The modern business environment characterized by rapid changes and innovations in the use of technologies has significantly changed the position of the CFO. What used to be considered the role of a finance shield for a company, today’s CFO is a game-maker directing organizations through the landscape of digital change and financial creativity. To companies aspiring to keep themselves relevant in the global economy, the influence of a CFO is not limited to financial, but they are innovators, strategists, and visionaries of the highest level.
The CFO as a Strategic Leader
Conventional duties of the CFO were primarily responsibilities associated with finance reporting, containing expenses, and maintaining compliance with the legal requirements. Although these responsibilities have not reduced in importance, the role of the CFO has broadened hugely. Modern CFO is the strategist who has to partner with the CEO and other members of the executive management team and help develop the corporate strategy. This shift is a sign of growth and is due to the fact that there is hardly any business decision that is not made with the help of financial data and analytics.
As data is referred to as the new oil, CFOs use advanced analytics to interpret the changing market trends, customer buying habits, and organizational performance. CFOs decipher difficult financial information hence giving valuable information such as where to find new revenue sources, how to manage resources better and where they are susceptible to risks. This strategic foresight is important given that striving for agility and adaptability is a key to survival for many established businesses.
Furthermore, there has been an increase in the involvement of the CFO in the mergers and acquisition (M&A) decisions. As the globalization of markets progresses, CFOs are playing the central role in assessing prospective deals, and determining if such investments are accretive to the company’s strategic vision and financial status. They are invaluable in managing M&A deals due to understanding of sophisticated financial structures and valuation of digital assets.
Embracing Financial Innovation
CFOs are also key drivers of change as the market goes through a digital transformation process. The use of financial technology (fintech), has transformed how organizations carry out their operations through introducing improved devices and systems to use in the field of finance. From blockchain technology and cryptocurrency to automated accounting systems and solutions based on artificial intelligence, CFOs are actively using the trusty tools to enhance their workflow and company performance.
For instance, the futuristic CFOs are considering applying the blockchain concept that can make the financial relations more transparent and secure. Blockchain technology can serve as a valuable asset for global finance since it can decrease the number of fraudulent cases, and minimize the expenses of transactions while also making the overall process faster. CFOs who deploy such innovations place their firms strategically as the front runners in adoption of technology thus placing the firm in a strategic place in the market.
In the same way that business intelligence and analytics have changed the role of the CFO in preparing and analyzing the financial statements, so too have other advanced technologies such as artificial intelligence (AI) and machine learning. It is possible to perform an efficient and quick evaluation of large sums of financial information using artificial intelligence and deep learning techniques; this allows CFOs to receive prompt suggestions on the probable changes in the market to be ready for them in advance. Such a level of accuracy and fast pace makes it extremely beneficial in today’s business environment where most decisions are time-sensitive and final.
Furthermore, in the field of fintech, new ideas are helping the CFOs to manage the cash flows and working capital efficiently. New digital solutions such as automated treasury management systems give CFOs real-time insights into cash balances to facilitate accurate investment decision, borrowing, and cash planning. Thus, the implementation of these technologies helps CFOs to increase the efficiency of financial performance, minimize costs, and redirect resources to value-creation activities.
The role of the CFO remains critical for coping with the dynamics of the contemporary business landscape. Today, CFOs are not just financial managers, but rather visionaries who lead change, create value, and guide organizations towards a new, digital future. Expertise in core financial management coupled with vision in things like new technologies and strategies make them valuable investments for today’s companies.
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