The rapid onset of the digital economy has dramatically changed the traditional role of the finance function, and by proxy, the roles and responsibilities of the CFO. Gone are the days of living and dying by the spreadsheet, and waiting for monthly or even yearly figures to make financial projections. CFOs today are taking on more than ever before. A recent survey found that a majority of finance professionals believe they will be taking on more responsibility in the coming years, with IT being one of the top areas that CFOs are increasingly seeing their role expand to cover.
In my past life as CFO of SAP Latin America, I saw the impact advances in technology were starting to have on the finance function, and continue to witness this evolution as I work closely with finance executives at customers around the globe today. As the role of the CFO continues to be influenced by technology, I sat down with SAP's CIO Americas, Michael Golz, to get an IT perspective on the evolving role of the CFO, and how the CFO and CIO are increasingly working together to develop business strategy and propel their companies forward.
From your perspective, how has the digital economy influenced the evolving role of the CFO?
CFOs today are tech-savvy and engaged with how IT can power business decisions. Truly successful CFOs aren't just running cost comparison and reporting the figures, they embrace their role as a respected voice when it comes to business strategy and company direction, driving the value of company investments. The types of insights needed for making this type of high-level decision making cannot be realized without technology, it requires integrated, real-time business processes in finance and the overall enterprise.
Gone are the days of pouring over spreadsheets. CFOs are turning to technology solutions that can help them expedite and dive deeper into forecasting and reporting. Expectations from peers and key stakeholders are driving this transition. The demand for real-time insights for board meetings or executive sessions is key to success for enterprises today. CFOs are expected to not only bring those insights to the table, but offer analysis that can help guide business strategy, facilitate informed financial decisions and ultimately drive action in the business.
With so much crossover, how do the IT function and finance function work together? How has the interaction between the CFO and CIO role changed?
The CFO and CIO are more linked now than ever before. The finance-IT relationship used to be 'order-taker,' where IT would receive requirements from finance, and reciprocate tools and insights that they can pass along for informed business decisions. Now, IT is enabling the digitalization of the finance function so that CFOs and their teams can be much more self-sufficient. Finance and IT need to work together to remove latency from disconnected process steps and complex reporting, moving towards real-time insights and simplified processes.
As I mentioned before, finance is more tech-savvy, and technology solutions are becoming increasingly accessible to the every day business user. With this, we are putting data insights back where it truly belongs - in the hands of business decision makers. Additionally, by breaking up the old school process, there is more room for overlap and teamwork when it comes to shaping overall strategy for both finance and IT.
Outside of the influence of technology, what other factors are shaping the CFO's role today?
We are living in an unprecedented era of economic and regulatory volatility. Whether managing the impact of Brexit on the global market, navigating the M&A landscape or even responding to the outcome of the U.S. presidential election this fall, the world we live in today is rapidly changing, and any one of these factors can have a huge impact on a company's business results.
CFOs need to be agile in today's global market. Real-time insights can help CFOs provide ad-hoc recommendations on business direction that can be critical as companies look to effectively steer through global uncertainty.
As advanced technology and data analytics continue to play an increased role in the enterprise, what changes do you expect we will see in the C-suite more broadly? How will the CFO fit in?
The digital era is expanding the role of every C-suite member, and enabling a much more collaborative and strategic atmosphere in the boardroom. Data analytics is not solely the domain of IT anymore, but rather penetrates every aspect of the business.
The CFO is leading the charge in this regard - truly transitioning to become a strategic visionary, and a wingman to the CEO. Armed with previously untapped insights, the CFO can provide unmatched strategy and insight for informed business decisions, and ultimately help sustain and grow the company.