UPDATED 10:54 EDT / SEPTEMBER 23 2013

How CFOs are Evolving into Data-Driven Roles + Making Friends with CIOs

Gone are the days when Chief Financial Officers only deal with the money side of the business.  Now, their influence is growing and they are becoming more and more important in making decisions, not only those that involve the use of money, but are now considered as corporate catalysts taking a lead role in a company’s strategic decision-making process.

According to a “CFO as Corporate Catalyst” infographic based on the recently published report by Longitude Research commissioned by Oracle and Accenture, over the past three years, 70 percent of CFOs have shown significant influence in business transformation and setting strategies.  The reason behind the CFO’s reach in other business matters is that they are finding more cooperation with their CIOs, Big Data and analytics are driving competitive advantage, and access to better information boosts their agility.

Still, there are some hindrances that CFOs face, prohibiting them from taking on a bigger role.  These obstacles include the CFO’s current economic environment, skill gaps in the finance organization, and lack of time.  So how can CFOs start stepping up to the plate and apply their skills to help their company move forward?

How to be a better CFO

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Get with the program

The CFO is usually the go-to-guy for IT, since they’re in charge of financial risk planning, and record-keeping.  The problem is, some CFOs don’t know half of the things IT administrators talk about.  So in order for CFOs to better plan the right strategy, to reduce cost, and keep track of what the IT department is doing, they need to learn, or at least understand what’s happening.

Comprehending the concepts behind IT lingo like virtualization, cloud computing, scalability, servers, flash, could help the CFO in driving the company in the right direction.  They can sit down with a member or two from the IT department for a tutorial of sorts, to understand why the budget for certain items can or cannot be reduced, why the company needs certain purchases, and why the company can do without some things.  It can be a daunting task, but it’s well worth the effort.

Source: “CFO as Corporate Catalyst” infographic

Communication

The executives of a company should be able to communicate with one another openly.  As stated above, IT administrators often report to the CFO, but according to Mike Scarpelli, CFO of ServiceNow, IT should be able to communicate and get feedback from all the executives in the company -VP of sales, support, engineering, etc.

Why?  Because it ,opens up a way for teams to better collaborate and keeps leaders in the loop.  Great ideas, and even solutions to problems, sometimes come from the least expected places.

Be more flexible

McKinsey & Company categorized CFOs into four categories: the finance expert who has rotated through various roles in controlling, treasury, audit, financial planning and analysis, or business unit finance and focuses on standardization and compliance; the generalist who likely has an MBA rather than an accounting degree and is more likely to back virtualization trends; the performance leader who focuses on cost management, metrics, and the standardization of systems; and the growth leader who is often a former investment banker, consultant or private equity professional brought into industries facing constant disruption and M&A activity, and thinks that systems should work –  no ifs, ands or buts.

If you’re a CFO, it would do you good to fall into any of the categories, leveraging your own niche.  But it would be better if you could be flexible enough to have the characteristics of two or more of the other categories.  This way, you’ll have more input regarding the company’s needs, be able to better communicate those needs across the organization, and truly demonstrate the value of your position.


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