Now that businesses across sectors have realised that ‘normalcy’ remains far-fetched, they are focussing on ways to stay relevant. This is the time when the role of CFOs becomes more prominent than ever before. Chief finance officers will be expected to co-pilot businesses with CEOs in the post-pandemic world, reveals the Talent in Finance Survey by KPMG. The report provides insights from over a 100 leaders, including CEO, CFOs, CXOs and board members. Let us see what the study reveals:
Changing roles and responsibilities: Given the level of disruptions that businesses have seen and the growing need to integrate technology with business, a vast majority of those surveyed— 67 per cent— are sure that the role of the CFO will change significantly over the next few years. About 24 per cent feel it will change moderately, while seven per cent feel it will change only slightly. A small section — two per cent — feels no change will be witnessed in the CFO’s role. That means, a good 91 per cent anticipate a moderate to significant change in the role of the CFO.
Changing focus areas and responsibilities: While earlier CFOs mainly focussed on managing the cash and expenses of businesses, and risk and compliance, going forward, the focus will shift. Business growth, talent management and technology enablement will draw more attention. Of course the significance of the CFOs in transformation of business operations will remain more or less the same. Maximum change will be in the areas of long-term business growth, technology trends and strategic leadership. If mergers and acquisitions required 16 per cent focus earlier, now it will require 26 per cent focus. Business partnerships will require 34 per cent focus, whereas earlier they only required 21 per cent focus. Business model transformation will also increase in focus – 49 per cent in the next three to five years, as compared to 22 per cent currently. A good 54 per cent focus will go to tech trends, such as cybersecurity, IT and digital, as compared to the earlier 23 per cent. Talent management will increase in focus from 38 per cent to 51 per cent. Focus on accounting and taxation, capital allocation, cash management, planning, budgeting, and forecasting will reduce drastically.
Organisational enablers for transformation of CFO’s role: The key factors that will enable the transformation of the CFO’s role for the future include buy-in from CEO and boar’, level of digital maturity and evolving culture and mindset among others.
While 70 per cent vote for buy-in from CEO and board, 69 per cent vote for evolving culture and mindset, and 64 per cent vote for level of digital maturity as enablers. A significant 63 per cent consider speed of decision making as an enabler and 57 per cent feel focus on leadership development will enable transformation of the CFO’s role.
The CFOs and finance leaders give more priority to buy-in from CEOs and board members as an enabler than the CEOs and board members themselves.
Emerging functional skills for finance: Based on the responses of CXOs, the emerging functional skills are in the focus areas of leadership development, strategic management, data analytics, information technology (IT) and process automation.
Clearly, the coming few years will require CFOs to adapt and embrace change. Most importantly, they will have to understand the impact of technology trends. They will have to complement the role of the CEOs, such that both CEOs and CFOs can trust each other. Interestingly, 72% CFOs aspire to become CEOs, while only 3% organisations are ready to take on the mantel of CEOs.