New opportunities for forward-thinking CFOs

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In the first of our two-part article on the redefined role of CFOs, we explored the results of some Sage research on CFOs that show how finance leaders are transforming their traditional role by incorporating new skillsets. The study found that three key CFO personas are emerging: Chief Facilitative Officers, Chief Fairness Officers and Chief Future Officers. In this article, I’ll explore some of the new and expanding responsibilities that CFOs are beginning to embrace as businesses navigate the post-pandemic era.

Quite frankly, I’m heartened by the data. CFOs today are now pursuing unprecedented opportunities to exert a larger and more positive impact on their businesses than ever before. That’s because, regardless of their role/persona, today’s CFOs are demonstrating innovative thinking and versatility in their pursuit of new technology and initiatives.

Driving digital transformation

One of most compelling outcomes of the COVID-19 pandemic has been the unprecedented (and urgent) pivot to digital customer services. In mere weeks, the expectations for instant transactions, self-service tools, and always-on support have become 'table stakes' for many companies. This demand for change – digital transformation – underpins many strategic objectives for today’s CFOs.

That’s why many US finance leaders name the upgrading of software and technology solutions to drive digitalization as a top priority – even beyond the traditional focus on revenue and costs. They know that integrating emerging technologies into their company and developing new products and services are a strategic imperative.

For instance, artificial intelligence (AI) and machine learning (ML) are rapidly rising to the top of the CFO agenda – almost two in five (38%) finance leaders report that AI and ML will have a major impact on their ability to create or maintain a competitive advantage. However, fewer than half (47%) say their wider organizations are prepared to upgrade software, develop new products and services (46%), or integrate new technologies (46%). This readiness gap underscores a major hidden threat in many organizations and markets.

Prioritizing cybersecurity

As the number of US data breaches continues to rise, I’m not surprised that Americans are increasingly conscious of cybersecurity threats. According to 16% of US finance leaders, cybersecurity threats are holding their organizations back. (That figure drops to just 11% in the UK, and 7% in Canada.) As digitally-native older millennials rise to financial leadership positions, they’ll have a greater understanding of online dangers than their predecessors, and greater visibility into cyber threats than their younger or older peers.

The Great Resignation, which saw the nation’s 'quit rate' reach a 20-year high, raises the priority of recruiting technically savvy pros – not only to respond to cybersecurity threats, but also integrate new and emerging technologies. Fewer than half (47%) of finance leaders claim their organization is prepared to hire new talent or retain existing workers.

Adopting cryptocurrency

Americans are ahead of the curve when it comes to cryptocurrency adoption. About half of US finance leaders have either personally used cryptocurrency (47%), invested in it (51%), or made plans to invest in it (49%). Meanwhile, 21% of these leaders say their organizations currently accept cryptocurrency as payment, compared to around 13% in the UK and 12% in Canada. What’s more, 33% of US finance leaders say their organization plans to accept cryptocurrency as payment within the next year.

However, the environmental impact is a concern for some. With energy-intensive Bitcoin, the average transaction consumes more than 1,700 kWh of electricity. That usage could be mitigated through the use of low-carbon energy or by accepting only less energy-intensive crypto such as Ethereum. At present, this issue may require extra CFO scrutiny, particularly in conjunction with sustainability targets.

Exploring the metaverse

The metaverse is an emerging network of immersive virtual worlds, allowing users to interact with businesses, brands, and each other in digital environments. Multi-billion-dollar investments from tech giants like Meta (formerly Facebook) and Microsoft have convinced many that the metaverse is the next frontier.

That’s why US organizations and their CFOs are preparing to capitalize on the new opportunities. For instance, enhanced data visualization provided by this emerging tech could provide finance teams with more precise, frictionless ways of working. Almost half of US finance leaders say their organizations have completely entered the metaverse. In addition, over half say they are preparing for the potential impact of the metaverse by exploring new finance or accounting processes (55%) and developing relevant professional development training (54%).

Expanding ESG coverage

As the US moves closer to net zero emissions by 2050, climate concerns are intensifying for both businesses and consumers. Today, 55% of Americans say they’re willing to spend more for eco-friendly products and 40% would boycott companies that fail to go green. US finance leaders want a larger role in Environmental Social and Governance (ESG) initiatives, such as developing KPIs for ESG initiatives and regularly reporting on sustainability programs. Finance leaders in the 25-34 year-old cohort are more likely to report that sustainability programs are a top priority for their organization than other age groups.

Fortunately, CFOs are making impactful changes with their current resources. 86% of U.S. finance leaders agree that their ESG programs run efficiently and achieve the maximum output for the allocated budget.

Based on that data, I can see why the current business landscape requires forward-thinking CFOs to reimagine how they’re guiding their organizations. From diversifying their expertise and recruiting the right talent, to ensuring they implement emerging technologies and purpose-driven programs, I believe these roles provide a range of ways for finance leaders to ensure that their organizations stay ahead of the curve. To meet the challenges and opportunities their businesses are facing, I encourage modern CFOs to embrace new opportunities and be flexible in responding to challenges.

We discuss topics like these and more at the CFO Summit for Sage partners and customers – view the highlights from Sage Transform 2022.