The role of CFO has changed dramatically over the past few years. From a focus on financial matters to leading technology initiatives, CFOs need these skills for the future.
Chief Financial Officers historically spent their time heading the accounting and finance functions for the organization, but modern CFOs are likely to find their role changing dramatically. In smaller organizations, IT functions often report to the head of finance and operations but this structure is becoming more of the norm for businesses of all sizes. The head of finance may soon see their purview expanding over the years, becoming more strategic while continuing to be an integral part of business operations. From technical skills to people management, here are a few of the skills that the next generation of CFO needs in order to be successful.
Business leaders in the finance and healthcare world have long dealt with complex compliance requirements, but all types of businesses are now being threatened with the risk of data privacy and compliance. The past few years have brought a range of data privacy requirements from GDPR in Europe to California’s new Consumer Privacy Act, each with their own idiosyncrasies and requirements. Data privacy policies need to be robust and well-communicated to constituents or you risk large fines from the government. If your organization doesn’t have an individual devoted to security, it’s likely that this will fall to the CFO.
Measures of the organization’s success used to be relatively straightforward: revenue, expenses and balance sheets. Today’s CFOs are more likely to be analyzing complex dashboards of business metrics that can help executives and managers fine-tune the results of the organization in a way that would have been difficult in the past. This is truly an exciting time to be in a financial leadership role as this type of insight — when well organized — can allow you to more accurately predict future challenges and opportunities. On the flip side, finding the right measures can be a significant challenge for business leaders and can result in distraction and a loss of focus on priorities. Don’t expect all of the news to be good, either. Leaders who are introducing organizational metrics often find that they are the bearers of bad news for teams, a situation which can be challenging if not handled carefully.
Part of the benefit of seeing the full financial picture of the organization means you have greater insight into any operational speed bumps and are in the rare space of being able to affect change. Many businesses are looking closely at outsourcing core functions that are not a core competency of the business, especially for teams that need in-depth knowledge of complicated topics. Technology teams are a logical place where many CFOs are turning to balance the budgets, as outsourced IT infrastructure becomes a more popular option that is well-trusted by many business leaders. When internal IT teams are allowed to target their attention to innovation and internal processes and allow IT services partners to handle cybersecurity, cloud storage and help desk functions, CFOs are finding that business flows more smoothly — boosting operational efficiencies for the entire organization.
The CFO role is in transition, shifting from the head of finance to managing a realm that also includes technology, operations and business controls. Modern CFOs find themselves managing this growing portfolio by actively working with stakeholders at all levels of the organization and actively searching for opportunities for cost-reductions and enhanced productivity. The entire finance vertical will find that there are additional requirements around analytics, reporting and technology — but these new business challenges are what keeps many CFOs invigorated and eager to make a difference in their organization.