58 percent of global CFOs surveyed and 56 percent in the UK & Ireland say that they need to build their understanding of digital, smart technologies and sophisticated data analytics.
53 percent of global respondents and 61 percent of UK & Ireland respondents said delivery of data and analytics will be one of the most critical components for tomorrow’s CFOs. However, 67 percent of UK CFOs and 51 percent of global CFOs surveyed say they are unable to focus on strategic priorities because of increasing operational responsibilities.
The role of the Chief Financial Officer (CFO) is continuously changing with digital innovation, the proliferation of data, volatile risks, new regulations, and increasingly demanding stakeholders acting as the driving forces behind this transformation, according to EY’s DNA of the CFO 2.0 study. The impact of these forces is seen in the increasingly diverse DNA of finance leaders worldwide, with an accepted definition of the CFO role increasingly difficult to pin down.
Based on a global survey of 769 finance leaders, including 61 from the UK and Ireland, EY’s report says that 58 percent of global CFOs and 56 percent of UK and Ireland CFOs feel that they need to build their understanding of digital, smart technologies and sophisticated data analytics. In addition, 53 percent of global respondents and 61 percent of UK and Ireland respondents said the delivery of data and analytics will be one of the most critical components for tomorrow’s CFOs. James Meader, EY’s Finance Performance Improvement Advisory Leader, UK & Ireland, comments: “CFOs are adapting to a changing role which they are responding to in different ways, and we are seeing quite different profiles and responsibilities emerge. While this presents an exciting opportunity for CFOs to really shape the contributions they make, it also means that those who don’t proactively define their role in the face of these major forces may be at risk.
“CFOs need to have a clear view of their own competencies, the role they want to play in strategy and the major disruptions that offer threat and opportunity. If they fail to adapt, they run the risk of being marginalised from the senior decision-making circle. Of course, the business environment will continue to evolve and change in expected and unexpected ways. But, finance leaders can build defences and take pre-emptive steps to future-proof their role and build finance function capabilities to exploit opportunities and manage risks.” On top of this changing role, the report reveals that CFOs around the world feel they are becoming increasingly stretched as operational responsibilities take up an increasing amount of time that should be spent on strategic priorities. Approximately 52 percent of global CFOs surveyed said they are unable to delegate due to a lack of necessary skills in the finance team. And, 56 percent of global CFOs said they are unable to concentrate on priorities because of time spent on compliance, controls and costs.
Competing demands on UK CFOs
The survey results for the UK and Ireland are largely consistent with the global study apart from a few key exceptions. Firstly, 60 percent of CFOs in the UK and Ireland, compared to 47 percent globally, say their current finance function does not have the right mix of capabilities to meet the demands of future strategic priorities. And, 67 percent of CFOs in the UK & Ireland, compared to 51 percent globally, also say that they cannot focus on strategic priorities because of increasing operational responsibilities. Richard Baker, EY partner and Thames Valley and South Markets Leader, comments: “There is a huge level of expectation on the finance function. The UK has a complex, sophisticated and mature regulatory system, which inevitably creates a demanding role for UK CFOs. What is clear, however, is that having the right mix of skills and capabilities in their immediate team is a high priority for many.”
On a positive note, only 38 percent of CFOs in the UK and Ireland say they need to improve their stakeholder management skills to deliver against future priorities in comparison to 50 percent globally. Concluding Richard adds: “As the business environment becomes more complex, CFOs, like all leaders, will need to adapt and focus on the attributes and skills that their companies will need to succeed in the future. Successful CFOs will be those who proactively shape their role in response to the major forces transforming the business environment.”