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Future CFO 2019

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Many organisations have ta ken the deci- sion to embed these individua ls into the day-to-day business." Technological advances have enabled fi nance directors to scrap the monthly management reports of old, replacing them with real-time interactive models, which all divisional managers can feed into. Potentially, this means organisa- tions have a clearer picture than ever of any headwinds, which may challenge reve- nues, productivity and profi tability. "In a well-run organisation, the fi nance function should have created a clear roadmap for the operational and fi nancial performance of the whole business that has been created collaboratively with all the other functions," explains Robin Bry- son, interim CFO at Impero Software. "This puts the fi nance function at the heart or, arguably, the mind of the busi- ness from the outset, with many now being crowned as the 'stewards' of the long- term enterprise vision. They are also a key player in guiding diff erent business areas to achieve short-term performance needs within the overarching narrative of long- term value creation." Senior managers agree that the role is becoming increasingly cross-functional within businesses, with the fi nance chief being asked to lead on issues of change From number crunchers to value drivers Assumptions of chief fi nancial offi cers are often outdated, and organisations that are repositioning them at the centre of the business are making enormous gains enior executives may need to rethink the responsibilities allo- cated to their chief fi nancial offi cer (CFO). A role once seen as little more than the chief steward of spreadsheets, invoices and expenses is now tomorrow's leader, using technology and advanced forecasting meth- ods to plot a company's path. According to a report earlier this month by Deloitte, dramatically entitled The meteor is coming: the role of the private equi- ty-backed CFO, investors are now expecting the CFO to be the fi gure who drives tech- nological change, good governance and investment returns. "From a traditional, backward-look- ing number cruncher, they want the role of the CFO to switch to a forward-look- ing chief value extractor, with sufficient vision to foresee and navigate the changes ahead and make the greatest contribution to value from day one," explains Andy Halls, lead partner for Deloitte's Private Equity-Backed Programme. While this survey looked specifi- cally at private equity-backed CFOs, the sentiment of a changing role is echoed throughout industry. Peter White, CFO of Hyperoptic, a broad- band provider employing more than 1,300 staff , says companies of all kinds are now repositioning the role of CFOs, right into the centre of the business. "CFOs need to ensure they get involved in all aspects of decision-making," he says. "Using data and insight to support deci- sion-making helps a business to achieve its goals and ultimately this approach ena- bles you to become a trusted partner who is invited to contribute." M r W hite says today 's CFO is fa r less focused on t he repor t ing of histor ica l numbers a nd issues a r ising from com- plia nce, account s a nd ta xat ion. Instead, t he role ha s a n empha sis on f ut ure fore - ca st ing t hroug h t he use of deta iled his- tor ica l a na ly t ics. "CFOs have a wider remit with respon- sibility for key performance indicators, corporate drivers and analytics as well as for 'lag' fi nancial reporting," he says. "All aspects of the role are important to an organisation, but without a fi rm grasp and understanding of the day-to-day and near-term forecasts, the ability to add value to the long-term business plan will be severely restricted." As the role is evolving, so too is the relationship between the CFO, fellow executives and other depar tments within the organisation. " The past ten to f if teen years has seen a signif icant rise in the va lue of the f inance business par tner," says Jon Bell, CFO at PX P Financia l. " There has been a rea lisation that f inance profession- a ls, who can combine strong ana ly tica l abilities, commercia l acumen and 'peo- ple' skills, add some rea l va lue through effective and informed decision-ma king. Anna Codrea-Rado Culture and tech journalist, her work has been published in The New York Times, The Guardian and W IR ED. Nick Easen Award-winning journalist and broadcaster, he covers science, tech, economics and business, producing content for BBC World News, CNN and Time magazine. Clare Gascoigne Formerly on the staff of the Financial Times, she is now freelance journalist specialising in City and fi nancial features. Marina Gerner Award-winning arts, philosophy and fi nance writer, contributing to The Economist's 1843, The Times Literary Supplement and Standpoint. Joe McGrath Financial journalist and editorial director of Rhotic Media, he has written for Bloomberg, Financial Times and Dow Jones, and was previously asset management editor at Financial News. Becky Pritchard Award-winning journalist covering business and fi nance, she previously worked for Dow Jones and has written for publications such as The Wall Street Journal and Financial News. management and organisational transfor- mation much more often. "The CFO should be involved with every business function in a company, whether by direct report or via processes that require CFO planning, decision or sign off ," says Dominic Ward, CFO of datacentre pro- vider Verne Global. "The stereotype 1980s accountant CFO is no more. The key objective of any business is to grow fi nancially and commercially. The two are tied intrinsically and cannot be targeted or achieved independently. Financial success leads to commercial suc- cess and vice versa." Deloitte's repor t involved inter view- ing more than 100 investors, chief exec- utives, chairmen and women, and CFOs. It concluded that the modern CFO must be a leader, with responsibility for "determining strategic business direc- tion, M& A, f inancing, capita l market and longer-term strategies vita l to the future of the company". This demanding checklist means CFOs are certainly growing in importance to businesses with a global presence. Virpy Richter, CFO of affi liate network Awin, says those taking the role have had to adapt. She explains: "Technology has essen- tially granted CFOs more time to become practically involved in all facets of a com- pany, and the importance of taking budg- eting and forecasting into account when making business decisions has meant this is necessary. "While everything from customer rela- tionship management to marketing cam- paigns are not necessarily the responsi- bility of the CFO, it is likely their advice will inf luence any decisions made on these matters." That a senior decision-maker from the fi nance function is being encouraged to take part in the decisions made by the mar- keting and communications team shows how modern approaches link all activities back to shared corporate targets. "I suppose the benefi ts of this approach mean that every decision is made with a fi nancial thought process, so ventures can be rated on their profi tability and practi- cality," says Ms Richter. Marie Myers, CFO at UiPath, calls this "instilling a return-on-investment approach". She says the reasons for inte- grating a CFO into the core of the business need to be explained to all stakeholders if future interactions are to be successful. "By having everyone work together more holistically and focusing on effi ciency, eff ectiveness and experience, business results will be stronger and improve the bottom line," Ms Myers concludes. "The challenge is how to be much more collab- orative, team oriented and innovative. We have to break down the silos and help peo- ple connect the dots. Distributed in /future-cfo-2019 @raconteur /raconteur.net @raconteur_london THE FUTURE CFO T O U G H D E C I S I O N S C H A N G I N G S K I L L S E T S R O U N D T A B L E Strategic operational and fi nancial changes are sometimes necessary Why CFOs need to upskill both their technological and leadership capabilities Four risk management experts discuss the changing nature of risk and how CFOs can prepare 02 04 08 raconteur.net Joe McGrath S Contributors M&A transactions and execution 28% M&A strategy Post-merger integration IT Procurement Digital Cybersecurity 16% McKinsey 2019 MODERN CFOS HAVE A HOS T OF RESP ONSIBILITIES Percentage of CFOs who say that the following activities and functional areas report to them SKILL SE T PRIORITIES FOR THE FINANCE FUNC TION Top skills sets CFOs would like to development within the fi nance function either through additional hiring or training Risk management (such as enterprise/operational risks) 67% Internal audit 51% 58% Corporate strategy (including portfolio strategy/management) 46% 46% Investor relations 43% 44% Regulatory compliance 42% 42% Enterprise transformation 37% 39% Pricing of products and/or services 33% Board engagement 29% I N D E P E N D E N T P U B L I C A T I O N B Y # 0 6 2 8 R A C O N T E U R . N E T C F O E V O L U T I O N Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 8616 7400 or e-mail info@raconteur.net. Raconteur is a leading publisher of special-interest content and research. Its pub- lications and articles cover a wide range of topics, including business, fi nance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclu- sively in The Times and The Sunday Times as well as online at raconteur.net. The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced with- out the prior consent of the Publisher. © Raconteur Media Design Joanna Bird Sara Gelfgren Kellie Jerrard Harry Lewis-Irlam Celina Lucey Colm McDermott Samuele Motta Jack Woolrich Head of production Justyna O'Connell Head of design Tim Whitlock Managing editor Benjamin Chiou Associate editor Peter Archer Deputy editor Francesca Cassidy Digital content executive Taryn Brickner Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 8616 7400 or e-mail info@raconteur.net. Raconteur is a leading publisher of special-interest content and research. Its pub- lications and articles cover a wide range of topics, including business, fi nance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclu- sively in The Times and The Sunday Times as well as online at raconteur.net. The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced with- out the prior consent of the Publisher. © Raconteur Media Design Joanna Bird Sara Gelfgren Kellie Jerrard Harry Lewis-Irlam Celina Lucey Colm McDermott Samuele Motta Jack Woolrich Head of production Justyna O'Connell Head of design Tim Whitlock Managing editor Benjamin Chiou Associate editor Peter Archer Deputy editor Francesca Cassidy Digital content executive Taryn Brickner Publishing manager Reuben Howard Matthew Staff Former editorial director, he is now applying his multi-sector B2B experience across numerous industry titles. Azadeh Williams Business, technology and marketing journalist, she is founder of communications consultancy AZK Media. Grant Thornton 2019 Data analytics Business strategy Operations management Technology acquisition 55% 40% 36% 34% 0 3 / 1 1 / 2 0 1 9

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