The finance function has changed dramatically as a result of the financial crisis and technological advances, and CFOs have had to develop from simple bean counters into strategic and operational partners in order to survive. A 2014 Forbes survey of 178 CEOs found that the greatest opportunity for a CFO to impact the value of an organization is by contributing to performance and growth. However, they also reported that CFOs are wasting too much time focusing on regulations and operational aspects, as opposed to providing the sort of strategic thinking that they need to in order to serve as a business partner.
Those in the finance function are perfectly placed to act as strategic architects of the business, and the CFO must use every tool at his disposal to exploit this. They must have a thorough knowledge and understanding of the organisation’s market opportunity, strategy and business model, and offer a unique perspective that applies to all departments. While they of course need to know everything about the finance function, they must understand that they are a business executive first and a finance executive second. Taking the sort of holistic approach to finance that is needed in order to keep costs low and effectively manage risk, on top of offering insights, means collaborating with all other departments, which means developing close relations with all other C-level executives as well as the CEO.
The CFO must also have a good knowledge of the technology that can help them . Technology is helping to automate many of the more technical roles previously required of them, freeing them up to think strategically, and the modern CFO must understand how to harness them to their full potential. In a sense, they are taking over a number of responsibilities that were once the preserve of the CIO. Thirty-nine percent of respondents to the 2013 Gartner FEI CFO Technology Study said that IT organizations now reported to the CFO, and their influence over the department was found to have gone up 44% since 2010/2011. As such, they should have the necessary knowledge. A close relationship with the CIO, in which skill sets are shared.
They need to understand the new risks they face, such as hackers, and appreciate the kind of negative impact they can have on the company as a whole, not just in monetary terms but also reputation. They must understand the commercial side of the business as much as the financial. To be who the CEO needs them to be - almost a second line of defence - the CFO must be independent, honest, and reliable, and they must be open and transparent in their operations.