How Data and Analytics is transforming the role of the CFO

November 24, 2023

A resilient data structure has become a mandatory part of measuring, managing and transforming business for long-term value creation. Financial consultants, Accordion published a playbook for CFOs in 2022, emphasising how finance has become critical in delivering a strong foundation to support ongoing strategy and generate value creation.

Driving that focus on finance is the disruptive and volatile economic conditions we are experiencing, causing many organisations to enhance their people, processes and technologies to drive the added value they need. 

At the core of this process is data and analytics. Once considered as an afterthought, data and analytics is now a priority for CFOs. Stakeholders expect information and insights based on real-time data, which facilitates the need for a comprehensive data strategy and for accurate and reliable analytics. CFOs and investors expect performance visibility that can support data-focused business decisions. 

While the CFO playbook still resonates today, there has been one particular shift in the last year: a rise in focus on data and analytics. The latest playbook focuses on the following key points:

Measure Liquidity

Closely monitor factors influence receivables and identify any factors such as one-off payments, debt or large vendor payments. CFOs should recognise and prepare for this potential impacts on a business.

Refocus on performance visibility

Many finance team measure against dated strategy plans and as a consequence, the report delivered don’t necessarily align with the correct KPs. CFOs must collaborate with investors and determine the value creation factors to deliver the right KPIs to generate a structured reporting strategy. This approach will ensure finance teams convert data into actionable insights and people can make informed decisions.

Determine the future technology

CFOs must explore and invest in the right tech stake in order to generate optimum financial and operational  reporting. 

Invest in new talent

After determining the right tech, a CFO must also invest in a team capable of navigating these systems. A priority hiring need for CFOs is finding finance talent with the necessary data skillset to leverage technology and utilise the power of data. A collaboration between finance and technology is more critical than ever. 

Establish the necessary data foundation

CFOs need continuous access to metrics to recognise factors influencing performance. While this may seem obvious, large quantities of valuable data is often hidden in legacy systems, meaning it is ineffective for delivering vital insights. Achieving this visibility requires the CFOs to leverage their systems and create a single source of truth that gathers and examines all data for analysis. 

Deliver vital analytics and insights

Without delivering a data foundation, finance will spend excessive time manually gathering data. With a single source of truth, CFOs reduce time spent on data analysis and focusing more time on high value activities. 

Create integrated business planning

Streamlined forecasting is pivotal in business management. Stakeholders will expect CFOs to utilise real-time data. While forecasting is a vital part of the CFO role, new CFOs must prioritise cash flow as a critical part of the business planning process, educating and working company leaders. An enterprise-wide approach ensures cash forecasting is connected to the business forecast and supply & demand planning, which is critical for business success.

Plan for the budgeting process

The CFO must act as a strategy leader, examining assumptions, creating processes to hold business leaders accountable, and delivering targets based on valued insights, creating efficient resource allocation and more informed business decisions. 

Prioritise performance factors

CFOs will collaborate with stakeholders to create an updated value plan, build a valued data and analytics framework and create new visibility into the state of the organisation. CFOs have the ability to generate insights into factors influencing performance, enabling them to prioritise performance factors.

Work with stakeholders on finance-focus transformation plans

Now is the time for CFOs to collaborate with sponsors and the wider business, to adapt transformation plans into action. 

While the general playbook for CFOs remains relatively the same, data and analytics are a part of every element of the role of the CFO.

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