CFOs urged to think beyond the spreadsheet

60 per cent of CFO respondents planned major changes to respond to the changing economic climate. Photo / Supplied

Chief financial officers need to evolve their role in the wake of the global crisis, management experts say.

Cliff Brown, of financial risk management advisers Bancorp Treasury Services, said CFOs could no longer afford to simply play an administrative and accounting role.

"Nowadays they have an important strategic role to play in creating value for the business."

Internal communications between the CFO and other departments were critical in today's economic climate.

"One of the things we are constantly pushing with our clients is that internal communication, and making sure that regular updates on forecasts are coming into the treasury from buyers and the salesmen out in the field."

Brown added that communication was a two-way street, and CFOs needed to communicate more effectively with the rest of the company and become "the strategic financial information conduit to the board, the CEO, executive management and external stakeholders such as funders and shareholders".

"Modern CFOs should be regarded as chief executives' co-pilots, rather than being seen as akin to ground staff quietly beavering away behind the scenes.

"It's easy for CFOs to get tied up in the monthly reporting cycle's endless number crunching without having ample time to step back and look at the organisation's financial risk management big picture."

Companies also needed to ensure their CFOs had the necessary skills to deliver value to the business, Brown said, which might include heading back to the classroom and gaining qualifications beyond traditional accountancy.

Asked what CFOs would think of his suggestions, Brown said: "I think they'll see it as an opportunity, really. They've spent the last year-and-a-half to two years firefighting."

Gary Obbes, financial management consulting head for IBM New Zealand, said he was surprised by how much Brown's comments reflected the findings of a study by his organisation.

IBM's Global Chief Financial Officer Study, which canvassed more than 1900 CFOs worldwide, including 88 across New Zealand and Australia, found improving "business insight" had become a top priority.

Just 50 per cent felt their financial organisations were effective in providing the business insight required to support broader growth in enterprise.

"We saw a correlation [in the study] between outperforming organisations and those organisations who operated their finance functions efficiently and had more evolved business insight."

Obbes said 60 per cent of CFO respondents planned major changes to respond to the changing economic climate.

He agreed that CFOs needed to expand their capabilities away from the spreadsheet, even if that meant going back to university.


CFO Survey

* 50 per cent of CFOs felt their finance organisations were effective in providing necessary business insight.

* 60 per cent indicated they were planning major changes in their organisations in response to a changing economic climate.

* 75 per cent of respondents indicated there was a need for faster decision making in their organisations.

* Analysis of Australasian CFO responses indicated "finance efficiency" and "business insight" were the two primary qualities associated with the best-performing companies.

Source: IBM's Global Chief Financial Officer Study