How a CFO Can Become Great: Here's How Finance Leaders Can Overcome the 4 Main Challenges in Shaping Strategy and Driving Innovation Necessary for Sustainable Growth

Abstract

Corporate finance leaders face four main challenges. Tackling them will allow CFOs to shape strategy and drive innovation necessary for sustainable growth, but it will also rapidly expand their role, EY research suggests. majority of finance leaders said they are increasingly expected to have digital know-how, use data analytics, and manage risks. They also have to deal more with shareholders and regulators than before, according to a global EY survey of more than 750 finance leaders (see the EY report Do You Define Your CFO Role? Or Does It Define You?, available at tinyurl.com/zjedwk3). Taking on the additional responsibilities is crucial to help develop and enable an overall strategy for the provide insights and analysis to the company's executive management, ensure that business decisions are grounded in sound financial criteria, and represent progress on financial goals to external stakeholders, according to EY. A CFO is required to be a strategic business partner above all else, with an appreciation for all the moving parts in the business, said Pip Spibey, ACMA, CGMA, the CFO at Travelport Locomote, an Australian company that offers a business travel platform. That's probably the most significant shift in recent years. Financial leaders see the patterns in the data and make sure senior management understands them, said Chris Rogers, CPA, CGMA, the CFO of Infragistics, a U.S. software developer with operations in Europe and Asia. great CFO is a partner to the CEO and in private his or her harshest critic when warranted, he said. 4 MAIN CHALLENGES Digital know-how To fulfill critical strategic priorities, 58% of the respondents said they need to better understand digital technologies and data analytics. Two technologies are shaping up to become particularly important for finance leaders to understand: Blockchain, which allows data to be exchanged with the help of a decentralized ledger, could transform corporate reporting. Robotic process automation promises to automate and reduce the cost of backoffice processes. Twenty years ago, PivotTables were cuttingedge, Rogers said. Mobility is today's challenge-- taking disparate systems and putting them in the cloud and making them secure and accessible in real time, so you can make decisions today instead of tomorrow. Digital savvy is a priority across industry sectors because it offers opportunities for growth--in new markets, through new products and delivery models, or by transforming existing products. Financial leaders who understand how their company can deliver on its digital strategy can coordinate and focus investments accordingly. Digital issues to tackle include global tax implications for how goods and services are sold; where companies base their operations; robotics; and new competitors. good digital strategy helps a company figure out which technology provides the best return on investment and possibly other intangible benefits, Spibey said. Not everything will work for your business. Data analytics In the past decade, half of the finance leaders polled by EY have increased the amount of time they dedicate to advanced analytics to provide more insight to the CEO and senior management. Of the respondents in the 2016 survey, 57% said that being able to deliver the data and advanced analytics will be critical for the finance function. Using big data along with your own internal data makes your internal data even more powerful, and it provides context and connection to the marketplace, Rogers said. For companies to turn these efforts into a longterm competitive advantage, data must become integral to the business strategy, and analytics delivery must match business requirements. To gain more value from analytics, business leaders should focus on training, easy-to-use tools for data users, and aligning incentives, rewards, and measurements. …