Data is the most valuable asset a business has. Success, stagnation or failure depends on how well businesses can leverage their data to make smart decisions, plan for the future, and pivot quickly when plans change.
The Finance function has the data on hand and the analytical expertise to help guide the business. CFOs should be leading the way towards a more advisory, forward-looking Finance department.
With the time saved by eliminating manual tasks through automation and machine learning, CFOs can dedicate time and resources to transforming their Finance departments.
Here are three crucial leadership roles for a truly transformative CFO.
1. The Advisor
A transformative CFO uses data to help guide business decisions. This is the most prominent new opportunity for the Finance function, elevating their role beyond reporting or scorekeeping and into strategic planning.
In order to become an advisor, a CFO needs an agile team that can execute scenario planning and forecasting quickly and accurately. In a recent survey of 500 Finance leaders, we found that only 4% of organizations make time for scenario planning. However, those that do make the time were found to be more agile and quicker to adapt to new situations.
Jack McCullough, Founder & President of the CFO Leadership Council, sees the advisory role as potentially challenging for CFOs. “It’s very difficult for most Finance chiefs to dispense advice, then sit back in an observational role. Most of them will want to roll up the sleeves and jump into the battle, with apologies for mixing my metaphors,” McCullough says. “CFOs have to remember their greatest contribution is their vision, their strategic acumen, their communication and leadership. Hire a great team and empower them to get it done.”
The advisory role comes into play during the budgeting process as well. Our research found that the most successful Finance teams adopted continuous budgeting, collaborating with stakeholders across the organization and embracing automation to expedite the process.
2. The Facilitator & Collaborator
In a data-driven, digitally transformed business, the Finance function no longer operates in a silo. Communication and collaboration between departments is essential to maintaining the agility and flexibility that modern businesses require.
A transformative CFO helps other teams communicate with each other and with the Finance department, making sure each team has the data they need to work more effectively.
The ability to communicate and coordinate is an essential and undervalued skill, says McCullough. “While most CFOs are loath to think of themselves as political in nature, the fact is that the ability to inspire confidence in the team (not just in finance, but across the entire enterprise) is a critical skill in a successful transformation,” he says. “And, even if it is a Finance transformation, it affects the entire organization. You have many stakeholders involved, with conflicting agendas. The ability to lead the people is more important than the ability to lead the process for a CFO.”
The CFO can also take charge of creating a source of data truth that can be available across the organization. An integrated budgeting platform can make it easier to work with other departments on the budget, including the ability to make notes, track changes and involve multiple decision makers, all without sacrificing speed or accuracy.
This aspect of the new CFO role helps increase the visibility of the Finance department, as well as establish its credibility and authority. Ultimately, the goal is for the CFO to have an equal seat at the table in executive discussions, even those not directly involving Finance.
3. The Prognosticator
The past few years have seen a barrage of overlapping crises and disruptions. It’s clear that uncertainty is the new normal, and businesses need to be prepared for whatever happens next.
CFOs have the potential to help the business be more proactive than reactive, anticipating trends in time to avoid risk and create opportunity. Robust scenario planning, more accurate forecasting, and continuous budgeting can all contribute to the prognosticator role.
Most importantly, CFOs need the freedom to spend time analyzing and presenting reports, which means spending less time collating data and creating the reports themselves. Automating these reporting tasks can free up time for analysis and insight, and intelligent reporting can help surface insights that CFOs can convey to the rest of the executive suite.
Begin Your Transformation
Prophix is dedicated to helping Finance teams transform the way they work. Our platform makes it easier for CFOs to advise, facilitate and predict the future, providing more value to the business and elevating their role.
Ready to transform your Finance function? Watch our demo to see how Prophix can help.