How can CFOs balance competing demands to drive future success? How can CFOs balance competing demands to drive future success?

By George Deegan

EY Ireland Assurance Partner

Proven abilities in financial reporting, accounting and internal controls

4 minute read 10 Sep 2020

As we begin to emerge cautiously from the pain and disruption of recent times, finance leaders must look to the future and determine how best they can lead recovery.

There is no doubt that collectively this is one of the most challenging business environments ever faced. For CFOs, there are several competing demands that have increased the complexity, not least, the need for immediate stabilisation and the need to thrive into the future.

The need to protect value today and drive growth is an exciting challenge for finance leaders, but one they must strike a careful balance to meet. In this article, I will discuss those competing demands and the key responsibilities of the CFO role today.

The pace of change in the CFO role has not let up. The transformation of the CFO role is accelerating as it is disrupted by a range of forces: digital acceleration, volatility and intense scrutiny.

Finance leaders must consider their future operating model and embrace the notion that it will continually evolve. As their organisation’s strategic priorities will shift rapidly, finance leaders must have the agility to change with them.

The accelerated pace of technological change has had a profound impact on the evolution of the CFO role. With volatile markets and the rapid advance of technology, not to mention new market entrants, it’s imperative that finance knows how to transform into a data-driven, smart function that makes better decisions.

For CFOs the key battleground is leading the transformation that ensues from technological innovation. A very large part of that is anticipating how the next wave of technology will transform the way finance adds value and create the conditions for the function to innovate in what can be a risk-averse culture.

COVID-19 is forcing a rethink of business-as-usual activities with remote working a central component for many organisations. These new technology-enabled ways of working bring both opportunities and risk for companies. Important lessons have been learned in our response to this crisis that can be ‘bottled’ for the ongoing transformation drive.

The ability to transform into the future will depend on the ability to maximise new and emerging technologies, while also leading on ethics, trust and transparency in the digital age.

Building trust in data analytics and emerging technologies like Robotic Process Automation, Blockchain and AI is critical to building tomorrows digitally enabled and talent-rich finance function. The key challenge for the CFO is finding the balance between technology and people.

CFO agenda

Finance leaders have a key role to play in the way they shape and develop their team. To attract and retain top talent, it is important to focus on engendering an open culture where innovation thrives. To succeed in the future, finance teams must blend tech-focused skill sets with broader finance experience, including treasury, tax and transactions. Many CFOs feel they are still particularly renowned for being cost-focused and risk adverse at a time when they need be tech savvy and future-focused.

With the acceleration of digital, CFOs are increasingly involved in tech-focused ecosystem development as organisations look to drive growth, long-term value and business model innovation.

In response to the current environment, the workplace is now more digital, more flexible and far less hierarchical because structure, governance, employment models and reward approaches must adapt to survive. More agile approaches will facilitate greater productivity, flexibility and resilience as operating models and customer expectations undergo rapid shift.

There can be little doubt that the finance leader of today is under pressure to reinvent the way their function operates. One of the main reasons is that CFOs are being asked to cut costs and do better with less, during a time of significant change.

The balancing act that CFOs face today is making decisions about technology, people and processes, that are aligned to meet competing demands and position their functions for future success. Delivering the future finance function will demand a major purpose-led culture shift.

The CFO agenda is being driven by the need to evolve business strategy and create long-term stakeholder value while managing costs, all at the same time. In response to change and the need to deliver long-term value, the nature of the CFO role and demands on finance leaders are growing.

By making decisions about technology, people and processes, the role of a finance leader is increasingly evolving to become more of a strategic adviser. Yet, CFOs still find themselves directly involved in a range of traditional responsibilities, which must be balanced against the demands of new areas and expectations.

How will you strike the right balance? Over the coming months, we will be examining the evolving role of the finance leader and how CFOs can balance the competing priorities of today. 

The CFO agenda

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Summary

The CFO agenda is being driven by the need to evolve business strategy and create long-term stakeholder value while managing costs, all at the same time.

About this article

By George Deegan

EY Ireland Assurance Partner

Proven abilities in financial reporting, accounting and internal controls