If you don’t know what’s coming, you can’t prepare for it.
And, as the old adage goes, a failure to prepare is preparing to fail.
That’s why, as the CFO landscape continues to shift, there are five key themes that financial leaders need to know:
Additionally, strong financial management and protecting the balance sheet are always vital, and CFOs must ensure that the fundamentals of the role have been blocked and tackled appropriately before moving to integrate innovations and advancements like AI solutions.
But, one thing PYMNTS has repeatedly heard from CFOs, is that as the role expands so too does the influence of the finance function across the broader organization.
Read more: Why CFOs Sit in the Middle of Effective Process Modernization
Historically focused on financial reporting, today’s CFOs now find themselves deeply involved in collecting, analyzing and predicting financial data. And with technology playing a pivotal role in business innovation, CFOs must also be well-versed in leveraging emerging technologies to enhance business performance.
“Walking into a very technology-forward company that realizes the value of data has just been a blessing for me versus walking into a young company that is maybe under invested in that way,” Anna Brunelle, CFO at May Mobility, told PYMNTS in February. “As a CFO, being on top of current technology is really important structurally for so many areas of the business.”
That’s because areas like liquidity management, working capital management, compliance, cybersecurity and fraud prevention are more important than ever. Businesses working with legacy functions across these areas can find themselves vulnerable not only to nimbler competitors, but also to bad actors.
The disastrous downstream impact that suspected ransomware gang Blackcat’s cyberattack on UnitedHealth Group’s technology unit, Change Healthcare, continues to have on the U.S. healthcare and pharmacy system serves as a critical reminder of the importance of investing in data security and establishing best-practice business continuity programs.
That’s why some CFOs are going deep on a smaller number of investments rather than spreading resources too thin as they chase both process efficiencies and a compelling ROI on digital investments.
“Digital transformation has really enabled us to evolve,” PayByPhone Chief Financial Officer Nick Hamill told PYMNTS, noting that the immediate impact of digital integrations includes relying less on manual processes and scaling key processes without the need to increase headcount.
“Technology-driven growth, especially artificial intelligence, especially automation, these are things that as a finance department that we can really leverage,” he added.
See also: Adaptability, Alignment and AI Will Define CFO Role in Future
With the vast volumes of data available to them, today’s CFOs are increasingly assuming the role of data stewards within their business. By leveraging advanced analytics and cloud technology, CFOs can drive strategic insights, improve forecasting accuracy and optimize cash management.
“Finance is more of a gatekeeper than they ever were in the past, and it’s critical to make sure that the data’s pulled from the right source, the information is accurate, the information is clean, the right users have the right access to the right information … Effective automation leads to efficiency, which hopefully leads to increasing accuracy and profitability,” Lisa Mogensen, CFO at RiskOptics, told PYMNTS in December.
“The challenges are having the right talent, cutting the right costs, improving our forecasting indefinitely and monitoring profitability,” Mogensen added.
AI in particular can help give finance teams a shot in the arm in surfacing and socializing business-plan-relevant information and insights at speed. Today’s CFOs should leverage — and increasingly, are leveraging — AI and advanced analytics tools to extract actionable insights from financial data, aiding in better decision-making.
“A perfectly legitimate historical criticism of most finance departments is [the lack of] timely delivery of information,” Daryl Stemm, CFO at SmartRent, told PYMNTS in January, adding that innovations like AI are already having an impact and enabling quicker decision-making.
“The enemy of both efficiency and effectiveness, not just within finance but within business, is people — if you’re relying on a person to swim through vast amounts of data and find the important bits and pieces, it’s going to take a long time to perform and be more prone to error,” he said.
The CFO’s role has evolved to include a closer partnership with technical teams, including CPOs, CIOs and CTOs, to identify and integrate digital tools that improve efficiency and enable departments to play offense rather than defense when it comes to responding swiftly to market changes.
And, given the landscape right now and in the future, embracing that evolution might just make all the difference.