For some time, experts have been saying the role of the finance function, and the CFO in particular, is fundamentally changing.
That message was brought vividly to life during Miagen’s recent event for finance professionals at Benz Mercedes-World UK, where senior executives in the technology, transport and logistics sectors shared their insights.
John O’Mahony, a director with KPMG’s UK management consulting practice, explained how two-thirds of CEOs expect the role of CFO to become more important over the coming three years. In a presentation based on KPMG’s ‘The View from the Top’ survey, he said CEOs expect the regulatory environment as an opportunity to derive competitive advantage.
KPMG’s survey found a clear majority of CEOs from top-performing organisations believe the single greatest strategic value a CFO can bring to an organisation is in applying financial data to achieve profitable growth. Overall, the ‘strategist CFO’ adds value in five areas – performance, governance, control, efficiency and innovation.
KPMG’s research lists six defining characteristics of top-performing CFOs:
- Drive finance to optimise global business strategy
- Turn the regulatory environment into a competitive advantage
- Stay ahead of technology and mastering the complexities of data analytics
- Have a deep knowledge of the business and its customers
- Find the right model for the finance function
- Invest in and motivate talent, promote key skills and collaborates.
Breaking this down into more detail, a CFO is expected to apply financial data and analytics to meet new regulatory requirements and also to identify new opportunities in the business – ultimately, having a positive impact on business performance and growth.
CEOs expect their CFOs to take the initiative to apply financial data analytics to explore new products, markets and channels. One of the main priorities for CFOs will be to strengthen the alignment between financial planning and corporate strategy.
Seven out of 10 CEOs say technology will have the greatest effect on the future role of the CFO, but less than half think their CFO is doing a good job at exploring and implementing the best new technology.
55 per cent of CEOs say they plan to invest in deploying or expanding finance ERP software in the next three years and 44 per cent plan to invest in decision support tools, capabilities and skills.
In his presentation, Miagen’s CEO Teddy Murphy outlined a number of challenges that companies face with their financial planning, and spoke about some of the best practices that Miagen can facilitate, including driver-based planning that’s built around key performance indicators within a business. By moving to a driver-based planning model, CFOs can quickly see how focusing on Drivers directly impacts operational profitability.
Teddy also spoke about how many CFOs struggle with getting rolling forecasts in place because they’re fighting against the extended amount of time it takes to assemble usable information with their current systems. He explained how Miagen builds its models and applications on the Adaptive Insights platform, which enables faster insight.