Today’s chief financial officer is a far cry from the CFO of a decade ago. Traditionally, CFOs were primarily responsible for making sure that an organization’s finances were in order. They minimized risks, analyzed expenses, tracked regulatory trends and managed investments effectively and efficiently. In short, they focused on maintaining the organization’s financial health.
Today, however, the CFO’s role has shifted from one of upkeep to strategy. While the CFO is still responsible for an organization’s financial health, he or she now also focuses on an organization’s overall financial direction. As such, today’s CFO works throughout the business to plan and instill a healthy financial approach, thus helping the organization perform better overall.
Since the CFO’s objectives have changed, the responsibilities of the role have evolved as well. Here are four key new roles for the modern CFO:
In the last decade, the CFO has taken on the management of an organization’s technology. This role is a natural outgrowth of the fact that CFOs have become heavily involved in organizations’ operational units. With that understanding, they are well-suited to oversee the technology that is implemented in these units.
In addition, because technology has become so ubiquitous in the workplace, it has also become a major expense for businesses. Therefore, CFOs must have a deep understanding of how this technology is used, its possible benefits and risks and whether the cost is worthwhile.
Gone are the days when CFOs spent most of their working hours in their offices, buried in numbers and ledgers. Today’s CFO must be a highly proactive member of the senior management, and as such, he or she must know how to communicate well with board members, employees, banks, regulators, investors and others. Because the CFO has a deep understanding of an organization’s direction, he or she must also work closely with the human resources department to ensure that people with the right qualifications are recruited.
Data has grown dramatically in the past decade; therefore, so has the need for rapidly interpreting and understanding that data. A CFO must know how to look beyond the numbers of an organization and swiftly recognize and identify information and trends that can help shape a company’s direction. Automation is key to achieving these important goals. Using a solution like DataRails, CFOs can accurately and quickly obtain these important insights without having to introduce new technology and retraining to the current team.
Ultimately, this is the major new role for today’s chief financial officer. The CFO must be able to see the entire picture—not just the state of a company at the present, but where it should be going in the future. An effective CFO will understand the steps that must be taken to achieve this objective and lead an organization into a promising future.
Read more about the challenges CFOs face in the white paper “Single Version of Truth.”