make more informed decisions. Ultimately, the right technology will help you keep your bottom line in check while empowering you to be more strategic and forward thinking. Talk to us about how we can help.
Stay tuned for more blogs in this series. Part 2 will discuss changing customer demands and how the finance team can adapt and help the organization leverage new opportunities while keeping customers loyal. To read more about finance trends, download this Microsoft whitepaper, 2019 Finance Trends Report.