In 2020, Chief Financial Officers had to manage a crisis brought on by a global pandemic that was so unexpected and unpredictable that it did not qualify as a potential business risk, and they were faced with the need to adopt exceptional policies as they focused on reducing business costs and finding the resources necessary to ensure the sustainability and survival of the company.
In addition to the circumstantial management of the crisis, the pandemic has accelerated the evolution of the role of the CFO himself, who has become not only responsible for the areas of administration, finance and control, but is increasingly oriented towards new issues that have become equally strategic, such as digital transformation and green transition.
CFO, between ESG and Digital Transformation
Concerning the issues related to green investments, it is increasingly important for Chief Financial Officers to manage ESG (Environmental, Social and Governance) aspects, issues of growing interest to investors and on which companies must focus most of their efforts to be attractive on the market. These issues need to be addressed by CFOs and their teams by carefully assessing risks and benefits through a proper policy, trying to include these aspects in the investment objectives and decision-making processes by reasoning in a broader strategy consistent with that of the company itself.
In terms of digital transformation, CFOs can play both a strategic role, managing the digital innovation function directly, and indirectly, contributing to the development and promotion of a digital culture.
CFO, the evolution of the role
The role of the CFO is perhaps the one that has evolved most strategically in recent years compared to other corporate functions. In a dynamic and interconnected business environment, the CFO has begun to adapt to the digital evolution by keeping up with technologies such as Artificial Intelligence, Machine Learning, Agumented Analytics using automated processes and real-time insights to make informed, targeted and immediate decisions to ensure a competitive advantage for the company.
In this new role, the CFO must evaluate not only the company’s overall strategy, but also all components of the organization, from sales to IT. To do this he needs to analyze data and provide timely information, support data scientists and chief information officers to improve productivity, and guide the company towards the adoption of new technologies that can optimize processes.
CFO, innovation to support the activities of the financial director
Innovation has now affected most part of CFOs’ activities, and they have found support in technology to carry out their core activities.
Here are some of the most useful software for CFOs:
- AI-based budgeting and cost management tools to improve forecast accuracy;
- Pricing tools that offer the ability to simulate the impact of different pricing scenarios on the financial aspects of the business;
- Robotic process automation (RPA) tools to reduce the time it takes to perform repetitive processes with low business value;
- Data visualization tools to constantly monitor the performance of key business KPIs.
CFOs will have an increasingly strategic and well-rounded role within companies, moving from being mere executors of financial tasks to advocates of change and business success.
With the support of new technologies and the added value offered by Artificial Intelligence, although the complexity of the role and the responsibilities of CFOs have increased, it will be easier to manage and monitor company performance.
