The role of the CFO is changing. Now more than ever, financial leaders are being asked to step up as strategic leaders and provide more technological expertise.
In fact, CFOs are becoming a top choice in the competition for new chief executive officers, according to a story in The Wall Street Journal. “CFOs are among the few corporate officers who, like the CEO, are given ‘carte blanche’ to poke around in every area of the business and ask whatever questions they want,” says the WSJ, pointing to Marriott International Chief Executive Arne Sorenson, who previously served as Marriott’s CFO.
So how exactly is the CFO role changing?
Expanding Reach across the Organization
Many CFOs are now playing a stronger role in corporate portfolio management and capital allocation, says a McKinsey & Co. report. “The right fit between a company and its CFO involves a complex set of trade-offs reflecting its strategy, [and] the skills and abilities of top management and the finance function.”
Ernst & Young Global Ltd.’s “The DNA of the CFO” study shows CFOs are providing more strategic input as they develop deeper relationships with business unit leaders. CFOs’ confidence in their strategic strengths is also reflected in the EY study, with 61% of CFOs saying their standing within the organization has improved in the past three years.
Taking Leadership with New Technology
In a recent report, “The CFO as Architect of Business Value,” Accenture analyzed the ways finance leaders are facilitating the growth and transformation of their organizations. Making the right technology investments is critical in the current global economy and so companies are relying more than ever on CFOs’ strategic leadership in this area.
Accenture found that 85% of companies will commit funds to new digital technologies over the next two years, with 85% investing in cloud computing or software as a service, 82% in big data and analytics, and 65% in mobile. Further, while 4% of CFOs say they have fully deployed big data and enterprise analytics, 20% aspire to this stage in two years’ time.