Through the consistent use of data analytics, corporate CFOs have gained significant influence.
CFOs have not only become more visible in their role as a result of digitization, but they have also become more reliable and trustworthy in terms of their internal advisory function. In particular, thanks to the capabilities offered by intelligent data analysis techniques, they can access financial data that is many times more accurate than it was ten or 20 years ago. This enables them to support management in important decisions, plan ahead and respond quickly to changes. Their influence in companies is greater than ever.
The role of the Chief Financial Officer (CFO) has changed significantly in recent years. In the digital age, CFOs no longer rely solely on numbers, but also technology when analyzing their companies’ challenges and opportunities. Likewise, rather than relying solely on historical financial data, they can use real-time data analysis and predictive methods to create more accurate future calculations and forecasts than they used to be. This enables forward-looking planning processes – a valuable tool, especially in the face of growing turbulence and rapidly changing customer expectations. Therefore, CFOs who act and make decisions based on data have a significant impact on the strategic decision-making of their companies. In many places, data-driven CFOs are in an entirely new position: their role is changing from being a pure “personality resource” to being a strategic sparring partner to the CEO, with whom he works on an equal footing and ideally, a “tandem” Central to the company’s senior management.
CFOs in the digital age are also more present and visible in the company. They are in constant, direct contact with the rest of the teams in their company – from sales and customer service to marketing and human resources. This allows them to have a better understanding of the business areas and technologies that must be invested in to keep the business fit for the future. Using connected platforms and applications, they determine the financial performance of any given business function in order to assess the challenges and opportunities involved both retrospectively and prospectively.
Informed decisions, the driving force of innovation
Particularly solid insights can be obtained with the help of Artificial Intelligence (AI) and Machine Learning (ML) for forecasting, project planning and future planning. As these are self-learning systems, which also take the knowledge gained from previous analyzes into account in subsequent assessments and adjust or correct if necessary, the results become more and more accurate over time, as the available database is constantly growing. In addition, the topic of analytics is no longer just purely financial data, but information aggregated from the entire company, which was pulled together from different systems.
This results in a robust database that helps implement changes quickly and efficiently across multiple business areas. However, the prerequisite is that the entire workforce supports the planned changes. As one of the drivers of innovation in the company and as responsible managers, CFOs must not only monitor pure finances but also ensure that all employees can understand the factors that drive desired change and how they lead to success.
Even in the event of unexpected changes – keyword: crisis management – CFOs can respond quickly with the help of AI-powered forecasts and strategies, which also take into account contingencies, thus providing important support to the top management. At the same time, it is possible to use guiding planning models to protect the company from the recurrence of undesirable situations.
yEssica Classen, CFO, Central Europe, Sage, comments: “Today, the CFO is at the heart of the company – literally and figuratively. Thanks to digital technologies, they can make informed decisions about strategies and policies for the entire organization. A CFO who takes advantage of new opportunities can see from the past to the present to the future. This gives them a comprehensive picture. About their company – a critical prerequisite for the ability to achieve even ambitious goals.