The CFO becomes a data steward

The role of the CFO is changing

Close coordination between the finance and IT departments is crucial to the company's success. The CFO's role is changing, because for a long time now his position in the company has not just been about presenting the status quo - it is more about supporting future management decisions. To do this, the CFO should be empowered to provide the CEO with the information needed to make directional decisions. But the reality is different, the necessary conditions have not yet been created in many companies.

A recent survey of 1060 senior finance and IT executives shows that finance leaders in Germany struggle to access data they need to make accurate forecasts and informed decisions. Just over half of respondents say they still make decisions based on gut instinct, despite having data available, because the data is not readily available, isolated or not in the right format. Only eleven percent of companies in EMEA say that finance and IT are always aligned and regularly collaborate to make the digital transformation of finance a success. 

So, in order to be able to support operational decisions in an even more targeted manner as a strategic partner for management, two developments are important in companies: firstly, networking of the finance department within the entire company and, secondly, the CFO needs direct access to all relevant data. Through close cooperation between the finance and IT departments and using sustainable innovations. Data forms an important basis for this - and not only that from finance, but also from other departments such as human resources or sales. Not to be forgotten is the issue of sustainability. Companies must position themselves accordingly in order to meet and report ESG (environmental, social, governance) criteria. In the future, this corresponding information will flow into the annual report and be relevant for the CFO to fulfill his new strategic role as a data steward. 

Data understanding is essential

For example, IT can support the finance department by providing systems that are easy to use and administer - such as the use of cloud solutions. These are preconfigured, do not require their own infrastructure in the data center and can be easily maintained by the specialist department. In addition, the cloud provides the necessary computing power for solutions that work with artificial intelligence. Machine learning (ML), on the other hand, can be used to automate the evaluation of data. But here, too, everything depends on the quality of the data. After all, the algorithm only works as well as the data with which it is trained allows. In other words, without data in sufficient quantity and quality, the smartest technology is of no use. Those CFOs who can provide the right, high-quality data make an important contribution to the digitization of their company.

At the same time, the demands on the CFO's skills are increasing. In the future, they will need a greater understanding of data because, as data stewards, they will need an overview of all relevant data, be responsible for its quality and bring it together - an area of work that has so far been dominated by the CIO. This requires technical expertise, a good relationship with IT and systems that are easy to operate.