The CFO always took care of books and records, financial reporting, and statutory compliance. But digitisation has, by and large automated these functions. Any concerned stakeholder can get the latest financial reports at the click of a button. Compliance also takes place on auto-pilot. In such a state of affairs, how can CFOs justify their huge salaries and emoluments? 

CFOs who do not move beyond traditional financial roles struggle to remain relevant. Unless they add value to the enterprise, they will soon become redundant. 

In a recent KPMG survey, The View from the Top, one in three CEOs worry that their CFOs remain unprepared for the challenges ahead.

Here are the ways CFOs can move beyond finance and add value to their enterprises.

1. Going beyond traditional job descriptions

The role of the CFO is changing from being primarily compliance-driven to advisory-based. Digitisation has more-or-less automated compliance. 

Before the digital age, CFOs spent much time collecting data and creating reports. Their core activity involved grappling with information and managing budgeting. They prepared income statements, cash flows, and balance sheets and handled compliance. All these tasks now take place at the click of a button. CEOs and other decision-makers get information at their fingertips. They now expect CFOs to provide value-added insights instead of mere reports. 

Forward-thinking CFOs crunch data and provide insight into what would or could happen in the future. For instance, they advise the board on the financial perspective of any proposal. 

Effective CFOs:

• Drill down the financial jargon and clarify the company’s net income, capital structure, and dividend policy. Decision-makers need such basic data to make informed decisions and recalibrate strategies. 
• Expand their role. Apart from their traditional roles, they add value by involving in tax strategy and succession planning. They also provide internal analytics and support to functional departments. These functional departments get access to timely, accurate data. Such insights ground business decisions in solid financial criteria.
• Develop robust risk management and cyber security frameworks to safeguard sensitive data.

2. Contribute to operational and strategic decision making

CFOs add value by leveraging financial data to influence operational and strategic decision-making. The CFO, by handling enterprise-wide finances, has first-hand access to data and insights on the state of each department and work team. They can learn such insights to advise the CEO on creating sustainable growth strategies. 

But in the KPMG survey, 45% of CEOs regarded their CFOs as lacking commercial or non-financial experience. And 41% of the CEOs believed their CFOs lacked the necessary leadership skills.

CFOs add value to their enterprise by:

• Correlating the company’s business models and plans to enterprise finances. Successful CFOs understand the industry, market dynamics, and the business landscape. They stay updated on the trends, technological advancements, and regulatory changes. Such understanding offers the big picture. They can interpret financial numbers in the context of their business and the wider business environment. Their deep insights contribute to more effective strategic decision-making.
• Measuring the underlying business drivers that impact finances. Smart CFOs also develop additional metrics for enhanced perspectives. For instance, the CFO establishes metrics to measure the time value of money. Such metrics analyse if work teams spend their time profitably and the opportunity cost of each investment. 
• Promote customer-centric metrics to create long-term sustainable value. They do not base decisions on a binary pane of process efficiency or cost-effectiveness.
• Expanding their traditional roles to co-opt forecasting and predictive analysis. Smart CFOs provide strategic recommendations, scenario analysis, and risk assessments. Such insights enable informed decisions that drive growth and mitigate risks.

3. Foster innovation and technology adoption

Digital transformation is indispensable for breaking free from the shackles of legacy technology. But most enterprises struggle with digital transformation. 

The CFO, who knows the financial innards of the enterprise, is in an ideal position to lead the digital transformation initiatives. 

CFOs could promote innovation and add value to the digital transformation process by:

• Collaborate with CIO, CXO and CEO to align technology investments and digital strategy with the financial goals.
• Prioritise digital transformation initiatives based on cost-benefit analysis, ROI, risk, and strategic value. The CFO can define objectives, timelines, and milestones for each initiative. 
• Allocate resources strategically to execute the digital transformation roadmap. They could also review automation and analytics tools, especially from a cost-benefit perspective.
• Implement new data visualisation techniques to provide real-time insights to stakeholders.
• Explore strategic partnerships with technology providers and other organisations to support digital transformation.

4. Work with HR.

The role of finance and human resources has become more intervening than ever before. With technology as a level-playing field, people make a difference in the competitiveness of any enterprise. Hiring and retaining talent has become a strategic function of the enterprise. Smart CFOs work with the HR team to strategise recruitment and retention from a cost-benefit perspective.

CFOs add value to the HR process by:

• Shed light on the financial implications of workforce planning, recruitment, and right-sizing.
• Make a cost-benefit analysis of training interventions. 
• Providing financial inputs to design incentive systems that motivate the workforce. 

5. Strengthen leadership skills

Successful CFOs possess strong leadership skills. They make conscious efforts to inspire and motivate teams and foster collaboration. They apply their communication and negotiation skills to influence stakeholders. Of late, the changing way of doing business forces a re-look at the leadership skills of the CFOs.

CFOs can add value in today’s business context by:

• Orchestrating exit strategies. In today’s fast-paced business environment, exiting from an investment or situation is as important as starting a new venture. CFOs can add value by tracking assets in real-time and establishing exit goals, and executing exit plans when needed.
• Identifying companies for acquisition or merger or working with the company taking over their enterprise. CFOs become strategic advisors and resource persons to execute the process. They apply leadership for due diligence, integrating disparate accounting systems, and compliance. 

Becoming a value-added CFO is a continuous journey. It requires financial expertise, business acumen, leadership skills, and a strategic mindset. But above all, successful CEOs need effective time management. Tools such as Workday finance systems automate the financial process. It also applies machine learning to detect anomalies, improve compliance, and reduce friction. The intelligent systems centralise data accessibility and offer deep insights. These tools take care of the nitty-gritty and allow the CFOs to spend more time on value-adding tasks.

CFOs who expand their role beyond finance and contribute to enterprise success become valuable assets. They also remain in great demand, and their career graphs soar.