Although CFOs have been gradually taking on more strategic roles at their organizations, they must now take the lead in transforming the decision-making process across the entire business.
And that calls for speed in the finance department. CFOs must gather insight more quickly to keep ahead of customer expectations that are constantly changing. They also need speed to stay ahead of industry disintermediation and to stay ahead of the velocity of data that are generated across the enterprise every day.
“Organizations that embrace a new paradigm of breakthrough speed — with faster, data-driven decisions, better collaboration, and new skill sets — have an opportunity to generate significantly higher value,” according to Accenture.
Effective CFOs understand how important it is to act with speed, which can help them increase revenues and growth.
Accurate Forecasting Is Essential
In today’s volatile business environment, accurate forecasting is vital. That means finance leaders must provide precise forecasts and actionable insights to enable faster and more accurate business decisions.
In an ever-changing technological and regulatory landscape where organizations are subject to increased scrutiny, CFOs are under the gun to deliver more reporting more quickly. To do that, they need advanced analytics and forecasting capabilities.
Having up-to-date and accurate financial records is critical for day-to-day operations and can mean the difference between a company’s success and failure.
Whether a company generates a comprehensive forecast monthly or quarterly, the report must be done accurately and quickly. The C-suite as well as department managers need that projected trend data so they can determine their expected revenues, costs, and operating profits. If a forecast isn’t accurate or created quickly enough, leaders are likely to make business decisions that negatively affect the performance of the business.
Enabling Purposeful Collaboration with C-Suite
Technological advances and the COVID-19 pandemic have played major roles in transforming CFOs from financial managers to strategic C-suite partners.
While the role of the CFO has traditionally focused on reporting, compliance, and managing financial operations, today CFOs must also be communicators and consultants. Using data and analytics CFOs can offer real-time insights into business operations, as well as help determine their organizations’ policies and directions.
As CFOs continue to influence executives’ decision-making and create value across the business, they need insights that detail the “cause-and-effect implications on top- and bottom-line results,” according to Accenture.
To ensure they receive the necessary insights, CFOs must continue to collaborate with the C-suite, which is necessary to “unleash breakthrough speed.” However, CFOs must do more — they must form more purposeful and personal connections to drive value for the business. And that seems to be happening, as 86% of CFOs have increased the “frequency and scope of collaboration across the C-suite,” according to an Accenture study.
Gaining More Sophisticated Insights To Drive Action
To help their organizations grow, CFOs must understand the most critical issues that concern senior business leaders, and tailor their insights to those concerns to help them make productive decisions. Consequently, CFOs need access to real-time financial data so they can provide executives with faster updates. The increased speed of insight also allows CFOs and their financial planning and analysis (FP&A) teams to better support strategic decision-making.
CFOs need all their organizations’ financial data to develop strategies and models for budgets and cash flow, financial planning and analysis, and general forecasting. To make real-time decisions and quickly provide information to the C-suite, the CFO needs access to financial data in real-time.
However, finance systems that produce massive amounts of data – but don’t analyze that data to support decision-making – are ineffective because CFOs and their teams must spend valuable time sorting through the data to glean important business insights.
Since data is power, CFOs must be ready to dive into the details of each business unit to understand the real trends. When they’re able to glean insights from relevant data, CFOs can collaborate with the executives to ensure the business succeeds and grows.
CFOs understand that they must always tell the story behind the numbers and integrate financial and operational data to drive action for the business.
Why Technology Is the Differentiator
“As CFOs continue to take on more responsibility for strategy and execution, and for the sustainable future of the enterprise, they must build technology strength to unleash breakthrough speed,” Accenture noted. “Doing so is the way to drive breakout value across the business.”
To support this changing role of finance, CFOs must upgrade their information systems. However, while enhancing technology helps speed up the financial consolidation and close cycle, it also facilitates the productivity of the finance team.
The primary differentiator for high-performing CFOs who are driving breakout value is the advantage they hold over their competitors in terms of technology, Accenture noted.
The Accenture survey found that in the past few years, these CFOs have vigorously implemented digital technologies throughout the finance function.
“In fact, 60% of traditional finance tasks are now automated, up from 34% in 2018, facilitating tactical benefits around cost efficiencies and improved accuracy of historical reporting,” according to Accenture. “These activities have given CFOs far more than a basic introduction into data-driven transformation. That’s [a] critical experience.”
Additionally, 72% of CFOs said they now have the final say on their organizations’ technology direction, the Accenture survey noted.
To help them handle these new responsibilities, CFOs must implement technology that allows them to get the job done more quickly. This will enable CFOs to operate with “breakthrough speed, driving top-line growth and bottom-line profitability and ultimately unleashing breakout value for their businesses,” according to Accenture.
Cloud-based FP&A software allows CFOs to be more strategic because it streamlines financial reporting, forecasting, planning, and analysis, consolidating all data sources into one source of truth, and providing dynamic reporting and analysis to offer insights into finance, profitability, and more.
The right FP&A tool enables CFOs to get a total picture of the business in real-time and draw insights from the data so they can make fact-based decisions to help their companies become more profitable.