• INSIGHTS

    #trends

THE CFO GUIDES MANAGEMENT INTO THE FUTURE

Companies are increasingly using new digital solutions to develop their business and optimize for the future. Central to this transformation is the CFO, whose role in top management has changed significantly. exactos survey shows that this trend will continue its upward curve.

 

Background

In the spring and early summer of 2023, exacto conducted a survey with the participation of CFOs and CEOs in 50 Danish companies. We did this to uncover the status of budget and forecast processes in 2023: How they are used to support management's work, and how companies expect to utilize the technological opportunities that support the processes in the future.

The results of the survey have now been analysed and compiled in a larger report, which is available for free download (in Danish only).

In this article, we focus specifically on what the survey revealed about the CFO's changed role in management, and what expectations CEOs and CFOs have looking ahead.

 

The CFO onto the growth track

Traditionally, the role of CFOs or financial officers in companies has been characterized as a recording and controlling one. Final accounts vs the originally set budgets, compliance with good accounting practice, etc. How the companies should act going forward, the strategic benchmarks, growth targets and identification of potential new drivers of growth or optimization of the company's operations were questions handled by the rest of the management team, who drew their conclusions from the submitted audits and then otherwise turned to other sources to find input that could qualify decisions for the future.

However, this has changed quite a bit in recent years, and the CFO has taken on a completely new role. According to partner in exacto - Peter Nørvig - this is in large part due to the fact that we have gained access to work with data in new ways:

"With the digital support which is available today; where you can relatively easy both extract, analyse and enrich big data as an integrated part of budgeting and forecast processes, the CFO has come into a position with significantly more to offer to the management team.

And the demand for this is steadily growing. We see that the forecast – often with increasingly shorter intervals – is taking on a more central role as an alternative to the traditional year-to-year budgets, where you do not get knowledge of the company's performance until the final consolidation, and thus – often too late – can make the necessary changes.

This new trend means that the CFO has a new role in the management team, since it is he or she who has both the capabilities to ensure that the company's digital setup is designed to collect the necessary data - and to do so with sufficiently short intervals – and subsequently interpret the derived results. With the benefit that, unlike before, the management team can continuously adjust or correct and thus calibrate the course, so that the company stays on track and delivers on the set KPIs.

This is what we experience in the interaction we have with our customers, which is also confirmed in our survey. The CFO uses and calls for solutions that enable him or her to do this. With the consequence that he or she can be included in the strategic work to a much greater extent and, on the basis of analyzes of the large amounts of data that have been obtained both internally and from relevant external sources, can contribute with qualified input that enables the management to make business-optimizing and -developing decisions", Peter Nørvig explains.

 

The survey confirms the observations

Peter Nørvig is continuously engaged in close dialogue with exacto's customers, and as he pointed out, his observations are confirmed by the survey. When asked to what extent they use insights from their solution for business optimization and strategic decisions, 13.1% of the CFOs who answered the question indicated "Very high" and 34.8% "High".

Of the CEOs who have answered the question, 33.3% state it as "Very high" and 33.3% "Medium".

 

The future of the future

The insights from the survey thus align with the experience Peter Nørvig has in connection with his collaboration with exacto's customers. However, this does not only apply to the current situation. Another point that Peter Nørvig makes is that we are probably only at the beginning:

"It is quite clear that both the CFOs themselves and the entire management group expect that the insights and the sparring that the CFO can contribute to will play an even more central role in the future, and that the demand for access to more and better digital support will grow. We see that our customers are becoming more and more ambitious regarding, for example, drawing data from several sources – both internal and external – which, when they mutually enrich each other, provide access to some analyzes and insights on everything from operations and performance to cost or revenue drivers. Analyzes and insights they have not had access to before. They get access to some new perspectives on their business and some new levers they can turn, which both optimize operations and performance here and now, but also provide a growth track for the future."

Again, it is not just a feeling that Peter Nørvig has. Among the 50 companies that participated in the exactos survey, 59.6% of the CFOs who answered the question indicate that in the future they will use insights from their solution for business optimization and strategic decisions more than they do today. 50% of CEOs estimate that they will.

 



CONTACT

Peter Jørgen Nørvig
Partner
Phone: +45 6179 8060
E-mail: pjn@exacto.dk

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Contact person: Peter Jørgen Nørvig
+45 6179 8060
pjn@exacto.dk

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