CFOs play a significant role in planning out the financial growth path, upholding and building flexibility within an organization. Traditionally, a CFO was associated with fields such as controlling and financial accounting. And the majority of their time was spent on non-finance-related activities, driving the organization towards data-driven strategic decisions.
In a global survey conducted by McKinsey, CFOs were asked about their responsibilities and what do CFOs do. 41% of them reported spending a maximum amount of their time taking care of non-finance activities, which are as follows:
Understanding how the CFO role has evolved and where it’s yet to go provides the unique opportunity to develop new competencies while mastering traditional ones – and rising to the challenge of becoming a comprehensive CFO. For instance, traditionally, CIOs were the buying authority for all new technology. However, today, the CFO’s role is evolving as they are becoming the main technology buyer, especially making the key decisions for considering/implementing global treasury solutions and corporate treasury software because of their high involvement in decision making, cash forecasting, and planning.
During uncertain times, the CFO’s role typically changes with the rise of risks and responsibilities. With the outbreak of COVID-19, CFOs have taken the lead in digital transformation at their companies by becoming the ‘catalyst of digital strategies’. Technology enables CFOs to keep a close eye on liquidity and take proactive steps to prevent and mitigate risks. These capabilities have become more important than ever given the abrupt and severe volatility that many companies are experiencing during the pandemic.
A survey by Mckinsey stated that 88% of CFOs have increased their implementations of automation and AI in their companies with the outbreak of COVID-19. Additionally, the ACT (The Association of Corporate Treasurers) conducted a survey in 2021 that found 23% of treasurers increasingly invested in automating treasury functions, and 47% have begun investing in automation and CFOs software in 2021 alone.
With the confrontation of the COVID-19 pandemic, many companies across fields and areas share that this pandemic has added momentum to their digital transformation. The impact of lockdowns and extended working periods from home acted as an acceleration of the digital journey. Different survey respondents echo this, with over half (56%) encouraged to accelerate their digital transformation by the pandemic.
Treasury software is beginning to reshape the role of the CFO. With AI and machine learning, CFOs are taking small steps toward digital workflows leading to becoming more engaging with tech services and offerings than ever before. Digital technologies or digital tools for CFOs offer them a powerful opportunity to enhance and stimulate decision-making, which depends on the accuracy, availability, and flexibility of data, and flexible/scalable technology support.
Data is vital to the digitization process. A global survey conducted by J.P.Morgan with 130 treasury professionals shows that companies are investing and enhancing their data skills to support their transformation. Some of them describe data accuracy and availability as the prime challenge, while 60% see it as one of their two biggest treasury challenges that include troubles like ‘wet signature’ authentication. Deglobalization pressurizes companies for an extended time which requires flexible support from the treasury for their strategic responses. Moreover, cyber-security stands out as an emerging risk. Corporate treasury software has enabled a smooth digital transformation for working during the pandemic with risks that require well-built safeguarding to stay protected.
Cash forecasting automation eliminates manual work and allows staff to focus on more high-value tasks with:
Certain crucial parts of the transformation are likely to be overlooked without the CFO’s leadership: Managers will be frustrated because there would be no relevant baseline against how to measure progress in their performance efforts. CFOs need to use the CFOs’ tech stack to play a stronger role in company transformations because the involvement of the CFO can lead to better results in terms of improving the organization’s overall performance.
Treasury tools for CFOs help them assess which businesses in the company’s portfolio are best positioned to exploit growth pockets using data granularity. As a result, CFOs are not only better able to create organic growth targets by managing and monitoring performance, but they are also able to develop a clear acquisition and divestiture plan using the information.
In times like these when uncertainty looms big, digital transformation can help CFOs to become strategic. Schedule a demo to learn how AI-based global treasury solutions can help CFOs focus on adding value to the treasury, maximizing growth, and making a business more resilient.
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Colleen Zdrojewski
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HighRadius Corporation
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