The number of CFOs stepping into CEO roles has risen by 45% in the past decade, according to the Financial Times. This trend suggests the expanding role of CFOs. They are now expected to focus more on enhancing shareholder value rather than just protecting it. This requires them to adopt a holistic, strategic perspective across the business to achieve a strategic advantage.
However, many CFOs find themselves consumed by the day-to-day operations of finance, leaving little room to focus on value creation. To foster growth, CFOs must streamline processes, making work faster, more efficient, and effective.
Empowering teams to accelerate results is crucial. CFOs need to make informed decisions and provide clear strategic guidance to boost business. They must ensure agility in the face of change. Achieving this balance requires managing costs and maintaining compliance.
Key Takeaways
- The number of CFOs stepping into CEO roles has increased by 45%, reflecting their expanding responsibilities towards shareholder value.
- CFOs must focus on process simplification and integrated technology to boost efficiency and support growth initiatives.
- AI and ML can transform finance operations, enabling strategic insight and proactive decision-making, and enhancing data integration.
- CFOs should leverage predictive analytics for forward-looking insights and scenario modeling to improve strategic advantage.
- Empowering teams to utilize AI not only improves processes but also prepares organizations for future challenges and opportunities.
The Power of Integrated Technology and Process Simplification
To meet these demands, CFOs need integrated technology and simplified processes. However, business complexities often delay progress. Many organizations rely on multiple platforms alongside their Enterprise Resource Planning (ERP) system. Unfortunately, ERP rarely serves as the single source of truth. To acquire a unified, 360-degree view, breaking down system silos and embracing an integrated approach is key.
For example, CFOs are currently looking to streamline core Finance and Accounting (F&A) processes. This includes Order-to-Cash, Record-to-Report, and Source-to-Pay. Modern Order-to-Cash software enables this transformation. The software connects every stage of the revenue cycle, from invoicing to collections, into one intelligent, automated flow. Hyperautomation, a modular approach to digital transformation, can be employed to fully integrate processes both upstream and downstream across multiple systems. This seamless integration accelerates operations while reducing the risk of errors. To support these efforts, companies can leverage value creation services. These services are designed to identify efficiencies, optimize financial strategies, and drive sustainable business growth.
Leveraging AI to Enhance Operations and Insights
Artificial Intelligence (AI) offers the potential to free finance teams from routine tasks. It aims to provide deeper insights rather than replacing jobs.
AI minimizes the need for manually connecting data into meaningful sequences. Meanwhile, Machine Learning (ML) drives continuous process improvement. CFOs can also benefit from re-imagining the Order-to-Cash process as a more holistic Quote-to-Sustain model. They can leverage data, analytics, and intelligent automation to manage the entire lifecycle. This includes quotation through contracting, credit management, order fulfilment, billing, receivables, and sustaining revenue.
By integrating finance systems before orders are made, CFOs can play a more proactive role in root cause analysis and problem-solving. Meanwhile, AI-driven automation enables the free flow of data through systems and departments. This allows for real-time credit management, better master data integration, accelerated collections, improved liquidity, and more precise forecasting.
AI and ML can also be tailored to company-specific policies. This improves everything from International Financial Reporting Standards (IFRS) compliance to meeting customer payment preferences and increasing straight-through processing.
AI as an Efficiency and Growth Catalyst for Strategic Advantage
CFOs and their teams can leverage AI to quickly extract, classify, and match data from multiple sources and formats faster. With advanced analytics, AI can detect patterns, identify anomalies, and ensure data accuracy. This reduces escalations, errors, and even fraud, while improving cash flow, minimizing revenue dilution, and lowering credit risks.
User-friendly dashboards on familiar systems can provide teams with unified, real-time access to journal entry summaries. Generative AI enhances this by delivering precise answers to complex questions. It turns data into actionable insights for a wide range of employees, not just data specialists.
A Future-Forward CFO with Real-Time Insights
Reporting may always remain essential to the finance function. However, CFOs must shift from retrospective to forward-looking data. According to Gartner, over half (54%) of finance organizations find it a challenge to provide stakeholders with reliable data and reports. Traditional reporting, by its nature, is backward-looking. What CFOs need instead is access to real-time data insights.
Predictive analytics can leverage real-time data for more accurate forecasting and opportunity/risk identification. With AI, CFOs can model potential scenarios — such as raw material price increases or interest rate fluctuations — and assess the impact of different actions on profitability. Continuous ML enhancements further improve the accuracy of these models.
CFOs must also prepare their teams for the future. As economist Richard Baldwin stated at the 2022 World Economic Forum, “It’s not AI that is going to take your job, but someone who knows how to use AI might.” That is why CFOs need to think of emerging technologies not as threats. Instead, they should perceive them as exciting new opportunities for strategic advantage for themselves and their teams.
