Top concerns of a CFO
It is never a bad time to look forward to changes that might have an impact on the business… especially financially. Many CFOs find that they’re faced with four primary areas of strategic focus - which has always been the case for many years.
To fund growth opportunities with new markets, products or acquisitions - while maintaining the current topline growth.
Accurate reporting of financials and compliance with laws.
Identify cost efficiencies and fund investment projects - from digitalization, automation to new technologies.
Drive profits and cash flow to increase market capitalization and long-term investor value.
Still, many CFOs are concerned about processes and technologies that support their strategies -"Mainly on data, technology, talent management, Cost control, achieving finance excellence and sustaining it."
With new data processing and storage technologies, the cost of acquiring and processing the data has come down considerably. This should have improved the data availability, reliability, and usage but often the contrary is true. Few things are more of a “time-waster” than having the information in multiple, disparate databases and not immediately available for usage. This leads to low-value, often manual processes and creates a huge drag on the department’s agility. Data Management and Data Governance is key to manage data to make it both business relevant and efficient.
Technology poses both challenges and opportunities. While new technologies like Robotics (RPA) and digitalization provide more cost savings, it needs to be balanced with existing IT investments and need to be prioritized based on suitability, usage and return of investment vs other projects.
Technology and processes are built around people to work effectively. While the core finance concepts for finance remain stable, new technologies demand that the workforce is adept at learning new tools to use them effectively. Also, the finance team is expected to keep abreast with technical data concepts with emphasis on “self-service” data analytics. Managing audit and compliance risk requires the finance team to be updated on the latest compliance laws and regulations
Finance has long been the keeper of the checkbook and creating cost structures, but the task of controlling costs has become increasingly complicated yet still essential to long-term strategy.
Structuring costs to drive a specific competitive strategy Managing costs relative to external benchmarks and investor pressure Acting on cost-related risks and opportunities resulting from the business cycle And they are asked to do this all while under pressure from their investors to control costs and from business leaders to fund growth opportunities. Unfortunately, this pressure can result in knee-jerk reactions trying to protect shareholder returns when it comes to managing cost pressures and uncertain times. Often, they will reduce headcount, switch to lower-quality supplies, or delay capital and innovation investments. These types of initiatives may keep senior management happy, but they often have a negative impact on employee morale, brand value and eliminate the resources needed to achieve long-term goals. It is a fine balancing act, but some companies have seen extraordinary returns for their organizations by being successful at it.