R “Ray” Wang is the Principal Analyst, Founder, and Chairman of Silicon Valley-based Constellation Research, Inc. The article below appears as the Executive Summary for the just-released study, The State of Finance, featuring insights from over 1,000 CFOs and finance leaders on the key attributes of high performing finance teams.
The five role shifts for a customer-centric approach
Finance leaders must see customers in full color. CFOs and other finance leaders not only face short-term, traditional, quarter-to-quarter pressures, but they also must address a plethora of challenges including digital transformation, competition from disruptive startups, new technologies such as AI, and business model shifts such as revenue recognition. Unfortunately, CEO and board pressure have focused finance leaders on operational efficiency and regulatory compliance at the expense of middle to long-term growth. As the stakes mount for agility and growth, finance leaders must address five role shifts to a customer-centric approach to see customers in full color:
- From bean counter to business model strategist. Traditional finance and accounting roles no longer pass muster. Digital transformation requires CFOs who can craft new business models, plan for agility, create outcome-based versus product-based offerings and identify new joint venture opportunities.
- From static forecasts to rolling agile forecasts. The shift from quarterly close to monthly close to weekly close and now even daily close requires a new degree of agility. Forecasting must account for multiple models and a constantly changing set of variables and the use of technologies such as artificial intelligence. Organizations must build agility across a wide range of business risk scenarios, such as price wars, natural disasters, and terrorism.
- From adult supervision to co-innovation partner. The CFO has often served as the creator of policies, enforcer of policies and steward of the organization’s risk and liability. Going forward, the CFO must also add co-innovation partner to the job description. Business units need finance expertise to craft new offerings and adjust business models. Technology teams need support for long-term platform investments. HR leaders seek guidance on managing talent. Marketers need support to align the company’s offerings to brand strategy.
Want more? Read Ray’s complete analysis and all the research behind it here.