Despite the rapid digital transformation progress, many CFOs have been using advanced financial modeling to identify future risks and opportunities.
As the pandemic continues to challenge enterprises globally, the role of chief financial officers (CFOs) has moved beyond the economic leaders for businesses. The increased digitalization has now pushed CFO as the architects of business value as well as the “catalysts of digital strategies”, reveals a recent Accenture study.
Nearly 72% of the CFOs worldwide reported that they have an ultimate say in the appropriate technology direction in an enterprise. Indeed, financial leaders are broadening and transforming their business roles. Besides COVID-19, some other peripheral challenges include digitalization, market dynamics, and fast-evolving CXs.
Currently, CFOs are often being asked to ensure that their organization aptly mitigates the potential cyber risks by addressing the ESG performance. Simply put, this involves environmental, social and governance, and security challenges faced by a company.
In this context, Christian Campagna, Senior MD and Global lead of the CFO & enterprise value practice at Accenture, explains – “The role of the CFO has further evolved beyond serving as the finance lead to becoming a ‘digital steward’ of their organization.”
He added, “Increasingly, CFOs are focused on collecting and interpreting data for key business decisions and enabling strategy beyond the borders of the finance function.”
As a result, faced with never-like challenges driven by the global pandemic, modern-age CFOs are required to execute their business strategies at breakthrough speeds. This will undoubtedly help in creating value and success that could be realized across the company.
According to the study, an elite group of CFOs (17%) who have transformed their responsibilities effectively resulted in positive changes to the top-line growth and bottom-line profitability of their organizations.
Actually, CFOs who exemplify their new roles overall while operating effectively at breakthrough speeds can double their EBITDA CAGR. This is precisely from 3.8% to 6.9% in the next three years, along with increasing their revenue CAGR – from 2.7% to 3.0%.
In this digital era, companies are increasingly looking to CFOs to lead the ideas and thoughts around the future operating models. It will help businesses drive the technology agenda forward, alongside a focus on security and ESG.
In fact, nearly 68% of the CFOs noted that finance takes ultimate responsibility for ESG performance in an enterprise. However, about 34% of finance leaders also cited concern about data and privacy breaches as a significant barrier – which is preventing companies from realizing their potential as a strategic change push.
Hence, leading the enterprise amid the widespread disruption indicates that CFOs must expand their digital skills and technology responsibilities if they are to be truly responsive to the organization’s needs.
Clearly, the CFOs that embrace new roles with such capabilities will certainly drive greater value at even greater speediness than their competitors.