The top challenges for today's CFO

Marina Kelman CPA

CFO MLC Life Insurance

Today’s CFOs play a broad number of roles in an organisation – and this presents challenges and opportunities. With this “access all areas” pass, CFOs need to be very thoughtful in identifying which business issues, beyond the traditional finance areas, are the most critical to lend their expertise and influence to. 

In this challenge lies an opportunity for CFOs to partner with CEOs and peers to solve critical business issues, but they need to be selective to create maximum business value.

The world is changing rapidly, and this is creating new challenges for CFOs. As some industries experience swift disruption, either through competitor or regulator action, budgeting and forecasting is becoming a less precise exercise. Scenario planning and presenting a range of possible outcomes are becoming more and more important. Organisational culture is becoming more focused on social responsibility. A challenge for CFOs is to recognise this shift, be part of the dialogue and, at the same time, ensure that enterprises continue to operate with financial sustainability. 

CFOs need to be able to articulate critical facts and provide a balanced view for the benefit of all stakeholders.

A challenge – and an exciting opportunity – for CFOs is to partner with their technology peers, using newly available data analytics tools to complement traditional accounting information for better performance management.

“CFOs need to be able to articulate critical facts and provide a balanced view for the benefit of all stakeholders.” Marina Kelman CPA

As CFOs face these challenges, how do they provide better insights that link financial and non-financial business drivers and leading and lagging indicators to propel a business forward?

James Harkin

Asia Pacific director, Workday Financials

To drive business growth and lead in the increasingly digital age, the key challenge for CFOs is understanding how to transform and redefine their function so they are properly equipped to play a key role in guiding their organisation for the digital age.

The recent Workday-commissioned Finance Redefined study, which focused on 10 major industry sectors, aimed to highlight how senior finance leaders are addressing this challenge. The clear message was that CFOs need to become more analytical and innovative, and they can do this by changing their approach to four key areas: resilience, intelligence, leadership, and talent.

While growing regulatory scrutiny and rapid technological change top finance leaders’ list of risks, only 39 per cent of finance leaders surveyed felt highly confident about managing risks. To create more resilient finance functions, CFOs need to have the right systems and data management practices in place. They need to be the force within the organisation in driving digital transformation.

While advanced analytics is critical to the finance function’s ability to inform decisionmaking, the survey showed that only 35 per cent of corporate finance teams admitted that they were making extensive use of advanced analytics in key finance areas such as planning, budgeting and forecasting.

“To create more resilient finance functions, CFOs need to have the right systems and data management practices in place.” James Harkin

CFOs face the challenge of working with peers to orchestrate the introduction and deployment of new technology that helps make jobs more efficient and increases employee engagement, while at the same time ultimately reducing the costs associated with recruiting and retaining valued talent.

James Wood

Associate director-big data, analytics and insights, risk and compliance, accounting and finance at Hudson

While there has been talk about technological revolution, there’s been a lag in businesses identifying what this looks like for them. As a strategic adviser to senior leadership, it’s the duty of the CFO to play a lead role in the organisation’s transformation. Working out how to finance the transformation is paramount; the challenge, however, lies in influencing the decision-makers to execute the new strategy, as heavy costs are inevitable.

Whether the CFO is accountable for the organisation’s transformation journey or whether that responsibility falls elsewhere, the CFO must play an integral role in building and commercialising the road map. 

To remain competitive, it is essential companies look into investing in new technology, the possibilities of AI, robotics and machine learning, all of which will foster automation and insight. It is easy to get carried away with “the latest toys”, but every company needs a tailor-made solution. The challenge is to ensure the solution offers maximum value and return.

“Not only does the CFO need to finance a new workforce, they must champion the cause.” James Wood

A modernised business requires the right people with the right skills, which is a balancing act. Often there’s a natural crossover between older and new skill sets, where companies are still running old processes and business models while trying to implement new ones. Not only does the CFO need to finance a new workforce, they must champion the cause. Technologies will change, so building and upskilling a culture that thrives in a modern change environment is the single most important thing a CFO can do.