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Role of Chief Finance Officer in Firm Management

The role of the Chief Finance Officer is evolving. Traditionally focused on accounting and finance tasks, the CFO's role now extends more broadly across the organization. CFOs are exploiting data and creating value as innovators and disruptors. Key skills for CFOs include strategic leadership, organizational transformation, and technology expertise. As automation increases, CFOs must master data and look ahead to prepare finance for the future. To succeed, CFOs should prioritize digital investments, connect initiatives to business goals, and encourage innovation. The future CFO will be a business partner focused on value creation rather than efficiency.

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2K views19 pages

Role of Chief Finance Officer in Firm Management

The role of the Chief Finance Officer is evolving. Traditionally focused on accounting and finance tasks, the CFO's role now extends more broadly across the organization. CFOs are exploiting data and creating value as innovators and disruptors. Key skills for CFOs include strategic leadership, organizational transformation, and technology expertise. As automation increases, CFOs must master data and look ahead to prepare finance for the future. To succeed, CFOs should prioritize digital investments, connect initiatives to business goals, and encourage innovation. The future CFO will be a business partner focused on value creation rather than efficiency.

Uploaded by

Sam
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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ROLE OF CHIEF FINANCE

OFFICER IN FIRM
MANAGEMENT
SAMEER BHUPENDRA MISTRY
HPGD/AP18/3025
EXECUTIVE SUMMARY - FROM
BOTTOM LINE TO FRONT LINE
 In this era of unprecedented disruption, the CFO’s role is
increasingly far-reaching, fast-paced and much broader in
impact across the entire organization.
 CFOs have stepped out from the boundaries of their traditional
role. They are exploiting data and creating value.
 They can now serve as INNOVATOR as well as DISRUPTOR in
their business.
 The CFO’s role is evolving and is being driven by five forces:
UNDERSTANDING THE BASICS
THE ROLE OF THE CFO OF TODAY
AND TOMORROW
KEY SKILLS FOR THE NEW CFO
INTERVIEW & CONVERSATION WITH MR. VIKKI SONI
Head Finance & Accounts at Vastu Housing Finance Corporation Limited.
A CLOSE-UP VIEW OF THE EVOLVED CFO
FINANCE IS REINVENTING ITSELF
LIMITATIONS - CHALLENGES,
GAPS AND OPPORTUNITIES
REQUIRING A NEW ROLE
As CFOs feel the ground moving beneath them, they are grappling with
several common challenges.
Limitation – Challenge 1 - A STRUGGLE TO
AUTOMATE

 Not all CFOs are enacting (or are empowered to enact)


necessary changes. Consider automation.
 Today, only 34 percent of finance tasks are automated.
 Accenture estimates that 60 to 80 percent of backward-looking
accounting activity can be automated.
 But, even by 2021, CFOs anticipate that less than 50 percent of all
finance tasks will be performed by machines.
 CFOs have the added task of making the internal case for automation,
as they worry about employee resistance to working with non-human
colleagues.
Limitation – Challenge 2 -
MASTERING DATA
 One of the biggest challenges is locating the right data.
 CFOs worry that the finance function is reactive or that data and
information-sharing processes are not streamlined.
 Part of the issue stems from concern about information security.
 After all, if you automate an inefficient process you just get bad data
faster.
 Organizations look to combine internal and external, structured and
unstructured data to unlock the most insightful reading of any given
situation.
Limitation – Challenge 3 -
LOOKING AHEAD AND
BRANCHING OUT
 CFOs are accustomed to historical analysis, but looking
backwards is not sufficient for seamlessly bringing value to the
rest of the enterprise.
 Predictive analytics tools allow finance to exploit data and understand
how the business climate will play out across each area.
 Embrace new digital skills that will be critical for succeeding in the years
to come.
 The onus, then, is on CFOs to seize upon their employees’ enthusiasm
with effective upskilling programs.
 In broad terms, CFOs have to think about life after automation.
RECOMMENDATIONS
HOW CFO CAN SEIZE THE MOMENT - ACCELERATE
DIGITAL TRANSFORMATION

 The pace of digital disruption is such that CFOs are looking for
ways to accelerate it. The following recommendations can help:

 Prioritize digital investments.


 Find common ground with other business units on the scope of digitalization
 Connect the investments with returns the business expects to realize.
 Determine value that digital investment in rest of the business can deliver.
 Innovate and scale at speed. Deploy agile methods and outcome-based design principles.
 Build stewardship and governance structures to measure performance and ensure
accountability for outcomes.
 Constantly evaluate digital investments to ensure continued relevance and value.
 Encourage teams to pursue innovation and support them.
 Recognize that success is not linear and that change requires patience.
WHAT MAKES FOR A SUCCESSFUL
MODERN CFO

A Seat at the Table Must


1 Be Earned

Finance Must Be
2 Embedded Throughout
the Company

Automation and
3 Technology are
Critical

4 Focus on Results, Not


Efficiency
DEVELOPING FUTURE FINANCE TALENT -
REQUIRING A DIFFERENT TALENT PROFILE

Value
Expanded Responsibility

Professional Intelligent
Skills Finance

Finance and Business


Accounting Insight
Finance

Transact Use of Digital Technology Analyze


THE FUTURE OF THE CFO: FROM
NUMBER CRUNCHER TO VALUE DRIVER

 NON-FINANCE AREAS ACCOUNT FOR A LARGE SHARE OF CFO’S


RESPONSIBILITIES
 Roles where CFOs spend the most time:
Strategic
Leadership – 46%

Organizational Performance
Transformation – 45% Management – 35%

Capital Allocation Big Data and


– 24% Analytics – 20%

Finance Technology Trends


Capabilities – 18% – 5%

Other – Risk Mgt,


According to EY survey in 2019, Procurement etc –
5%

67% CFOs believe that improving business partnering between Finance and the business is a major priority.
Closing the Gap

 According to McKinsey, CFOs can demonstrate their expanded role in three


main ways:

1. Actively head up transformations –


Not just for Finance function but enterprise-wide transformations, and
communicate their strategic value through activities like high-level goal setting.
2. Lead the charge towards digitization and automation.
3. Develop talent and capabilities across the organization –
For example, CFOs can build capabilities during transformations, teach financial
topics to non-finance leaders, and develop top talent across the organization.
VOICES FROM THE FUTURE
 Accenture’s survey of tomorrow’s CFOs reveal that: Forward-looking
finance leaders are energize by the potential of digital

92% 78%
transformation.

say that if they were CFO, they say the future Finance
would spend a significant function, led by the CFO, will
amount of time champion a new way
on value creation across the of operating across the
wider business ecosystem. business.

77%
believe the finance function
should be proactive and
connected in its operations
66% believe that finance should
empower other functions to
take on all finance activities.
across the wider business
ecosystem.
CONCLUSION

 The CFO is in an elevated position, serving as an INNOVATOR and a


DISRUPTOR who can harness data to unleash new value.
 Never has the CFO been better positioned to be THE CEO’S CHIEF
BUSINESS PARTNER.
 Now is the time for CFOs to WIELD THE POWER OF DIGITAL AND
SECURE THEIR ORGANIZATION’S GROWTH OBJECTIVES.
BIBLIOGRAPHY

 https://www.accenture.com/us-en/insights/consulting/cfo-research-overview
 https://en.wikipedia.org/wiki/Chief_financial_officer
 https://www.investopedia.com/terms/c/cfo.asp
 https://www.investopedia.com/ask/answers/what-does-chief-financial-officer-cfo-do/
 https://www.getsmarter.com/blog/career-advice/become-chief-financial-officer-cfo/
 https://www.cfo.com/
 https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-ins
ights/the-evolution-of-the-cfo
 https://www.toptal.com/finance/interim-cfos/role-of-the-cfo
 https://www2.deloitte.com/us/en/pages/finance/articles/gx-cfo-role-responsibilities-or
ganization-steward-operator-catalyst-strategist.html
 https://www.accenture.com/in-en/service-cfo-enterprise-value
 https://www.gartner.com/en/finance/insights/what-makes-good-cfo
THANK YOU

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