CFOs Future-Proof Operations With Data-Driven Decisions

The evolution of the CFO role reflects the changing landscape of the business world.

From strategic planning and investing in technological innovation, to ensuring effective risk management in light of the shifting macro backdrop, today’s CFOs, once primarily tasked with bookkeeping and financial reporting, are at the forefront of driving change and creating value within their organizations.

“At the end of the day, the CFO is not there simply to report the past and model out potential outcomes. Finance teams need to understand the dynamics of the business. What is the customer experience like, what is the technology that we’re using behind those offerings? And more importantly, what does the service operation look like?” Marc Mehlman , CFO at Ascensus , told PYMNTS during a conversation for the “ Day In The Life Of A CFO ” series.

“Those are all critical elements to the business,” he added, “and if finance doesn’t understand those, then it’s very difficult to be a true partner.”

That’s because, no longer confined to the back office, modern CFOs are now front and center in strategic planning and execution. As the role continues to evolve, the successful CFO will be one who can adapt to new challenges, leverage technology and lead with a strategic vision.

In support of this future, Mehlman emphasized the importance of data and data analytics, which are increasingly enabling CFOs to derive actionable insights from vast datasets and optimize performance across various functions.

“Ensuring the right access to data, and in a timely fashion, is required,” he said.

Finance Teams Tap Technology to Transform Impact

Technology has played a pivotal role in the evolution of the CFO role. The advent of advanced data analytics, artificial intelligence (AI), and machine learning has provided CFOs with tools to forecast trends, optimize operations and make data-driven decisions.

“People drive [business growth], process makes it efficient, and the tools make the difference,” Mehlman said.

These technologies have also enabled the automation of traditional finance functions, freeing up CFOs to focus on strategic initiatives. As a result, today’s CFOs must be adept at leveraging technology to drive efficiency, innovation and business knowledge within their organizations.

“In this day and age, technology investments are at the forefront of a lot of the decisions that we’re making. And it’s critical to understand not just what is the tool that you’re looking to implement, but do you have the skill sets within your organization to actually do so…as well as the culture to support those changes,” Mehlman said.

“We have just over 5,000 associates. And for me, I would want every one of those associates to truly understand how we make money and what the strategy is behind the decisions that we’re making. Because — when they’re faced with a business problem — they’ll have that much more context,” he added.

Still, despite the sea of changes underway within the CFO office, there remain some immutable aspects of the role — and likely always will.

“Cash management and capital structure are constants of the role — as is constantly being aware of when opportunities might present themself by keeping a pulse on the market,” Mehlman said. “As is ensuring that we are forecasting the business appropriately. Decision makers need to have that information at their fingertips to be able to execute.”

This includes information around everything from financial risks, such as interest rate changes, to operational risks, such as supply chain disruptions and cybersecurity threats.

Embracing Innovation to Build the Future

A recurring theme in the discussion with Mehlman was the role of the CFO as a true business partner. Beyond financial reporting and analysis, modern CFOs are expected to possess a deep understanding of the business operations, customer experience and technological landscape – particularly around today’s most exciting innovations, like AI.

“Everybody’s talking about AI right now, and we’ve had some interesting conversations as a leadership team over the last several months,” Mehlman said. “Once you figure out the why, then you figure out the how, and then the question is the financial implications of doing so.”

He added that advice he would give to other CFOs is that “business is a team sport. There are people all around you that have been through situations that you’re about to go through or are in the process of going through. … It’s okay to listen and ask for help.”

In envisioning the future of the CFO role, Mehlman said he foresees a trend towards CFOs taking on more operational responsibilities within organizations. By gaining firsthand experience in operational roles, CFOs can develop a deeper understanding of business dynamics and become more effective strategic partners to their colleagues across departments.

“CFOs will be that much better of a partner having walked in the shoes of their colleagues,” he said.