What is the profile of a financial director? How has your role evolved in recent decades? The CFO ( Chief Financial Officer in English) is constantly changing. This is mainly due to the digitization of information systems, automation, and robotization. So much so that the CFO has gone from being a finance manager to having a fundamentally strategic influence on companies.
What is the profile of the financial director?
The different responsibilities of the financial director, their skills, and their contribution to companies have been growing exponentially in the last two decades. The future CFO’s role goes far beyond accounting management and is responsible for administration. Now his role requires a lot of extra knowledge.
Among other things, you must have a global technological and strategic vision. A perspective that includes all levels of an organization. They are in charge of building an integrated roadmap containing decision-making and developing actions to achieve the company’s objectives. In short, a CFO is a critical thinker, a strategist, and a producer of financial insights.
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Here is a summary of the leading roles and responsibilities that tomorrow’s CFO/CFO should have:
Innovation Ambassador
The CFO is an ambassador of innovation within the corporate structure. A successful CFO must be confident in new technology. He must add value to the company through his knowledge of digital tools. And also to include them as a fundamental part of the financial strategy.
Automation, blockchain, and even Artificial Intelligence are already closely linked with financial departments. Therefore, integrating and implementing these new solutions in companies will allow faster and more informed decision-making.
Strategic Mindset
CFOs of the future must expand their traditional competencies beyond financial management. Assume your role in risk management, forecasting, and long-term strategy. In this way, a strategic mentality requires understanding the current situation in which the company finds itself and its environment to develop future plans. In other words, a CFO understands that tomorrow’s success depends on creating the proper financial structure today.
Now, how is that achieved? Fulfilling the role that, in reality, every CFO should have: transforming that knowledge into strategies to increase profits. Of course, without forgetting the increase in sales profitability, the reduction of costs, and the management of capital assets. In this sense, the financial director must work with the general manager to create a viable financial plan. A roadmap that takes the company through future stages of growth while aligning financial objectives with the company’s global goals.
Data-Driven Approach
Another role of a CFO of the future is to have a data-centric mindset and promote the development of a data-driven culture within the finance department itself.
Data analytics plays a crucial role in financial strategy, as comprehensive and constant monitoring of financial metrics is the only way to provide valuable information to the CEO.
For this reason, one of the main requirements of the director of the financial area is to be data-driven; that is, a person who works with the data, explores it, and makes decisions based on it ( data-driven choices).
Risk Management
The massive arrival of new technologies also means greater technical complexity, which leads to more opportunities for finance departments. Seeking data security, gaining greater control over it, and knowing your competitors better will become fundamental requirements, requiring cybersecurity experts and risk management skills to do so. Likewise, one of the duties of the CFOs will be to reduce the risk within the organization, not only at a financial level.
Flexibility
A finance director must have a great capacity to be flexible and adaptable to the changes that appear in the market, especially in an environment as digital as the current one in which everything evolves by leaps and bounds. Thinking strategically implies flexibility and far-sightedness to make difficult decisions that ensure the long-term growth of the company’s financial resources.
Bet on Big Data
Statistics, data, and analytics are becoming increasingly crucial for companies to find new markets and segments or generate revenue and understand, optimize and control expenses. Consequently, it will be necessary for the CFO to bet on Artificial Intelligence and process automation to manage data. In context, in 2018, only 2% of finance departments were willing to use robots to speed up cash generation and improve performance.
Access to quality data is essential, but even more important is that it can be transformed into narratives that spark understanding and draw conclusions.
To achieve good financial decision-making, it will be necessary to have an adequate visualization of the data that will later be transformed into efficient reports and dashboards. The ideal financial dashboard should be simple, easy to understand, and focused on KPIs ( Key Performance Indicators ).
Talent Retention
The CFO will be a crucial person in retaining and acquiring talent. Shortly, skills related to control and transfer of data between departments will be highly valued. Therefore, the financial director must ensure that he is surrounded by “all-terrain” profiles, capable of handling specific business problems and designing strategic plans.
Attentive to new trends
The last essential skill to highlight in the CFO of the future is his ability to adapt to new trends demanded by the market, such as the automation of the reporting system or the implementation of cost reduction programs. All the latest technologies we live within day-to-day translate into new knowledge and evolution of the functions that the CFO of tomorrow must address.
Automation, outsourcing, globalization, internationalization, electronic payments, ecommerce … All these scopes also imply a deep technological knowledge and social and computer skills as added value.
Going back to the question that we posed at the beginning about what the professional profile of the financial director of the future is like, we are talking about a true leader in the organization who manages the financial operations and whose influence goes far beyond his own department, helping the strategic decision-making at all levels and the construction of financial strategies linked to the general long-term objectives of the company.
Having a strategic and data-driven mentality, being flexible when facing changes, or keeping up with new technological trends, are some of the skills that become essential for a successful CFO
Also Read: Review the Security of Your Company
