The nature of the numbers has also changed - no longer does a profit and loss suffice. CFOs must now present information with increased detail (granular) – to the consumer level, break even analysis, cash burn rates, sensitivity analysis, conversion rates for inquiries/call centres/help desks, variance analysis (rate and time) of service delivery, and activity-based costing.
Further, CFOs are now working within an environment that presents many other opportunities, and challenges (mostly rewarding), including:
- overseeing many functional areas, often across broad geographies and business units
- juggling strategy and operations, with strategy now being developed or evolved on an agile basis
- carrying the commercial issues for the C-suite
- leading communications with stakeholders
- participating in governance, at least as company secretary, but more often in a functional role
- leading information technology change, whether it is CRM or ERP implementations
- managing personnel
- carrying accountability for funding, whether government, investor or financier provided
- ensuring fiscal compliance
- mitigating and managing risk
So what’s next? The trending issues CFOs are focusing their immediate energy on, include:
- Establishing digital platforms for mobility and facilitate insight into business performance, for their team and across the organisation
- Capturing data and undertaking analysis, to link to business outcomes via:
- automated collation
- linking disparate systems and identifying trends, and then looking for drivers and actions
- artificial intelligence
- Swinging finance teams from data collection to predominantly data analysis
- Data analysis is occurring on a real-time basis, and leading to immediate decision making
- Integrating financial and non-financial data
- Responding to environmental changes in their sector to reposition their organisation as a client-lead service organisation, including wholesale changes to culture, training, people management and reporting systems.
All of this has culminated in the CFO no longer playing a functional role, but one of an adviser. The CFO is one of the key partners (with the CEO and CIO) to guide, develop and protect the organisation. Their key skills are now the capacity to drive to completion organisational change, assess an organisation’s options, leverage skills of the organisation or third parties for outcomes/change, communicate concisely and clearly inward (up and down) and with external parties, and manage many issues at once.
For those care sector CFOs reading this article and saying ‘if only’, your pathway to progressing may include:
- Creating capacity by lifting yourself from the detail, upskilling staff and/or adopting technology
- Redeploying redundant staff roles
- Developing your team capabilities
- Building relationships within the organisation
- Not letting finance be isolated in the back office, instead encourage proactive participation in the business, suggest and lead change, analyse, and work collegiately
- Be involved in the broader business and remove barriers/silos within the business
There is certainly no greater time than now that organisations need multi-skilled, proactive, forward looking CFOs.
Mark Harrison is a Partner at Pitcher Partners Melbourne. He leads the Pitcher Partners’ Care and Nor-for-profit sector teams and has a wealth of experience working with clients in the health industry.