May 2023

Mayank Khandelwal, Head of Finance for NEC Corporation’s Global Regional Headquarters (RHQ) and Country Affiliates (CA)

As the world hears the drumbeat of digitization ringing louder than before, CFOs are stepping up as the designers of future finance functions. Let’s observe and analyze the steps as to how.

In today’s fast-paced world, where CEOs are concerned with avoiding risks and expediting growth, CFOs are expanding their horizons and donning multiple hats. There was a time, not too long ago, when the primary role of a CFO was to be the steward of the company. Their purview was limited to performing tasks such as cost control, financial reporting, budgeting, safeguarding assets, cash flow management, interpreting performance and risk management among others.

With the changing times, the functions of a CFO have expanded from implementing cost-cutting strategies to looking for investment opportunities to drive growth. Deloitte’s ‘CFO Signals survey’ for the second quarter of 2021 found that 42% of the CFOs define their primary role as that of a co-leader. To drive their organization to be more successful, CFOs need to work closely with all departments to chart out measures to enhance brand visibility and optimize efficiency in operations and logistics.

Leveraging Cross-functional ethos

The widespread disruptions caused by the pandemic revealed the challenges in the traditional business models which failed to operate in the face of crisis. Apart from being a counsel to the CEO on financial matters, they also need to leverage cross-functional relationships in the organization. The CFOs of the borderless world have to be result-oriented and focus on improving operations, developing better business strategies and delivering results. The new-age finance executives are tasked to not just guard the organization’s resources with all their might, but also bring about dynamic transformation throughout the organization.

One of the major responsibilities of a present-day CFO is to not just mitigate risks but also be able to detect and analyze them before a crisis arrives at the doorstep. In order to make bullet proof business strategies, which can withstand unforeseen crisis, CFOs need to successfully leverage new technologies for making data-driven strategies. By successfully leveraging the power of big data, one can seek better insights into the operations of the company and prioritize refining the business strategies to prepare better for a digital-first future. Companies have benefited immensely from tools such as data analytics which allows them to understand ongoing trends and create a narrative that positively influences their audience.

Post 2020, businesses across the world have had to normalize remote workforce. Initially seen as a challenge, the hybrid work mode has revolutionized cross-functional relationships. But experts believe that the popularization of remote work has opened a large gateway of opportunities for CFOs since the creation of a borderless world which has made talent recruitment much easier. Skilled candidates are being readily outsourced by companies; a norm which was earlier made arduous due to the limitations of geography. Top CFOs, most of whom oversee HR, are increasingly recruiting outsourced talents that work in alignment with directly managed offshore teams to cut costs and increase efficiency.

CFO key skills: Jack of all

CFOs today need to be creative, understand best practices, and know how to create more value for the company. The role of a CFO stands at a very crucial tipping point in the present times, where one has to learn to balance traditional responsibilities alongside driving CEO’s strategic corporate narrative to keep the stakeholders well informed. The normalization of remote work has shifted the spotlight on the ever-expanding digital landscape.  Hence, the CFOs of the post-pandemic world must be digitally savvy and possess the ability to derive insights from tonnes of data. As for aspiring CFOs and finance chiefs, responding to risks with quick action and continuous learning will matter the most.

The responsibility to synergize finance and other business units by helping in the skill development of employees lies with the CFO. Having first-hand experience in understanding and analyzing the intersectionality of strategy and financial management, as a leader, a CFO must encourage team participation and propagate a democratic exchange of ideas to emphasize the power of collaborative work. Hiring and retaining the right professionals with the right skillset may pose a great challenge to finance stewards. Therefore, in order to achieve set targets and ensure effective communication and collaboration with the team, it’s imperative for the CFOs to introduce finance professionals to other functional areas of business and train them to drive results.

Merely bringing business strategies to the C-suite table is a drop in the bucket for CFOs today. CFOs need to think beyond the obvious, expand their horizon and come up with integrated solutions.