There was a time when the most senior finance officer in a company spent their life just thinking about last quarter’s figures. But not any longer.
Earlier this year, a study by McKinsey showed clearly how the role of a CFO is expanding rapidly. CFOs’ responsibilities evolved to include business processes such as procurement, internal audit and investor relations; more recently, the role has shifted further to embrace huge organisation-wide responsibilities such as business strategy, risk management and M&A execution.
A typical CFO is now seen as the lead support to the CEO, sitting alongside the CEO in forming business strategy. The number of functions that now report directly to the CFO gives them an excellent oversight of all elements of the business and a deep understanding of business strategy. Indeed, in FTSE 100 businesses it’s far from unusual to see CFOs eventually becoming CEOs themselves.
CFOs, data and digital transformation
The study highlighted one area where CFOs are increasingly playing a vital role in recent years: digital transformation.
In many organisations, the finance function was one of the first to experience the benefits of digitalisation. This in turn led to finance directors embracing the benefits of data analytics, using the wealth of data generated by digitalisation to focus on forward-looking processes such as dynamic cashflow planning.
It’s this experience that has led to CFOs taking a much wider role in leading digital strategy, exploring ways in which technology can transform all areas of the business and driving sustainable growth.
This is great news for large organisations that can afford an experienced CFO. The McKinsey study makes the point that the evolving role of the CFO means that they need more capabilities than ever – and this puts an experienced CFO well out of the financial reach of many medium and smaller businesses.
As the role of the CFO has grown, entrepreneurial owner-managed businesses are missing out on the transformational input that they offer. The finances of the business will still be well managed and under control, but the forward-looking, strategic elements that a CFO can bring – such as the ability to analyse the risks and benefits of transformational digital projects – are absent. This is why virtual CFO services, such as those offered through BKL Advance, are proving so popular with fast-growing owner-managed businesses.
How we can help
Our service enables owner-managed businesses to access the experience and skills of an astute finance professional who can make a real difference to the business. We work with owner managers of growing businesses, providing support and strategic advice: predicting trends, using data analysis to improve processes and services, and providing invaluable guidance on digital transformation not just in the finance function, but across the entire business.
The McKinsey study is proof that a CFO of today wears many different hats. No owner-managed business will need all those hats, all the time – but BKL Advance is an affordable way to access the right level of strategic guidance and support for the business.
For more details about our outsourced CFO service, please get in touch with your usual BKL contact or use our enquiry form.
You can also learn more on our dedicated BKL Advance page for CFO services.