The majority of Australian finance leaders believe the industry needs a new breed of CFO, according to a new report.
Sage, the market leader in cloud business management solutions, has revealed the Australian findings of its The Redefined CFO study, also known as CFO 4.0. Gathering insights from close to 2000 respondents, the global report looks at how finance leaders today take a more holistic approach with a reliance on data to engage with the wider strategic priorities of their organisations.
According to the research, over the last 12 months, Australian CFOs have seen increased responsibilities in identifying strategy & future planning (80%); digital transformation (80%); and diversity, equity, and inclusion (DEI) initiatives (78%).
Stepping out from the shadow of the CEO, the CFO has become a hub of business information - diversifying their expertise, recruiting the right talent, and ensuring they implement emerging technologies and purpose-driven programs to keep their organisations ahead of the curve.
According to the study, three key CFO personas have emerged: Chief Facilitative Officers, Chief Fairness Officers; and Chief Future Officers.
Chief Facilitative Officers are expected to champion digital transformation, and believe that technological, global and internal issues are holding their organisations back; Chief Fairness Officers understand that a business is defined by its people, not its profits; and the Chief Future Officer is focused on business continuity, propelled by the awareness that today’s fast pace of business means companies cannot simply react.
"Financial leadership today is the most diverse it has ever been," says Jonathan Howell, Chief Financial Officer, Sage.
"As they evolve, CFOs must blend attributes that allow them to engage in cross-functional decision-making, operate with purpose and future-proof their organisations," he says.
Mastery of technology key in new breed of CFOs
The study found that technology continues to shape the responsibilities and success of CFOs.
Some 93% of respondents said that CFOs must have the skills necessary to push their organisation forward in its digital transformation. To meet the demands of today’s constantly evolving business landscape, the research found that CFOs have embraced non-traditional skills and responsibilities. Among the top three priorities for Australian CFOs are integrating emerging technologies such as AI and machine learning (15%); the upgrade of software and technology solutions to drive digitalisation (14%); and hiring new talent (14%).
CFOs identify the ability to respond and integrate new and emerging technologies as the single greatest issue holding their organisation back. These technologies are perceived to be key in creating or maintaining a competitive advantage (44%); financial forecasting (42%); and business-wide trend forecasting (41%).
The study also revealed that finance teams are now prioritising technology skills over financial experience in recruitment, and it is impacting the hunt for new skills. 38% of CFOs are looking for professionals with financial expertise but plan to train them on using big data or AI; and 34% seek those with coding experience.
In Australia, 85% of CFOs also expressed ambitions to eventually become CEO of their organisation. 58% feel that CFOs could perform the job of CEOs.
"CFOs now have a bigger seat at the table, and increasingly, we are seeing that they are owning a lot of the organisation’s technology journey,” says Justus Siage CPA, Solutions Engineering Manager, Sage Australia.
“They have very specialised skills in financial modelling and return-on-investment (ROI) analysis, compared to other areas of the business," he says.
Pezh Moradi, Chief Operating Officer, McArthur, adds, "Generally speaking, organisations are seeking modern CFOs who are more conversant with technology. From numbers and reporting, we are seeing a movement to CFOs being more tech-savvy.
“And with technology taking away a lot of the administrative burden of CFOs, they are able to build on softer skills such as leadership and coaching, focus more on hard skills such as business intelligence (BI), as well as the various personas highlighted in the Sage study," he says.
Purpose and people ahead of profit
Organisations are also prioritising people and empathy in business decisions. Forty-eight percent of respondents feel that the finance industry needs more Chief Fairness Officers.
Eighty percent of financial decision makers are encouraged by their organisation to prioritise people, account for empathy and understanding when making business decisions (77%) and put purpose over profits (76%).
In Australia, 45% of CFOs aspire to be Chief Fairness Officers, striving to be empathetic and taking steps to nurture their organisations’ employees. This finding aligns with the global trend of an increased awareness of employee wellbeing and equality in recent years, signifying a new era of the future of work.