CFOs are facing unprecedented challenges

Business finance is changing. Established companies are under pressure from disruptive new business models, regulations, technologies and a growing responsibility for sustainability. Consequently, CEOs and management boards push hard to adapt their strategy, operating models, investment and teams. This is causing businesses to require more from their CFO teams, including not only increased agility but new analytic and strategic duties.

Clearly, the traditional role of the CFO is changing again. Yet across the field, current approaches are seemingly incapable of meeting these challenges, due to the need to modernize the finance function across the board.

According to the BearingPoint CFO 4.0 European Survey 2019, 53% of organizations are reported to invest most of their resources in Core Finance process, compared to 12% investing further in finance value-added services. A vast majority of respondents report they will spend more (50%) or significantly more (27%) on digital technologies and capabilities in the next three years.

When considering these investments, ‘enhanced business decision support’ is seen as the third most important benefit of technology for finance function (45%), followed by ‘increased process efficiency’ (58%) and ‘better use of high-quality data’ (51%).

Action is proving difficult

As a CFO, you want to meet these challenges, but bold action is being hampered by business reality.

  • Regulation and compliance are radically slowing your decision-making process.
  • Aging staff and a limited, yet highly demanding talent pool are constraining your team’s capabilities.
  • Outmoded ERP and IS systems are making your processes inefficient.
  • Limited financial and human resources are reducing the pace of work and grounding your focus in the day-to-day.

Answers exist, but expectations are high

Thankfully, answers to these challenges exist – they form the CFO 4.0 approach – but with so many issues to consider, every decision requires extensive analysis.

First, solutions need to offer you true value. Your choice must be worth the resources required for a successful implementation.

Visibility is also key. Technologies, their architectures and user experiences need to permit clear and streamlined regulatory compliance and financial control to remove sources of uncertainty.

And most importantly, every solution must be straightforward and scalable enough to not pose an obstacle to M&A activity, new business growth and internationalization.

CFO 4.0 challenges

How to become a Chief Future Officer

CFOs have an ever-growing array of new technologies and processes at their fingertips to transform their work. Usually, first experiences and proofs of concept help individuals better understand the new paradigms and acknowledge the transformation potential. Currently, what matters most is to develop a clear vision for their organization, helping them focus on a selected number of priorities, and invest consistently over time in projects and people.

Let’s make this point very clear: most CFOs don’t currently share a prioritized vision and roadmap with their board or teams. This is identified as the major threat for success in CFO 4.0 digital transformation, with 46% of CFO 4.0 European Survey 2019 respondents mentioning ‘too many priorities’ and 43% a ’lack of clear strategy and vision’. To become a Chief Future Officer, the CFO must develop and explain their vision!

In our experience, implementation must be a considered as step-by-step process, always informed by an encompassing strategy that’s grounded in business’ needs and challenges.

It starts with strong foundations. New data collection and ERP systems that work alongside one another to provide the holy grail: holistic, data-led decision-making that helps produce efficient processes and informs targeted, valuable innovation.

When BearingPoint led a Europe-wide transformation for a global FMCG group this approach was particularly effective. Helping develop new back office platforms for Finance, Supply Chain and Payroll departments, the synchronized and dynamic tools now ensure processes are truly end-to-end and able to help steer performance. Importantly, we also helped the group create the new roles, skills and governance needed to help them use the new systems and achieve their vision. 

From there, you can confidently introduce innovative tools including cloud computing, automated reporting, robotics process automation (RPA) and machine learning. These enable you and your team to do more with less, freeing up resources for more valuable work.

In practice, this means implementing a strong, data-driven culture across teams. For an international airline, BearingPoint used an innovative design and agile program management methodology, working with the customer’s Accounting, Controlling, Tax and Internal Audit teams. We identified 45 potential use cases, then planned and executed seven high-value examples within three months, including supplier referential cleaning, invoice payment block detection, an accounting provisioning model for customer claims and credit card fraud reduction. All had a positive effect and provided the foundations for additional CFO 4.0 use cases.

With the CFO function transformed, so too is your team. Not only are the most talented candidates attracted to what is now an exciting, forward-thinking place to work, but existing team members also benefit from new means of upskilling. The result is a robust and resilient pool of talent you can rely on to develop the future.

CFO 4.0 benefits

Be bold, and you will see the results!

Already, finance organizations are providing positive feedback about the tangible results of their digital investment. In BearingPoint’s CFO 4.0 European Survey 2019, respondents found operating efficiency was the greatest benefit, followed by transparency, security, compliance and customer satisfaction. Business decision support came seventh, showing the additional potential of CFO 4.0 and the need to launch more initiatives in the field.

Get in touch

Schedule a meeting to conduct a CFO 4.0 lab workshop in a location near you to learn more about how our blueprint for success can improve your business’ financial performance, download our free CFO 4.0 study below, or contact us today to find out more.

CFO 4.0: Augmented CFO or Uberized CFO?

CFO 4.0: Augmented CFO or Uberized CFO?

BearingPoint, CDO Alliance and FI+ teamed up and interviewed leaders in the world of finance who were involved in this type of issue to take stock of the current situation, identify real use cases, trends, the best start-ups, and the key factors of successful digital transformation programs.

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