The Agile CFO: One Approach to Uncovering Success in 2023 and Beyond

For businesses of all sizes, the pandemic was a defining moment – labor shortages, operational issues, and supply chain delays presented new challenges for those trying to stay ahead of an ever-changing economic landscape. And while executive decision-makers at many business met the moment by embracing change, some CFOs found themselves hampered by the stay-the-course approaches of days past. 

If there's one thing leaders have learned from the pandemic, it's that the traditional ways of doing things often no longer work as planned, and a fresh approach to problem-solving and decision-making might just be the fix they need to press forth. For CFOs, this means considering an agile philosophy.

Agility is often reserved to describe nimble processes or companies comfortable with "failing fast." For the modern CFO, it means reshaping their role to be both strategist and collaborator, connecting various departments and the C-suite to maximize revenue opportunities. CFOs still have to keep the books, but they may also find ways to streamline systems with technology like artificial intelligence (AI) and process automation, potentially freeing up time for product teams and developers to drive innovation. 

What Does It Mean to Be an Agile CFO?

Previously, many CFOs relied on historical data to forecast what would happen in the future – a tried-and-true best practice that worked when economic and business environments enjoyed more predictability.

Today, as technological evolution and economic uncertainty cast a cloud over businesses of all sizes and across all industries, CFOs have the opportunity to do near-constant scenario planning. Agility, both in strategy and execution, can be mission-critical. Done well, it can allow you to plan for the unexpected without sacrificing growth or a long-term vision for success.

One avenue to becoming agile and decision-ready is digital transformation. For many, this engine of agility establishes a framework for the use of new tools and technologies that enable CFOs to reimagine their operations, processes, and products to serve customer needs better and keep up with competitors.

Powering Growth in the Agile Age

Technology such as automation – used for routine processes like accounting and reporting – and AI are helping companies operate more nimbly, cut back on labor-intensive tasks, and lower operational costs. According to a 2021 Forbes Insights survey that surveyed 508 finance, procurement, and payment executives, 61% of executives reported that they believe digital payments solutions will lead to better customer experiences. 

While growth in the agile age will likely be powered by technology, it may also rely on the CFO’s ability to understand and embrace an ongoing and seemingly endless flood of data. CFOs who embrace this change may be expected to execute data-driven decision-making to enable agility and a continuous cycle of planning, modeling, and forecasting. This, in turn, may allow them to overcome unexpected challenges and grow despite uncertainty.

Using AI to power everyday tasks and sift through data to reveal new insights for growth isn’t limited to large organizations, either. Thanks to AI's greater affordability and accessibility, small and midsize businesses also can use it to make their businesses more aware, agile, and proactive.

Put simply, AI and related machine learning solutions provide the data needed to meet rapidly changing industry demands and capitalize on new opportunities. Think of digital transformation in general, and AI in particular, as your potential bodyguard against disruption and market upheaval.

As essential as AI-driven data is to agility, it’s not the only area where CFOs will be investing their resources:

• Cloud Adoption: Both automation and AI depend on the cloud, largely because cloud infrastructures are inherently resilient, highly automated, and responsive. Cloud systems can be “rented” vs. buying hardware that becomes outdated, thereby limiting potential risks from services that lock in architecture and potentially hamper growth. This means you can quickly scale to accommodate growth in operations, market expansion, and new offerings.
• Cybersecurity: Remote workforces are not the exception anymore, which complicates normal data security and IT controls and increases the chances of an accidental leak or malicious attack. Companies may need to invest in more secure networks and institute safeguards, such as stronger password protocols and anti-virus software.
• Hiring: CFOs will need fresh tech skills in new hires to enable tech-powered growth. This means navigating a host of new challenges, including managing a team you’ve never met due to virtual work, navigating labor shortages, and investing in tech talent both in your domestic market and globally. Companies who resist becoming “remote-friendly” may find themselves at a disadvantage when trying to attract talent. 

What Might the CFO of the Future Look Like?

The need for agility may just turn CFOs into CGOs – “Chief Growth Officers.” Growth, not just budget management, may fall under this new CGO's responsibility. This may mean:

• CFOs will be investment supporters for marketing technology and marketing infrastructure, including “test-and-learn” programmatic experimentation, channel expansion, and other growth-focused initiatives.
• Both CFOs and CMOs have synergistic goals and priorities and will be of a similar mind when it comes to the importance of serving customers, creating brand awareness, hiring the right talent, and driving insights from data.
• CFO roles will be more demanding and challenging in the future. Diverse skill sets beyond finance, such as in business management or technology, can only help make the modern CFO even more essential to their organization's success.

Skills of the CFO of the Future

CFOs who embrace roles beyond finances may drive profound impact by owning a comprehensive picture of the whole business and its industry. A handful of these skills may include becoming:

• “Horizontal” thinkers: CFOs who work in more direct collaboration with other business units beyond traditional boundaries.
• Data drivers: CFOs who possess an interest or level of comfort in data analysis and analytics.
• External champions: CFOs who can orient themselves toward external-facing goals like customer satisfaction, forward planning, and data analytics.

Challenges Facing the Modern CFO

Many CFOs who embrace the agile philosophy may find themselves well-positioned to lead innovation and growth strategies in 2023 and beyond. And while some challenges remain, many CFOs are using technology such as automation and AI to limit risk and embrace the practice.

For example, international expansion and diversification is not only helping some companies mitigate risk but also unlocking new sales opportunities. This approach may reveal opportunities to better compete for talent as access to diverse global talent is one potential avenue to explore if markets tighten further.

Outsourcing May Help Keep Prices Down

A multitude of flexible online and real-world services and solutions increasingly allow companies to purchase goods and services on demand, using a “pay-as-you-go” format that helps manage costs down to the moment. A seemingly endless stream of mobile apps, online gig economy sites, and digital marketplaces can now connect you with freelance providers in minutes.

Likewise, a rising number of “no-code” solutions can help create everything from social media promotions to custom smartphone applications with no technical skill or training needed. It's even possible to buy artificial intelligence routines and digital chatbot assistants smart enough to pass for human service representatives.

Welcoming the Agile Age

The pandemic and its aftermath taught us how quickly the world can change. What was a priority for CFOs before is much different than what is called for today.

Industries have moved on from performance alone, with some trading blind growth for efficiency. Businesses today are finding value by building flexible, scalable, streamlined ecosystems built for diverse workloads and use cases. These approaches to business represent a new way of embracing agility, which, when extended to CFOs, can reshape how they view and fill their roles in their companies now and beyond. 

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