Almost 1 in 3 CEOs don’t think their CFO is up to the challenge

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According to a KPMG survey of 500+ executives, nearly one-third (30%) of CFOs are not meeting their CEOs expectations. In particular, CEOs feel their CFO does not understand or assist them with the challenges they face when running their company. In order to meet the ever-raising bar being set for them and provide the analysis and insights that their CEO and business partners crave, CFOs must look towards data automation to overcome challenges like disconnected data, manual processes and internal bottlenecks that would otherwise relegate them to the traditional role of financial steward.

Read this post to learn:

  • Why failing to meet the CEOs expectations is actually a great opportunity for CFOs
  • How a lack of data automation leads to challenges and bottlenecks making it difficult for CFOs to grow into the role that is expected of them
  • How finance teams can leverage data automation to create additional capacity to deliver the analysis and insights that the business craves

The role of CFO is more important than ever

While some may perceive failing to meet expectations as a negative, the issue highlights just how vital the CFO has become to the organisation. Charles Holley, former CFO of Walmart, believes that the CFO, better than anyone, is ideal to be the right-hand of the CEO - “the person the CEO can trust to have informed opinions on company issues and candidly discuss the business” (link). Another survey of 321 CFOs revealed that a “strong working relationship” with their CEO and board is critical to their achievement and career longevity.

In an age of digital disruption and company transformations, the CFO is more vital than ever before. While still being responsible for the financial stewardship and operations of the company, the modern CFO is also expected to be a catalyst and strategist, helping the CEO with their goals and ambitions for the company.

Changing role of CFO

CFOs play a critical role in transformations, where, according to Boston Consulting Group, 52% of large public companies in Europe and North America announced transformations in 2016. Furthermore, most of these companies announced successive rounds of cost restructuring, reorganisations and downsizing within two years. The CFOs attention is vital for transformations in shaping priorities, defining KPIs and communicating the value creation story to investors.

The CFO is also the person that will need to align divisions or business units to a shared company strategy. Along with strategic alignment, the CFO is expected to implement processes that track ongoing performance and monitor the risks to help ensure that the company strategy is executed successfully and within acceptable risk tolerance thresholds.

Finance has a seat at the table. But the business hungers for analysis and insights

Strategic CFOs are also expected to act as the business partner to leaders across their company, including the CIO, CMO, Head of Sales, HR director and so-on. By having these relationships and active lines of communication, the CFO can ensure that all critical decisions have a financial lens applied to them.

In particular, business leaders want their CFO and the finance department to leverage the organisation’s data and provide actionable insights. The reason this is so powerful is because finance typically has:

1. Access to data (from across the company); and
2. An understanding of the end-to-end value chain of the company; and
3. The inherent data and financial literacy of the CFO and finance team

Data driven CFO

According to KPMG, 85% of of CEOs (source) believe the surest way to profitable growth is in their finance departments ability to analyse data and produce meaningful insights. This is further supported by a PwC Benchmark Report that found the best performing companies spend, on-average, 20% more time on analysis rather than gathering data.

Old problems making it difficult to meet new expectations

“Finance often is up to its ears in manual repetitive tasks that bog down the function” Sandy Cockrell, global leader and U.S. national managing partner of Deloitte’s CFO Program

In addition to meeting these new expectations, CFOs are still responsible for meeting compliance requirements and reporting deadlines. They must also motivate and retain talented finance staff and not only tackle an evolving regulatory burden but turn regulatory compliance into a competitive advantage.

Therefore, CFOs and finance departments must unshackle themselves from challenges that have traditionally stifled agility and growth of the finance function - in particular, disconnected data, manual processes and internal roadblocks and bottlenecks.

The average finance staff member spends 25% of their day processing data in Excel, much of which is for preparing reports and analysis for executives, regulators, customers and vendors. Spreadsheet-based data processing is also responsible for many of the bottlenecks that hamper critical finance workflows. Finance teams often become utterly dependent on key knowledge workers who have an intimate understanding of complex, often critical, spreadsheets that can hold-up the rest of the team during month-end, causing missed deadlines and compliance issues.

The answer to these challenges should come in the form of modern, cloud tools capable of performing data automation.

CFOs need to leverage data automation tools to create additional bandwidth

Assuming that CFOs can’t just go out and hire additional resources, they must find ways to create additional capacity within their department to produce the analysis and insights that their CEOs are demanding.

One way to do this is to leverage tools for data automation to digitise and accelerate tasks that would otherwise rely on spreadsheets and manual effort - i.e. 25% of all effort being done in finance today.

By automating half of the time that staff spend in spreadsheets, a 20 person finance department can effectively generate an additional 100 hours of spare capacity each week:

Finance transformed through data automation

In the example shown above, the 20 person finance department is able to create 2+ additional FTE resources that can be reallocated to analysis and communicating insights with the business.

In conclusion:

  • 30% of CFOs are not meeting their CEOs expectations.
  • The role of the CFO is more important than ever, acting as both a catalyst and navigator for the company, a trusted right-hand to the CFO.
  • Key areas that require the CFOs attention include company transformations, aligning different parts of the business to a unified company strategy and acting as a trusted finance partner to other business leaders like the CIO and CMO.
  • CFOs are expected to grow into this new role whilst still meeting compliance requirements, reporting deadlines, motivating and retaining top staff and turning regulatory burden into a competitive advantage.
  • Old challenges such as disconnected data, manual processes and internal bottlenecks make it hard to find resources to meet new expectations being set for CFOs
  • Tremendous opportunity to leverage data and reporting automation tools to free up capacity to do more analysis and communicate insights with rest of the business.

To learn about the key challenges facing CFOs that want to automate, see our whitepaper here.

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