Historically, CFOs perform operational initiatives that center around the financial aspect of a business. This has often consisted of mainly back-office tasks. However, new studies show a growing need for CFOs to expand beyond the operational aspect of a business to participate in more strategic decisions regarding the organization as a whole.
CFOs are increasingly called upon to partner with the CEO and other executives to help analyze business situations and drive transformation. Unfortunately, due to the rapidly changing expectations of the CFO’s role, many current CFOs are ill-equipped to go beyond the numbers to make strategic decisions regarding organizational innovation and growth. Deloitte recently released a report making the case for “finance business partnering” as a strategy for ensuring that CFOs are effectively supporting and influencing change within their organization.
In order for CFOs to achieve their full potential as a strategic business partner, there are a few prerequisites:
Although the pressure is on the CFO to integrate more closely with the rest of the business, many are too consumed with operational tasks to commit to becoming a true business partner within other areas of the organization. Two-of-three CFOs spend less than 30% of their time partnering with other areas of the business. To make a significant impact as a business partner, CFOs will need to re-prioritize their departments by carefully aligning goals and activities to center around collaboration.
Support Strategic Decisions
The ability to support strategic decision-making is the key to succeeding in a complex, and quickly growing industry. Deloitte’s study shows that while business controllers spend 75% of their time preparing reports, only 25% of the audience finds those reports useful when managing the business. In order for CFOs to effectively assist with better decision-making, they need to provide innovative insights into the organization’s challenges and opportunities.
Break Down System Barriers
62% of organizations identify inadequate data systems as a barrier to business partnering. On average, organizations are using 3-4 different systems for core HR, Finance, and Talent Management functions. With each department working with a different system, everyone ends up working off of separate information. In order to become true partners, departments need to combine cross-departmental information within a unified system that presents a single source of truth for information and analytics.
The modern CFO is an increasingly evolving position that is expected to act within a wide range of roles for the organization. Deloitte’s study concludes that, “CFOs need to address issues related to talent management, business analytics, pricing, and service delivery models.” Transitioning focus from back-office operations to front-office strategy is no easy task and must be executed in an intentional and organized way. An uncoordinated approach to business partnering can lead to employees feeling confused, overworked, and ineffective. However, if successfully achieved, true business partnering can enable all executives to become cross-functional contributors that provide relevant, real-time decision support.