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Forward-thinking CFOs must step up and play a critical strategic role in transforming enterprises away from traditional operating models to one that gives executives access to insights in real time.

But many are unclear about the best way forward. They are asking questions like: “How can I turn the rising tide of enterprise data into real-time insights that drive growth across the business? How can I empower the workforce to transform my organization and support future-ready digital business models? And how can I capitalize on new technologies—like blockchain, analytics, machine learning and artificial intelligence (AI)—to enable new forecasting models and a truly agile finance organization?”

To help CFOs find the solutions to these questions and to reduce the risk for large organizations of being outpaced by technological change, market disruption and the evolving demands of their customers, the TCS Business 4.0 Institute has conducted a deep dive into these topics.

About the researchTo understand how finance leaders are tackling the challenges and leading the transition to a real-time business, we sought the views of more than 500 CFOs and senior finance leaders in Europe (UK, Germany, The Netherlands) and North America. The CFOs in this research work across 11 sectors and represent organizations generating at least $1 billion in annual revenue; 12% are from companies with annual revenue of >$10 billion.

A series of in-depth interviews was conducted with finance leaders at global organizations to validate our findings.

THE FOUR PILLARS OF THE FUTURIST CFOResetting finance leadership with a real-time framework

TCS 2020 CFO StudyHow Future-Ready CFOs Are Driving Real-Time Business Performance

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Our research shows that, to secure their companies’ future relevance, CFOs must build their role upon the following four pillars.

CFOs see themselves as enterprise growth catalysts and have a clear view of their “futurist” role. Nearly half (44%) expect to be taking the lead in driving technology-enabled business model transformation within the next five years.

“Today’s best in class CFOs are strategic partners who provide business guidance as well as ensure financial stewardship. These roles will continue to be highly valued. However, the CFO of the future will have to be technologically adept to understand the value proposition of a digital transformation. A CFO can drive the agenda by leveraging technology to enhance analytics and thereby spearheading the transformation within the Finance function. They are best positioned to translate the benefits into an ROI for the CEO,” says Sujith Chandran, Senior Finance Director, The Hain Celestial Group.

But the findings also reveal that there is no “one-size-fits-all” remit for the future-ready CFO—ambitions are clearly shaped by industry priorities and the competitive landscape in which their organization operates. To fulfil their career ambitions while meeting the needs of the enterprise means finance leaders must find the right path for them.

There was a phase when CFOs pushed more towards strategic partnerships. Those are still highly valued skillsets, but I think what will become more valued are technical skills. A CFO can drive the agenda through analytics and using technology, and they are best positioned to translate that into an ROI need to the CEO.

— Sujith Chandran Senior Finance Director at The Hain Celestial Group

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Retail Enterprise

wide analytics governance

Financial Services

New products & services & capital

allocation for transformation

Insurance New ways of

working

CPG Tech-enabled

business model transformation

High TechTech-enabled

business model transformation

CFOs expect to be playing a critical role in 5 years’ time in these areas:

47% 44% 47% 50% 43%

Leading in their own way

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CFOs recognize the importance of bringing the entire enterprise along on the digital transformation journey and many are taking ownership of change-management initiatives to accelerate the transition to real time. But this is no easy feat, particularly for those that are still evolving away from their traditional back-office remit.

Defining agile leaders versus traditionalistsThis research reveals big differences in the business attitudes and processes of the more digitally enabled businesses and those of their more traditional counterparts.

In this analysis, we refer to these two groups as “agile leaders” and “traditionalists”:

Agile leaders are those organizations able to access 90-100% of key operational and financial

performance data, and act upon the insights with immediate effect.

By contrast, traditionalists are able only to access, and act upon with immediate

effect, 1-29% of key operational and financial performance data.

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The agile leaders (see sidebar) in our research provide valuable learnings—this group is significantly more likely to belong to organizations that have implemented cultural transformation initiatives—and they monitor their success. For example:

• 67% (two-thirds) agile leaders are empowering internal teams by giving them greater accountability for new projects compared to 34% (one-third) of their more traditional counterparts.

• Seven in 10 agile leaders now have performance metrics in place to measure progress on change, compared with just 15% of traditionalists.

90%of digitally-advanced finance organizations

are taking steps to change behaviors

58%say the CFO is responsible for digital change, yet half admit that organizations’ change management execution is falling short

Organizational change continues to be a top concern for CFOs

Front-to-back cultural transformation

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CFOs understand the crucial need to supply their businesses with accurate forecasting to provide a solid basis for enterprise-wide decision making. Yet even the most agile finance functions face tough challenges in their business analysis and planning work—and they are acutely aware of these difficulties. The answer will be to create and develop more agile financial planning and analysis (FP&A) capabilities, with a mandate to improve forecasting accuracy throughout the business.

New technologies are set to play a crucial role in helping finance to increase the agility of its FP&A. Again, agile leaders display higher levels of confidence in their options and this is translating into action. Almost half (45%) expect to have used blockchain to secure access to more reliable data by 2025, compared with only 27% of their traditionalist counterparts.

CFOs struggle to foresee disruption and is often too volatile to predict

Technology evolution

Financing/capital

Customer demand

Payments landscape

Business partnerships

Talent/Skill needs

Product/Service lifecycles

Business model lifecycles

Political stability/instability

Competitor landscape

Acquisition candidates

39%

29%

28%

26%

26%

25%

24%

24%

23%

16%

28%47%

24%

29%

27%

27%

27%

27%

24%

31%

30%

25%

Important to forecastDifficult to forecast

Fast-moving disruptors to the business landscape, including technology development, industry convergence and business model evolution mean that business trajectories are becoming increasingly difficult to plot.

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Agile organizations are more confident in applying technology as a change agent.

Cloud

AI & Machine Learning

Advanced AnalyticsBlockchain

Percent very confident that the following

technologies could have a positive

impack on F&A capabilities

AutomationIoT

100%80%60%40%20%0%

Agile Leaders Traditionalists

Remodeling with agile finance

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Technology and data innovation

Advanced data and analytics tools have the potential to enable businesses to make significant strides forward. Yet many CFOs in this research admit there is more work to be done.

Right now, only 35% of finance leaders say that all decisions are made having reviewed all relevant data from within the enterprise; and only 43% are confident their decision-making always reflects a comprehensive range of ecosystem data sourced from partners and other collaborators. The proportion of businesses consistently bringing broader datasets into their decision-making processes is even smaller, at just 27%.

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90%+Shared concerns around skill, data quality, and information security at all levelsEnterprise

Universe

Ecosystem

Data remains an under-leveraged resource for CFOs because of fundamental concerns.

Those businesses not yet confident that their decision making is consistently driven by data now need to close the gap. Not only will CFOs have to improve their understanding of technology and the application of technology to improve the credibility of their decision making, they must continue to cultivate a more balanced relationship with the CTO. Currently, six in 10 (61%) say that the CTO or CIO in their organizations takes the lead in identifying the technologies that the business will require in three years’ time.

A blueprint for realizing CFOs’ agile ambitionsFinance leaders are clearly embracing innovation, change and the digital agenda, but many are failing to move at the pace required to secure significant competitive advantage for their organizations.

Get the full CFO Study report nowRead the TCS 2020 CFO Study for detailed, actionable insight into the challenges and opportunities ahead, and to accelerate your evolution to future-ready CFO—and real-time enterprise.

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