How Digital Transformation Is Evolving the Role of the CFO
A chief financial officer’s success can no longer be supported by controllership and risk management or performance and budget. According to a recent Aspen Institute white paper, general management and strategy are the two most critical skills needed in the modern CFO. This means finance leaders must go beyond the lonely departmental silo and become a collaborative and innovative player across all areas of the business. And because our digital world comes with a higher demand for superior customer experiences, CFOs have added more hats to their business attire than ever before. It is crucial for companies to seek out a CFO that can carry the weight of the numbers and manage any necessary “wardrobe” changes.
To keep up with customer demands and the evolving roles in the c-suite, here are three must-have characteristics in your CFO.
Versatility
The fundamentals of the finance and accounting department remain intact: create budgets, stay within the budgets, reduce overhead, pay the employees, etc. Thankfully, we live in an era where technology supports and improves these processes for us, strengthening operational processes, customer experience and overall productivity. As CFOs, we must align ourselves with those same technology touches. We need to transform into operational experts to understand where the gaps are and how technology can fill them.
Having a view into other departments enables this transformation. For example, a program at TMF India encouraged finance members to shadow senior executives at client meetings to experience interactions and high-level discussions to understand the challenges other teams face. These simple strategies enable us to immerse ourselves into every area of the business. It’s much easier to connect the dots and dollar signs when you have the firsthand knowledge.
Versatility may also include reorganizing or realigning our finance teams to meet the needs of other departments. We need to create an agile operating model that encourages finance staffers to pivot to the business’s most pressing issues. A team of subject matter experts who are aligned with designated areas but can also be enlisted to provide support with special projects or ad hoc requests allows the finance team as a whole to adapt to the changing needs of the business, which are driven by customers.
Sales ability
CFOs must know how to sell. How else can you raise capital for your company? The selling cycle is typically the single biggest driver of cash out and cash in—the perfect place for a number-cruncher. You don’t have to be an actual salesperson, but you do need to know how to tell the company’s story and understand deeply its solutions and services. You must conduct business as if you’re in a sales role if you expect to meet and exceed your financial objectives for the business.
To capitalize on this approach, CFOs must team up with sales members and engage in the early stages of the sales cycle. Conversations with prospects benefit both parties: we learn the financial concerns, while prospects can have direct communication with the gatekeeper. This builds trust and strengthens relationships, which enables us to deliver the superior customer experience and service we all aim for.
Recently, I presented at the Conscious Capitalism stakeholder event to discuss the work we’re doing to create a thriving economy here in Arizona. It was a humbling experience to be on stage and share Televerde’s story and purpose, but I also took that opportunity to introduce our solutions to show that business can be both profit- and purpose-driven with remarkable results. Regardless of what you’re selling and which part of the business you oversee, every leader must have the ability to present their business to others.
Proper use of technology
In my interview with CFO.com, I explained that a big part of my role is making sure our technology is current, including evaluating all the AI software that’s become available: how to use it and how to avoid overusing it. For Televerde specifically, this also includes assessing the technology limitations we experience working within the Department of Corrections. The key to a successful digital transformation strategy is ensuring that we are targeting and identifying areas of new value across the enterprise and this falls squarely into the hands of CFOs. This means that the automation platforms implemented has freed up more time to assess the needs of other parts of the business—increasing productivity and efficiency.
In our digital world, CFOs must be aware of the digital transformation trends happening outside of our companies as well. Through automation and analytics, we can find value for our customers in regard to high-quality customer data, predictive, and connectivity with client applications. Pair this up with speed and efficiency of technology and the human touch, and we’re on the right path to first-class customer experience.
As the modern CFO continues to evolve, we must continue to adapt to the changing digital economy. CFOs must differentiate themselves from the old guard of finance and be intentional in their pursuit to intimately understand and support every arm of the business. This knowledge allows us to be more innovative and efficient for our employees. And guess what? It makes the CFO role that much more interesting. Consider this: 78% of junior finance practitioners say there’s never been a more exciting time to be a finance professional! We’re transforming the CFO role from geek to chic while doing what we love most: generating revenue!
