The role of senior finance executives has changed significantly in recent years. The days when finance roles were associated with “reactive number crunching” are over. Finance has become an important strategic partner for the CEO, as they plan the company’s development together.
What factors influence the change in finance roles?
In my view, the first reason is the development towards a data-driven organization. There are generally more figures available, especially in real time, which the CFO makes visible and usable for the company. Increasing digitalization and technological progress have drastically changed the way finance functions work. New tools and applications are available, from artificial intelligence and machine learning to automation and cloud computing, which help to optimize processes, reduce risks and make informed decisions.
As a result, the expectations of company management and investors for ad hoc information have increased significantly.
At the same time, the environments in which financial experts operate are becoming increasingly extensive and complex. The global positioning of many companies means that internationality and international knowledge are becoming increasingly important.
The transformation to new, SaaS-based business models also requires new skills from financial experts. Especially with regard to cash flow management, reporting/analytics and revenue recognition. The emergence of SaaS models has led to finance executives having to expand their knowledge and skills.
With increasing volatility and uncertainty on the global markets, risk management has become an essential element of the finance function.
Increasing regulatory requirements are also impacting the tasks of senior finance experts. With new laws and regulations being introduced in the financial world, the requirements for transparency and compliance have increased. This has increased the need to deploy finance experts with a comprehensive understanding of the regulatory landscape.
What does this mean for the skillset of senior finance experts?
Digital transformation
Finance executives need to rethink their traditional methods, adapt and reinvent their role.
Senior finance professionals must therefore familiarize themselves with new technologies and use digital tools to create more efficient processes. From implementing automation software to increase efficiency to using artificial intelligence and machine learning to create accurate forecasts. Digital transformation is challenging finance professionals to be proactive and drive digital change.
Strategic orientation
In today’s ever-changing business world, senior finance professionals are expected to go beyond their accounting and financial reporting duties and take on a stronger role in strategy planning and implementation. They are key intermediaries between financial information and the business direction of the organization.
They are not only responsible for financial planning and control, but also actively support the development and implementation of corporate strategies. They act as strategic partners by contributing financial knowledge that supports business development and planning.
Domain knowledge
In terms of the requirements for finance professionals, more content/domain knowledge is expected. This knowledge will help finance professionals fulfill their roles effectively and make strategic, data-driven decisions that contribute to the financial health and growth of the organization.
Risk management
With rising volatility, increasing regulatory requirements and continued uncertainty in global markets, risk management is the focus of many companies. Senior finance executives now play a crucial role in identifying, assessing and managing risk.
They are responsible for creating risk management strategies that enable the company to mitigate risks while achieving its strategic goals. They must assess current risks in a balanced manner and at the same time anticipate potential future risks.
Overall, finance has developed into a comprehensive, multifunctional and strategic area. Being limited to figures and reports is a thing of the past. Today, finance professionals are at the forefront of driving digital transformation, strategic leaders and key drivers of risk management. By understanding this shift in roles, finance professionals and organizations can ensure they are prepared for the challenges and opportunities ahead.
This article was written in cooperation with Stefanie Nagel, Manager of the Business Unit “Software” at HAGER Executive Consulting.
