How can CFOs balance competing demands to drive future success?

Mar 26, 2021

As we begin to emerge cautiously from the pain and disruption of recent times, finance leaders must look to the future and determine how best they can lead recovery. George Deegan explains.

There is no doubt that, collectively, this is one of the most challenging environments businesses have ever faced. For CFOs, there are several competing demands that have increased the complexity, not least the need for immediate stabilisation and the need to thrive into the future.

The need to protect value and drive growth is an exciting challenge for finance leaders. Building trust in data analytics and emerging technologies like robotic process automation, Blockchain and artificial intelligence is critical to making a digitally-enabled and talent-rich finance function. The key challenge for the CFO, however, is finding the balance between technology and people.

Technology and change

The accelerated pace of technological change has had a profound impact on the evolution of the CFO role. With volatile markets and the rapid advance of technology, not to mention new market entrants, it is imperative that finance is transformed into a data-driven, smart function that makes better decisions.

For CFOs, the key battleground is leading the transformation that ensues from technological innovation. A large part of that is anticipating how technology will transform the way the finance function adds value, and how it can create innovative conditions for the function to thrive in what has traditionally been a risk-averse culture.

The ability to transform into the future will depend on the ability to maximise new and emerging technologies, while also leading on ethics, trust and transparency in the digital age.

Finding and retaining talent

Finance leaders have a key role to play in the way they shape and develop their team. To attract and retain top talent, it is important to focus on engendering an open culture where innovation thrives. Finance teams must blend tech-focused skill sets with broader finance experience, including treasury, tax and transactions. Many CFOs feel they are still particularly renowned for being cost-focused and risk adverse at a time when they need be tech savvy and future-focused.

In response to the current environment, the workplace is now more digital, more flexible and far less hierarchical because structure, governance, employment models and reward approaches must adapt to survive. More agile approaches will facilitate greater productivity, flexibility and resilience as operating models and customer expectations undergo rapid shift.

Assessing processes

There can be little doubt that finance leaders are under pressure to reinvent the way their function operates. CFOs are being asked to cut costs and do better with less, during a time of significant change.

The balancing act that CFOs face today is making decisions about technology, people and processes, that are aligned to meet competing demands and position their functions for future success. Delivering the future finance function will demand a major purpose-led culture shift.

The CFO agenda

The CFO agenda is being driven by the need to evolve business strategy and create long-term stakeholder value while managing costs at the same time. In response to change and the need to deliver long-term value, the nature of the CFO role and demands on finance leaders are growing.

By making decisions about technology, people and processes, the role of a finance leader is increasingly evolving to become more of a strategic adviser. Yet, CFOs still find themselves directly involved in a range of traditional responsibilities, which must be balanced against the demands of new areas and expectations.

George Deegan Assurance Partner at EY Ireland.