Nearly eight in 10 CFOs say that organizational disruptions from the pandemic accelerated a transformation of their roles
As the pandemic continues to challenge organizations worldwide, the role of chief financial officers (CFOs) has moved further beyond “economic guardians” of the enterprise to “architects of business value” and “catalysts of digital strategies,” with nearly three-quarters (72%) of CFOs reporting that they have the final say on the appropriate technology direction of the enterprise, according to a new research from Accenture.
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NEWS: Today’s CFOs are evolving beyond serving as the finance lead to becoming a digital steward of their organization.
The report, “CFO Now: Breakthrough Speed for Breakout Value,” finds that in addition to the pandemic, other external challenges including digitalization, market dynamics and fast-evolving consumer expectations have forced CFOs to broaden and transform their roles. CFOs are also being asked to ensure that their company appropriately mitigates risk by addressing environmental, social and governance (ESG) performance, as well as security challenges faced by their organization.
“The role of the CFO has further evolved beyond serving as the finance lead to becoming a ‘digital steward’ of their organization. Increasingly, CFOs are focused on collecting and interpreting data for key business decisions and enabling strategy beyond the borders of the finance function,” said Christian Campagna, Ph.D., senior managing director and global lead of the CFO & Enterprise Value practice at Accenture. “Faced with new challenges spurred by the pandemic, today’s CFOs must execute their organizations’ strategies at breakthrough speeds to create breakout value and success that can be realized across the enterprise.”
The report identifies an elite group (17%) of CFOs who have transformed their roles effectively, resulting in positive changes to their organizations’ top-line growth and bottom-line profitability. CFOs who fully exemplify their new roles and operate effectively at breakthrough speeds could almost double their EBITDA CAGR from 3.8% to 6.9% over the next three years and increase their revenue CAGR from 2.7% to 3.0%.
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These elite CFOs have pushed the boundaries of their remit and made a durable difference across three roles:
“Economic guardians” − by collaborating across the C-suite to provide new depths of predictive insights and identify new sources of value across customers, channels and products, CFOs can unlock the full benefits of digital transformation.
- More than half (60%) of traditional finance tasks are currently automated. This exceeds what CFOs predicted in 2018 when they said 45% of traditional finance tasks would be automated by 2021.
- Yet, despite this progress in digital transformation, less than half (43%) of CFOs surveyed have used advanced financial modeling in the past two years to identify future risks and opportunities; only 23% are using the cloud to provide new insights; and only 16% are using the cloud to identify new value sources.
“Architects of business value” − by driving end-to-end insights through real-time data and models, successful CFOs are using technology and data to synchronize information across the C-suite.
- Nearly 9 in 10 (86%) CFOs have increased the frequency and scope of collaboration with C-suite partners leveraging their visibility, analytics and access to data and insights to enterprise risk.
- Eighty-eight percent of CFOs have introduced new metrics to better leverage finance’s collaboration with and influence on the enterprise.
“Catalysts of digital strategy” − increasingly, companies are looking to CFOs to spearhead thinking around future operating models and drive the technology agenda forward with a focus on security and ESG.
- In fact, 68% of surveyed CFOs say that finance takes ultimate responsibility for ESG performance within their enterprise.
- However, 34% specifically cited concern about data and privacy breaches as a barrier preventing them from realizing their full potential as a driver of strategic change.
“Leading the enterprise in the face of disruption means that CFOs must expand their technology responsibilities and digital skills if they are to be truly responsive to the needs of their entire organization,” said Aneel Delawalla, managing director and Enterprise Value Targeting lead in Accenture Strategy. “The CFOs that embrace these new roles and capabilities will drive greater value at even greater speeds than their peers.”
