New survey reveals how the finance function impacts operations, technology, and talent
With the help of significant investments in technology, CFOs have been able to expand their focus from traditional concerns — primarily financial integrity of the business and risk management — to areas impacting enterprise performance.
The majority of CFOs are well positioned to take a broader role in managing enterprise performance. In a recent survey conducted by CFO Research, in collaboration with FTI Consulting’s Office of the CFO Solutions practice, nearly 90% of those surveyed (including CFOs themselves) say their firm’s CFO currently plays key roles in supporting operations performance management, technology strategy and talent development.
But finance professionals can’t simply be content with reporting on performance. The goal is to influence business outcomes. One survey respondent wrote: “CFOs need a bigger role in business transformations; they need to be seen as a catalyst for change.”
Finance leaders are playing a much bigger role in shaping corporate strategy, implementing key initiatives, and providing data, guidance and insight. This input ensures success across operations, talent and technology. Success requires a close working relationships between finance leaders and CFOs, as well as COOs, CHROs, CPOs and CIOs. “We just need to be more collaborative and transparent with each other to grow the company,” noted one finance leader.
CFOs Have Biggest Impact on Operations
Based upon survey results, operations was the area where CFOs had the most ability to impact the future performance of an organization. An overwhelming majority (88%) of those surveyed agree that the CFO has a substantial role in supporting operations performance across the enterprise. An even greater portion (91%) of those surveyed say their CFOs either currently identify key areas of operational risk or plan to begin doing so within two years.
CFO Support with Traditional Finance Processes
Most finance leaders are already focused on operational risk, cost analysis and presenting data in relevant formats, and more expect to follow within two years.
Balancing Talent and Risk
Helping with talent recruiting and retention is another way CFOs can add value to their organizations beyond their traditional roles/responsibilities. “Talent is what drives an organization’s effectiveness; therefore, it’s imperative for the CFO to be involved,” one respondent wrote.
While the talent strategy function is the clear domain of the CHRO, CFOs are getting involved in improving their companies’ ability to attract and retain talent and understanding the direct impact it has on corporate performance. “HR and finance both have an active role in attracting and retaining talent, so there is a lot of room for teaming between the CHRO and CFO,” said Holly Paul, CHRO, FTI Consulting.
While 71% of those surveyed confirm that their CFOs play a key role of talent support across the enterprise, 65% expect their organizations’ CFOs will have a substantially larger role supporting the development of talent strategy across the enterprise in the next two years.
The importance of talent management to ensure accurate firm budgeting and forecasting cannot be overstated, especially in organizations where a talent-related performance shortfall would be disastrous. Only half of the senior finance executives surveyed say that their organizations’ CFOs currently identify key areas of talent risk, and 49% support efforts to improve bench strength of key corporate functions, including finance.
Blurring the Lines Between Finance and Technology
The CFO’s role in corporate technology strategy continues to grow, and 81% of those surveyed confirm that their organizations’ CFOs currently have a key role supporting technology strategy development across the enterprise.
“Technology has such an important role and ability to take a company to the next level, and the CFO should be a key stakeholder in the decisions made,” one respondent wrote. “Measuring ROI, especially how it relates to digital/cloud operations, is going to become increasingly important as companies realize the value of their tech investments.”
The line where finance ends and IT begins is increasingly blurred, and many senior finance managers are developing a more sophisticated technology knowledge base. Nearly three-quarters of those surveyed believe their organization’s CFO will have a substantially larger role supporting the development of technology strategy across the enterprise in the next two years.
CFO Engagement in Key Areas of Technology Management
Only about half of finance teams are engaging with their IT counterparts, aligning with stakeholders on technology decisions and working to increase adoption of new technologies, providing opportunities to improve.
CFOs have the opportunity to impact all areas of the business as they continue to evolve from stewards of the financial and accounting processes to strategic business partners. Nearly three-quarters of those surveyed expect their CFOs will play an even larger role in all three key areas in their companies — operations, talent and technology — over the next two years.