Data and Analytics: The Cornerstone of Modern CFO Responsibilities

Data and analytics (D&A) stands out as a key area in which many CFOs are now expected to excel. More than three-quarters (76%) of our survey respondents said they have ownership or co-ownership of enterprise D&A. (See Figure 1.)

Profitable growth will always be CFOs’ number one priority. However, the ability to harness data-driven insights is crucial for making timely and informed business decisions that drive profitability and enhance competitive advantage. By taking responsibility for D&A strategy, CFOs can ensure that the organization is leveraging data effectively to support business objectives. In addition, owning enterprise D&A and anchoring it to the overall business ecosystem underscores the CFO’s ability to create a streamlined, measurable approach to tracking enterprise performance metrics.

To prepare to take on D&A for the company, a CFO must develop a depth of knowledge and confidence in using data analytics tools and methodologies. Then the CFO should collaborate with the company’s IT and data science teams to build a cohesive data strategy that aligns with organizational goals. By doing so, the CFO can transform data into actionable insights, enabling more precise forecasting, risk management, and strategic planning.

Beyond Finance: Embracing a Multifaceted Role

D&A is not the only nontraditional area in which CFOs—and finance professionals who aim to move into the CFO role—should be cultivating new skills. The Gartner survey reveals that CFOs are taking on many roles which extend beyond traditional finance, including responsibility for artificial intelligence (AI); IT; real estate; cybersecurity; and environmental, social, and corporate governance (ESG), as Figure 1 reflects.

This shift necessitates a more collaborative approach, with CFOs relying on their leadership teams to manage diverse functions effectively. To navigate this expanded role, CFOs must prioritize time management and delegation. They must empower their teams to take ownership of specific areas so that they can focus their own attention on high-impact decisions that drive organizational success.

Additionally, fostering a culture of continuous learning and development within finance teams is crucial to meeting the evolving demands of the finance role.

Technology Continues to Expand CFOs’ Responsibilities

Technology adoption is the driving force behind the expanding role of CFOs. As businesses increasingly rely on digital tools and platforms, CFOs must become adept at understanding and leveraging these technologies to drive efficiency and innovation.

AI is one area in which CFOs can make a significant impact. By utilizing AI-driven analytics, CFOs can gain deeper insights into finance and other enterprise data, identify trends, and make better decisions. To do so, CFOs must work closely with their IT departments and ensure that the company has in place the necessary infrastructure and skills.

Blockchain technology is another area that holds promise for CFOs. By providing a secure and transparent way to record transactions, the blockchain can enhance trust and efficiency in financial processes. CFOs who embrace blockchain technologies can tap into the benefits of more streamlined operations, reduced costs, and improved accuracy.

At the same time, as organizations have become increasingly digital, cybersecurity has emerged as a critical concern. Those CFOs who are responsible for overseeing risk management must ensure that their organizations are protected against cyberthreats. This requires a proactive approach to cybersecurity, including regular assessments, employee training, and investment in advanced security technologies.

In cybersecurity, like in many areas, CFOs must collaborate with other departments, such as IT and legal, to develop comprehensive strategies. By doing so, they can mitigate risks and safeguard their organizations’ financial and reputational assets.

Connecting Operational and Financial Outcomes

To effectively bridge the gap between operational and financial outcomes, CFOs should identify key metrics that align with both financial and operational performance indicators. Then they should set quantifiable targets for KPIs that reflect organizational strategy, such as increased shareholder value, so that they can pinpoint strategic drivers which impact strategic objectives. From there, CFOs can meticulously plan and execute tactical elements such as pricing models, marketing outreach, and customer engagement strategies, with the goal of supporting the organization’s overarching strategy.

This integrated approach ensures that every aspect of the business is aligned toward achieving common objectives, fostering a cohesive and agile organization.

The Importance of Leadership and Communication Skills

As CFOs take on more and more strategic responsibilities, decisive and dynamic leadership and communication skills become increasingly important. CFOs must be able to articulate their vision and strategy to stakeholders, including board members, investors, and employees. This requires the ability to communicate complex financial information in a clear and compelling manner.

CFOs must also be effective leaders, capable of inspiring and motivating their teams. By fostering a collaborative and inclusive work environment, CFOs can drive innovation and performance. At the same time, CFOs should prioritize their own professional development, seeking opportunities to enhance their leadership and communication skills.

Their expanded role will require CFOs to make decisive tradeoffs in prioritizing their own time. If they make the right decisions, CFOs will play a pivotal role in shaping the future of their organizations—driving innovation and creating lasting value in an ever-changing world.