In the future, the role of the chief financial officer (CFO) is likely to change and expand. This is the conclusion of a joint study recently performed by the auditing and consulting firm PwC and WHU – Otto Beisheim School of Management. The duties of CFOs, which are currently more administrative and regulatory in nature, will probably evolve into more value-creating tasks. This is down to a rapidly increasing trend toward digitization.
“The typical tasks of finance departments—monitoring financial ratios, payments, and risks—are largely based on clear rules that could easily be standardized and digitized in a cost-efficient way," says Gori von Hirschhausen, Finance Consulting Leader Europe at PwC Germany. The study shows that this fact is well known to the finance departments of large companies. For almost 75 percent of the 522 CFOs surveyed worldwide, the acceleration of digitization in their own department is a high priority. Digitization is making great strides, particularly in large corporations with annual turnovers of more than ten billion euros. By contrast, the digitization process at mid-sized and smaller companies moves at a somewhat slower speed, even if its importance has been recognized. Notably, this is not necessarily due to a lack of financial resources. In fact, almost half of the CFOs surveyed expect their budget for comprehensive digitization to increase by up to 25 percent.
Rather, in some cases, the company lacks the necessary staff and expertise to properly integrate digital processes into their everyday workflows. While it has become somewhat commonplace to use dashboard tools to enhance the way reports are visualized, the use of other technologies, such as artificial intelligence and process mining (improving business processes), has seen slower adoption rates. Noticeably, in such digitization areas, there is still a lot of untapped potential. Moreover, the study shows that CFOs can actively contribute to redefining their new role during this time of transition.
According to the study by PwC and WHU, new responsibilities are emerging for CFOs in the areas of data management, forecasting, and other analytical processes. This potential will give CFOs the opportunity to create new areas of influence and provide greater support to corporate management in strategic matters.