CFOs are collaborating with other functional areas in their companies as their role expands enterprise-wide. Increasingly, senior executives within the finance function are contributing data, analysis, strategy, and insights that improve efficiency, effectiveness, and company performance.

A recent survey of 157 senior finance executives conducted by CFO Research, in collaboration with FTI Consulting, looked at how they are doing this in three key areas: performance management, technology strategy, and talent development.

Nearly 90% of those surveyed said their firm’s finance chief played key roles in supporting these three areas. Most CFOs should welcome the shift: they are not constrained anymore to just reporting on performance; they can now positively influence it.

Analyzing Operations

Increasingly, the CFO and the finance function have the data, analytical expertise, and stature within the organization to support operations performance management effectively. Of the finance executives surveyed, 88% agreed that the CFO has a substantial role in supporting operations performance across the enterprise. And 91% of those surveyed said their CFOs either currently identified key areas of operational risk or planned to begin doing so within two years.

Finance leaders cited two ways that they support enterprise operations: through traditional finance processes and through insights enabled by advanced analytics. Traditional processes include providing timely cost analysis to business leaders, identifying key areas of operational risk, flagging variances from plan, and providing recommendations for improvement where appropriate. Several routine tasks, like cost and variance analysis, were still not conducted by many firms.

When it came to supporting operations performance management with more advanced analytics and external data, the survey found that a majority of CFOs were providing customer and market analytics, as well as delivering real-time financials. Nearly half of respondents were providing competitive market analysis. (See Figure 1.)

Many finance professionals recognized the importance of communication and integration between finance and operations; however, less than two-thirds of those surveyed have been able to achieve true integration. Only 63% of those surveyed said their CFOs were partnering with the chief operating officer, or equivalent, and creating a personal relationship with all business leaders. The same percentage was actively connecting finance team leaders with their operations equivalents.

Finding and Keeping

Another way CFOs can add value beyond their traditional responsibilities is to be more involved in key aspects of corporate talent. While the talent strategy function is the clear domain of the chief human resources officer (CHRO), CFOs are playing a part in improving their companies’ ability to attract and retain talent and understanding its impact on corporate performance.

Increasingly, the processes of identifying and retaining talent are becoming an inescapable part of the CFO’s job. While 71% of those surveyed confirmed that their CFOs played a key role in talent support across the enterprise, more than a quarter indicated that they did not. More than 6 in 10 (65%) expected their organizations’ CFOs would have a substantially larger role supporting the development of an enterprise-wide talent strategy in the next two years.

As to exactly how the CFO should engage with the talent function, a respondent argued that, to facilitate productive interactions between finance and HR, the CFO should “build the relationship with the CHRO, determine what KPIs the talent function wants to understand, and then align the finance team behind those needs to deliver regular reporting and support.”

The importance of talent management to ensure accurate budgeting and forecasting cannot be overstated. The CFO must remain vigilant to avoid a talent-related performance shortfall. Only half of the senior finance executives surveyed said that their organizations’ CFOs identified key areas of talent risk, and 49% supported efforts to improve bench strength of key corporate functions, including finance.

Many organizations believed there was a disconnect between the CFO and the CHRO, and only 39% of those surveyed believed that in their organization the two had an effective partnership. The individuals within an organization tend to shape the value of their functions, which translates into the quality of cross-functional collaboration.

Tech Collaborator

With technology strategy deeply embedded in corporate strategy, the stakes are high when defining the role of technology in the enterprise. Historically, CFOs have played an integral role in corporate technology strategy, and 81% of those surveyed confirmed that their organizations’ CFOs had a key role supporting technology strategy development.

The line where finance ends and IT begins is increasingly blurred, and many senior managers are developing a more sophisticated technology knowledge base. Nearly three-quarters of those surveyed believed their organization’s CFO would have a substantially larger role supporting the development of technology strategy in the next two years.

Investing in technology is becoming a focus for CFOs because of the changing value and perception of advanced analytics. Specifically, 89% of those surveyed either had or were developing a strong analytics team within the finance function. In addition, 48% of those surveyed were currently collaborating with IT to leverage cloud platforms, advanced analytics, and automation to increase performance of the finance and accounting organization and reduce the cost of delivery.

But in many related areas, CFOs have work ahead. Surprisingly, only 56% of those surveyed said that finance was currently identifying key areas of technology risk. Forty-three percent said that their organizations invested in IT spend transparency and measured the return on investment of technology projects. About half (49%) believed there was an effective partnership between finance and their chief information or chief technology officer. And only half or fewer than half of those surveyed said their finance leadership was involved in key areas of technology management. (See Figure 2.)

CFOs have the opportunity to impact all areas of the business. Nearly three-quarters of those surveyed expected their CFOs would play an even larger role in all three key areas — operations, talent, and technology — over the next two years. In fact, most also expected this kind of enhanced engagement across the enterprise would become standard practice and a fundamental component of the evolving CFO job description.

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