Written by Brendan Walsh, Senior Vice President of American Express Global Corporate Payments Europe.
22nd November 2013
Encouraging innovation is most important contribution to growth the CFO will seek to make within the next two years.
What does it mean to be a CFO today? The economic downturn clearly affected British businesses in a number of ways and created a number of challenges for finance departments and CFOs, many of whom were been tasked with cutting and controlling costs.
As a result, the downturn appears to have had a profound impact on the nature of the CFO’s role.
American Express recently undertook a global study of over 500 CFOs, which uncovers fascinating insights into how the CFO’s role and responsibilities have evolved since the onset of the recession.
As well as maintaining a steady hand on the tiller of the firm’s finances, CFOs have become increasingly influential when it comes to business strategy, growth and delivering value – both internally and for customers.
Two-thirds (66 per cent) of the UK-based CFOs questioned believe that the recent global economic downturn either greatly or somewhat enhanced the finance function’s profile and influence within the company.
Specifically, the CFO has become more of a catalyst, spurring the wider organisation to execute necessary changes. As well as an advocate for change, CFOs have become more of a steward, in many cases directing risk-management efforts to ensure the company has met its compliance obligations.
In order to make informed decisions to effect organisation-wide change and take the business forward, it will be essential for CFOs to have clear and accessible data at their fingertips. Good visibility of live business information will be key for CFOs to have an overview on what changes are possible and indeed necessary for the company to succeed.
Advocates for growth
As agents for change, CFOs are being relied upon to help facilitate growth.
When asked about the greatest contribution the CFO could make to enabling growth over the next two years, the most popular answer is to encourage innovation (40 per cent); for example by feeding insight to management on under-utilised company assets, in order to provide new avenues for growth and development.
Alerting management to new markets (37 per cent) and taking a leadership role in advocating growth-seeking breakthroughs (33 per cent) are also high on the list.
Reflecting the evolving role of the CFO, the key skills that senior finance professionals need to develop are also changing. CFOs believe that the most important skills they will need to build upon over the next two years are risk management (53 per cent), strategic thinking (50 per cent) and international business acumen (37 per cent).
Freeing up cash for growth, as well as spotting opportunities and avenues for international expansion, will therefore be key for CFOs going forward. And with over half (57 per cent) of them saying that their company will focus primarily on exporting to foreign markets over the next year, it will be increasingly important for CFOs to work with expert partners with a global footprint in order to facilitate growth worldwide.
Delivering customer value
Whilst CFOs are becoming more involved in business strategy and growth, a key part of their role will always remain focussed on the bottom line. But as well as making sure their company is as profitable as possible, CFOs are also helping their customers to keep costs down.
The majority (77 per cent) agree that their company is operating in a ‘value economy’ and that over the next year extending their competitive edge will depend on improving value for customers and extracting value from the supply chain. With this in mind, 86 per cent say that over the next year, they would have more input than ever in improving their company’s ability to deliver value to customers.
As we approach 2014, it appears that CFOs are exerting more influence and authority at the boardroom table than ever before.
Although the CFO has always been a company lynchpin, their growing role in driving business change, fuelling company growth and delivering customer value has significantly expanded their remit. This growing influence and extended role means that CFOs are juggling a number of different priorities.
With effective financial management tools and flexible global partners, these new responsibilities can be easily managed and the superman, or superwoman, CFO will be able to focus on making a real difference to company success.
Source: Director of Finance Online