The role of the CFO function has been rapidly evolving in the past years. While the CFO function still has an important role in fulfilling the statutory compliance tasks, reporting and record keeping, its role has shifted more towards business partnering and transformation. In this new role, the CFO function utilizes increasingly the understanding of its financial position to help execute and direct the whole organization’s strategy, improve its competitive position, and enable growth. 

This blog is the third part of the data-driven finance and technology blog series and focuses on how the finance function can create strategic value to the company

To move beyond the traditional role of the CFO function - the guardian of the financial record - to the strategic advisor and planner for CEO and top management team most finance organizations should consider to:

  • Identify trends and related drivers impacting the business  
  • Create a process around monitoring business drivers
  • Plan and act with agility & speed

The global market has become more volatile, uncertain, complex, and ambiguous (VUCA). Recently the pandemic, the crisis in Ukraine and the raising inflation rates have had significant and sudden impacts on the business environments of all companies. Many finance organizations have failed to capture the signals of upcoming disruptions early enough to proactively manage financial risks associated to the external events. One reason for this failure to predict major events is the concentration of efforts to the latest quarter and upcoming quarter. Broadening the scope and length of plans would make many of the finance functions more resilient and future ready. One way to broaden the planning scope is to apply some practices from strategic foresight to the planning process. Strategic foresight aims to envision multiple futures that can help companies adapt to change, instead of trying to predict the future. When applying these practices, the first step is to create an understanding on the underlying drivers of future change through techniques such as horizon scanning. By analyzing these drivers of change, organizations will be better positioned to realize opportunities, foresee risks, and allocate resources accordingly.

Once a company has identified the trends that are relevant for the industry and business, the next step is to link the trends with more concrete, usually quantitative, drivers and assess what would be the anticipated impact on the business, given the driver advances rapidly, slowly or changes the direction. To ensure that the insights from the analysis are truly embedded in the forecasting and risk management, it is recommended that a process is established for regular monitoring. There are various options to leverage technology in the monitoring, depending on the nature of the use case. For example, industry monitors and econometric datasets can be integrated through an API to existing business intelligence dashboards or planning tools. The datasets of the drivers should also be ideally connected to other planning systems used in the company, e.g. financial forecasting platforms.

After exploring different drivers, scenarios and relevant business implications, the next step is to move the gained insights into action. To create a competitive advantage in this relentlessly changing environment, the company must make this observation-decision-execution loop faster than others. The responsibility of the execution can often lay outside the finance function, however, the finance function is often the one responsible for generation of insight and communication. Therefore, speed and visibility are essential for a planning process that adds strategic value. Long budgeting cycles and siloed planning functions are no longer fit for a world with this rate of change. Instead, planning needs to be done on a real-time basis, with decisions guided by a shared view of threats and opportunities

Fast planning and decision-making cycles cannot be built on disconnected spreadsheets. However, most organizations still use point-solutions for planning purposes, separate applications for separate business functions. Disconnection between the solutions makes cross-function planning slow and difficult. The lack of transparency, reliability and flexibility is also a common problem with this approach. To add speed and visibility to the planning cycle, many companies are considering moving from siloed solutions to a cloud-based connected planning platform. Such technology platforms have rapidly evolved in the last decade, finally delivering on promises made by the industry for decades about integrated planning ecosystems.


Heli Moilanen
Director, Finance & Risk
BearingPoint Finland

Joona Ronkainen
Senior Business Consultant, Enterprise Performance Management
BearingPoint Finland