What does a CFO do

CFOs - the new jack-of-all-trades in the company

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You have to reduce costs, improve processes, identify growth opportunities and plan future scenarios for the company financially - Chief Financial Officers are the strategic all-rounders in the company. How their tasks are changing.

In 2018, Chief Financial Officers (CFO) in many companies will have to face growing financial and optimization pressure. The classic tasks of CFOs, such as

  • Budget management,
  • Cost-benefit analyzes,
  • Securing and planning financial resources,
  • But also risk management
  • strategic and tactical tasks in the area of ​​production, productivity, quality or customer service

are increasingly being penetrated by new areas of competence that CFOs deal with and require the skills that they must acquire more intensively.

2017 | OriginalPaper | Book chapter

CFO - from number manager to co-pilot

The role of the CFO has changed more rapidly than almost any other management function in recent years. With the decision-relevant, legal and service functions, the article describes the essential ...

As the study "Finance Excellence 2020" by the consulting firm Horvárth & Partners shows, the chief financial officers in companies are challenged above all in the face of the growing requirements for accounting regulations and the increase in compliance risks: after all, for 60 percent of the more than 120 chief financial officers from Germany and Austria and Switzerland, which were surveyed for the study, are currently the top topics. But the increased demands on information and communication technologies or regulatory changes are also on the CFO agenda.

Change of roles and skills

In addition, 90 percent of the financial decision-makers surveyed see that the roles and competencies of the finance function in companies will change radically. Almost three-quarters of the study participants believe that the availability and linking of data across companies and value chains will be a key driver for future CFO management. At the same time, however, the tax officers should also identify growth opportunities in good time and submit reliable scenario planning. Digitization is a key issue here, but measurable successes are still difficult to grasp in many companies, which makes forecasts difficult. A survey by the consulting firm on digitization success shows: only 52 percent of companies in German-speaking countries can attribute the first increases in sales to digitization, regardless of the amount. However, almost all companies were able to increase their productivity or reduce costs through digital measures. The companies were able to achieve efficiency advantages particularly in the IT, logistics / supply chain, production and sales areas.

The advancing digitization places numerous demands on the organization of the finance department. From the effective use of large amounts of data to process automation with robotics to the newly required working methods and skills of employees ",

Achim Wenning, conference leader and expert in the field of CFO strategy & organization at Horváth & Partners, confirms the change in the tasks of CFOs.

Curbing costs has priority

It is interesting that instead of growth-oriented measures, many CFOs in companies are looking more and more at the costs in the value chain and want to become more efficient here: "The focus on costs has achieved a new status. For companies, it is no longer just about finding new ones To develop growth areas for oneself, but also to optimize the cost side in order to survive a possible crisis scenario ", says Conrad Günther, board member of the International Controller Association ICV. CFOs also often find important levers in corporate management

  • the check of supplier relationships,
  • the bundling of purchasing volumes,
  • the adjustment of the product and service portfolio or
  • the optimization of production and innovation processes.

This control function can also affect entire business processes, as the authors Matthias J. Rapp and Axel Wullenkord show in their book "Unternehmenssteuer durch den CFO". In order to anchor the lever of cost optimization in the long term, for example, CFOs often resort to outsourcing models. The outsourcing can affect parts or entire business processes of a company. Rapp / Wullenkord show how corresponding organizational concepts have to be introduced in the finance sector and when it makes sense to outsource suitable parts either to an internal shared service center or to an external service provider (outsourcing). However, which organizational options are beneficial to cost efficiency varies from company to company. Each model has advantages and disadvantages, according to the authors. One message is that behind the models, the idea of ​​value-added partnership must stand and that cost reductions can only be one component in them.

Co-pilot in corporate management

The Springer author Karlheinz Hornung takes a closer look at the changed role of the number controller in the chapter "CFO - from number manager to co-pilot" in the book "Controlling and Leadership". He observes: "The role of the CFO has changed more rapidly than almost any other management function in recent years." CFOs are increasingly becoming entrepreneurs in the company. In the team with the CEO, the CFO must also be a "proactive force in the company" and also assume a kind of co-pilot function, says Hornung, describing the new direction. In addition, from Hornung's point of view, the financial specialists are increasingly becoming the face and contact person for the capital market. Because CFOs have to explain figures on the company's development as well as the strategic roadmap to the company's shareholders and financiers. The job profile that new applicants have to fulfill has become correspondingly demanding. In addition, CFOs now act as interdisciplinary service providers. Hornung knows (p.126) that they have to support the operational areas of the CFO in their tasks in many ways, and are convinced: "The old school inspector is a thing of the past."