According to Gartner, the top priority among CFOs in 2024 is leading transformation efforts within their organizations. Alongside that, other key trends include evaluating the finance function’s strategy, improving finance metrics, leading change-management efforts, and optimizing costs.
The success of each of these endeavors ultimately hinges on the CFO’s ability to effectively guide organization-wide transformations. With that in mind, we invite you to join us as we explore several practical ways that finance executives can lead their organizations through such changes so that you can apply these concepts to your company’s new year strategy.
The Evolving Role of Finance Leaders
In the past, CFOs and controllers were generally confined to the role of “number crunchers, and though that may remain a critical component of your responsibilities, you are more than that. You are a valuable member of the C-suite who can influence the direction and success of the entire organization.
As such, it is vital that you embrace the shift in the roles you play and provide actionable insights to the leadership team; that means analyzing financial data and using it to tell a story of how that data impacts your company’s short and long-term future.
Learn more about these changing roles in our Digital Controller/CFO study.
Reimagining Financial Processes and Systems
The common adage of “If it isn’t broke, don’t fix it” doesn’t apply to the modern CFO. If you want to affect meaningful transformation, you need to question and evaluate everything; no system or financial process is exempt from critique.
Conduct a systematic review of your current practices and identify areas that are ripe for improvement or innovation, paying particular attention to processes that rely heavily on manual inputs, redundant data entry, or other inefficient tactics.
For instance, automation, through the use of artificial intelligence, can significantly speed up your reconciliation and reporting workflows, allowing the finance team to focus on more strategic tasks. Similarly, implementing cloud-based financial systems can provide real-time data insights, improving decision-making and agility.
Driving Innovation in Budgeting and Forecasting
Both budgeting and forecasting are not just critical components of your organization’s financial health; they are also change catalysts. When exploring transformation opportunities, the C-suite will consider factors like time to value, return on investment (ROI), potential challenges, and whether a change is necessary and practical.
Nevertheless, every change initiative will ultimately boil down to dollars and cents. Even if an investment is likely to deliver a strong ROI, you still need the capital to pursue it, and that is precisely where you, as the CFO, step in. As a financial leader, you can implement rolling forecasts and modern budgeting processes to give the company the fiscal leeway it needs to pursue change.
Modernizing the way you budget and forecast also promotes better organizational resilience, as you’ll be able to adapt to unexpected challenges in today’s dynamic environment.
Transforming Financial Reporting
While looking to the future is vital, you also need to have a firm grasp of the company’s financial past. More importantly, you need to use reporting tools to understand the “why” behind the company’s prior financial successes and hardships.
Data analytics technologies and business intelligence platforms give you the power to gather, review, and contextualize massive amounts of data. You can use these tools to understand past developments, predict future trends, and illuminate the path forward for your organization.
Learn more in our on-demand webinar Business Intelligence: Simplified for Corporate Finance.
Overcoming Challenges in Transformation
Change is hard for everyone in a business, but those in the C-suite, including CFOs, often feel the brunt of the pressure. As a finance leader, you must navigate the landscape of changing regulations and technological advancements and combat the internal resistance to change.
That last task requires a nuanced, transparent approach. Instead of forcing the change on organizational members, it is important to educate them on why the change is necessary in the first place, alongside detailing the benefits it will provide.
When communicating with decision-makers, focus on short and long-term cost savings, efficiency improvements, and indirect financial benefits. Reducing the burden on line-level staff by investing in automation, for instance, can decrease churn, ultimately reducing hiring and onboarding costs.
When working with line-level staff and mid-level managers, you also have to translate financial benefits into tangible cultural improvements. In other words, you need to ensure they understand how saving money and implementing changes will improve their daily work life.
Building a culture that embraces change is crucial, and it involves communicating the vision and benefits of transformation clearly and consistently. Providing training to ensure the success of team members is equally important, as a well-trained staff will be confident in the tools you’ve provided them.
Are You Ready to Pursue Change in 2024?
As a chief architect of financial transformation, you play a crucial role in shaping the future of your organization. By reimagining financial processes, driving innovation in budgeting and forecasting, and transforming financial reporting, you can lead your organization to greater efficiency.
The journey of transformation is one that may be filled with hurdles, but with the right mindset, you can navigate them successfully. As you move into 2024, embrace the newly defined role of a finance leader and provide your team with the critical strategic inputs they need to thrive in the new year.