CFO Role Evolves From Tightening the Purse Strings to Data-Driven Decision-Maker

The modern CFO is no longer just a financial gatekeeper. 

They are financial goal-scorer, expected to be a strategic partner to the CEO and other C-suite executives, helping to drive the company’s growth and profitability.

“The digital adoption has quite a bit of impact on the finance department,” Manish Jaiswal, chief product and technology officer at Corcentric, tells PYMNTS.

No longer confined to traditional financial responsibilities, the CFO is now playing a crucial role in technology enablement and digital transformation, a shift driven by the need for organizations to leverage innovations to stay competitive.

And as CFOs become more involved in rolling out digital tools and strategies, they are not only providing financial insights but also actively contributing to the overall business strategy.

“Digital adoption has created a massive influx of data which was not previously there, which has helped not only give a greater advantage to [CFOs] during financial planning and budget forecasting, but also provided them more real-time visibility around other departments to help the other business stakeholders make very informed decisions,” Jaiswal explains. 

CFOs Contribute to Strategy

CFOs have taken a active role, especially in forming business strategies and making them happen within the organization.

By investing in digital tools, and then leveraging those benefits, finance teams are helping drive enterprise evolutions and business growth.

“Having real-time visibility helps finance leaders to carve out business scenarios, play out the forecasting, and then adapt on a real-time basis to pivot strategies based on visibility into cash flow and how the revenue is coming in,” Jaiswal says. “These technology accelerations have helped organizations a lot.”

After all, access to critical information that can power informed financial planning and decision-making represents a change-the-game differentiator for savvy finance departments.

But beyond pandemic-driven digital transformations, the changing realities of today’s business landscape also bring a set of challenges for CFOs — particularly around the new normal of hybrid and remote work.

That’s because the influx and real-time sharing of sensitive data is a double-edged sword.

“It’s changed the overall landscape, particularly as employees remotely interact with critical parts of the business — it’s imperative to increase focus on security, and CFOs need to ensure that they’re investing in solutions where the cybersecurity and access protocols are airtight,” Jaiswal says. “You need to ensure you’re not exposing yourself as an organization as a result of this new environment.

“How to manage vendors, and ensure security around those relationships, has also been a real shift in the business,” he adds. “CFOs should now see their suppliers more strategically.”

Cross-Departmental Communication

As the CFO’s role continues to evolve, it is clear that the digital era has brought about a fundamental shift in their responsibilities. From technology enablement and digital transformation to sustainability and regulatory compliance, the CFO is now a strategic partner in driving organizational success.

“Speaking internally to the transformation of our own CFO, there’s been a big impact of data-led CFO-driven cross-departmental communication that enables us now to get more visibility into how to make better decisions, how to pivot if we need to make a change – and it’s helped us run the organization more effectively and efficiently by giving us a bigger view end to end, versus one that was very focused on individual departments,” Jaiswal explains.

“The big message is resiliency and agility. … We now have a finger on the pulse of the business across the board rather than just thinking about our own groups in silos,” he says.

That’s because rather than focusing solely on the day-to-day and getting tied up in manual data entry or invoice processing or collections, digital solutions are freeing up finance teams’ time and allowing them to focus on more high-level strategic work.

“The CFO is becoming less of the controller and more of the corporate architect, looking at the data coming in and emphasizing what the goals are for the business, how the revenue impacts those, and what can be done on the finance side,” Jaiswal says. 

“These tools are bringing in the information, and the new level of cross-departmental communication is letting leaders apply it to ongoing business strategies and goals,” he adds. “If you think about it, today’s CFO really understands every aspect of the business — they have unparalleled visibility into all the operating aspects.” 

By embracing data-driven decision-making and fostering collaboration, today’s CFOs are poised to lead not just their finance teams but also their organizations with confidence and agility.