The CFO’s role has been evolving for years, becoming more and more central to the strategic direction of the enterprise.
According to new research, this transformation is being accelerated by the global pandemic. CFOs have increasingly moved beyond their traditional role as economic guardians of the enterprise to become architects of business value and catalysts of digital strategies. Nearly three-quarters (72%) of the CFOs surveyed said they had the final say on the enterprise’s appropriate technology direction.
And it’s not only the pandemic that’s altering the role and responsibilities of CFOs. External change is accelerating in numerous ways: consumer expectations, industry disintermediation, data explosion, and the general pace of business, to name just a few.
These trends outpace the traditional budgetary cycle and demand that CFOs act equally fast to protect the business and create breakout value and success that can be realized across the enterprise. The task may sound difficult, but a small group of elite CFOs is blazing a trail for others to follow.
The research found that enterprises helmed by an elite CFO — defined as a leader that embodies the new strategic responsibilities of the role and can generate value at breakthrough speed — have far exceeded revenue growth expectations. Our statistical modeling indicates that if other CFOs emulate leaders’ behaviors, their companies could as much as double EBITDA over three years.
The overarching differentiator for this group of elite CFOs is the advantage they hold over their peers when using technology and data to meet the role’s evolving requirements. Here’s how.
Elite CFOs are using digital transformation, the cloud, and predictive analytics to execute their traditional role as economic guardians of the enterprise. We discovered that:
This small group of CFOs has become “sensors at the edge” of the enterprise, gathering data through business-unit level financial planning and analysis (FP&A) sources to unify diverse data streams in the cloud and run artificial intelligence-based models in real-time to make sense of what they collect.
As CFOs become the second-in-command on strategic issues, they must deepen their collaborative relationships across the C-suite. We found that:
That’s excellent news, but once again, we see elite CFOs go even further. This group combines cloud-based process-mining solutions, enterprise resource planning, and other source systems with AI-based models to visualize end-to-end value chains and business processes. This allows them to uncover friction that can result in errors, deviations, and value leakage.
To drive breakthrough speed, CFOs need to champion digital transformation across the enterprise. Our research identified three main areas of focus for leaders:
Across all of these areas cloud adoption is key — whether that’s for advanced analytics for strategy insights, tools to enhance security, or to lower the carbon footprint of the stack (cloud migrations can reduce CO2 emissions by nearly 60 million tons a year).
CFOs need to move fast. They need to break down data silos once and for all, unlock predictive forecasting, collaborate purposefully across the C-suite, and take responsibility for digital strategy. Do these things and you will be able to reach top speed and, as a result, unlock breakthrough performance for the business.
Aneel Delawalla and Annie Peabody are Accenture Strategy managing directors in the CFO & Enterprise Value practice.