Topics: Finance and Accounting Transformation

Top CFO Priorities in 2020

Posted on February 28, 2020
Written By QX Global Group

Top CFO Priorities in 2020

A lot is expected of finance leaders today. CFOs and FDs are expected not only to take care of the finance & accounts functions, but also help transform the business and shape future strategy. So it is no surprise that the priorities of the CFOs of 2020 are different than they were a few years ago.

Not seen as just financial leaders, they are regarded as strategic enablers, business transformers, and disruptive innovators. Many CFOs today are driving force behind all business operations, overseeing technological transformation, growth via mergers and acquisitions, change management and offshoring/outsourcing initiatives.

Frequently, the finance department engages with executives and managers of all the divisions of the enterprise to identify and understand critical business metrics, gauge performance, generate actionable insights from data, and help make value-enhancing decisions with an aim to close potential gaps and achieve sustainable business growth.

Against this background, the CFO priorities in 2020 are:

  • Lead digitalisation & automation efforts across the organisation
  • Use data to drive actionable decisions
  • Manage offshoring/outsourcing initiatives
  • Develop future finance talent

Let’s take a close look at each of these:

1. Drive strategic technological projects

Over the last decade, the use and impact of digital technology has and it is fast becoming an integral part of the business landscape. Businesses that are able to implement the right technology will thrive and replace businesses that are not able to achieve this core goal. By shifting from traditional processes built on manual actions to more standardised automated processes, organisations can:

  • Generate useful data to gain essential operational insights
  • Mitigate human participation and automate repetitive routine tasks
  • Streamline and standardise processes
  • Reduce cycle times
  • Boost self-service
  • Deliver personalised and scalable services

While CIOs and CTOs are tasked with the actual implementation, companies expect their CFOs to lead strategic efforts to bring about technology transformation into their business and ensure that their organisation pivots successfully to a new data-driven, technology-advanced mode of operating.

However, it’s important to note that technology won’t guarantee improvement. CFOs need to craft clear and measurable time-defined goals to ensure that integrated tech is used to its full potential. It’s more important than ever before for CFOs to collaborate with CIOs to align IT investment and build strategic growth plans leveraging technology. The CIOs, after all, follow a similar mandate of ensuring that business operations run optimally while planning future optimisation strategies. Finance leaders often help to:

  • Identify critical business processes that can be scaled up through future IT investments
  • Gauge the impact and role of technology on the company’s growth strategy
  • Identify, plan, and invest in setting up security measures to protect core digital assets from cyber attack

As the daily low-value tasks get automated, the CFO can focus on bringing in digital transformations, and analyse resulting data to improve business performance and capitalise on new growth opportunities.

2. Facilitate smarter business decisions by transforming data into actionable insights

Data has always been one of the driving factors for businesses success. However, the increased use of digital technology and advanced analytics platforms have empowered businesses to generate useful data in abundance. This data, used rightly, can yield insights that can inform critical business decisions, helping organisations to:

  • Redefine KPIs
  • Incorporate predictive analytics within operations to forecast and, mitigate and manage risks
  • Continually optimise the organisation’s strategy
  • Drive ‘big decisions’ and improve performance

One of the primary responsibilities of the CFOs in 2020, oftentimes second-in-command to the CEOs, is to provide strategic advice. To advise, they need adequate streamlined data to analyse and plan. CFOs can help organisations improve data gathering processes, advice on what data to gather, and also help provide strategic advice based on analysis of the data.

CFOs that are able to marry their existing skills with an understanding of the new technology available in the market will not only be able get real-time business insights and develop better forecasts, but will also be able to arm their CEOs with key insights for taking decisions that help improve efficiency, reduce costs and build effective strategic partnerships.

Since they are now primed to grow their influence outside the core finance function, it would make sense that they access and use data to drive operational decisions and bring efficiency across all units of the business.

The finance executives are sharp as a tack when it comes to analysing and understanding large quantities of data. Their financial know-how, in-depth knowledge of data, and strategic approach towards long-term growth can help businesses thrive in this ever-changing landscape.

3. Leverage offshoring/outsourcing to optimise operations

Outsourcing has grown exponentially over the last two decades. According to Statista, the global market size of outsourcing services has risen from US$45.6 billion in 2000 to US$92.5 billion in 2019.

Operational efficiency, centralisation of operations and cost reductions are the obvious benefits that companies expect to reap from outsourcing activities, whether on-shore, near shore or offshoring. CFOs and FDs often choose finance & accounting outsourcing companies for transactional and low-value repetitive tasks to focus more on fulfilling core strategic tasks. As the sector has matured over the years, some pioneering companies are using offshore F&A service companies as partners in transforming and optimizing their F&A operations.

Additionally, CFOs are expected to play a leading role in helping the business identify opportunities for outsourcing or offshoring activities across departments. A KPMG report predicts that offshoring practice will see further increase in 2020, with more services sourced from across the globe. The same report also states that new offshore roles will come into play, and key finance experts will engage with remote personnel to get transactional work done.

4. Recruit, retain and train talent

9 out of 10 finance leaders find it challenging to find accounting talent, according to a Robert Half survey. As the labour market in the UK gets tighter and the competition for accounting talent increases, it is getting tougher for CFOs to find the right kind of talent. At the same time, the demand is high for accountants who possess the ability to leverage modern software and technology to streamline and automate accounting activities.

Increased offshoring and automation practice takes away the routine transactional responsibilities from the junior finance professionals. These finance tasks earlier served as an ideal training ground for these professionals. It’s also important to note that the focus for finance leaders and managers has shifted towards governance and management.

In this scenario, training and empowering colleagues to leverage digitalisation and enhance self-service across different levels of the organisation is now one of the most important priorities for the CFOs today.

Closing thoughts

2020 is a pivotal year for CFOs. The commitment they show to these priorities could potentially define their success and propel their business forward with sustainable growth over the next decade.

Originally published Feb 28, 2020 12:02:16, updated Jan 29 2024

Topics: Finance and Accounting Transformation

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