Are CFOs updated with the demands of upgraded functional structures? – Versutus perspective

Has today’s finance made it mandatory for the CFOs to rethink their traditional approach? How is it that CFOs are responsible for finding out of box solutions for the booming startups? 

In today’s digital organizations, CFOs are fighting to break barriers and make organizations more adaptive towards the digital transformation of the finance structure. As CFO we have started working and spending more time on digital trends than the traditional finance system. One such apparent outcome due to this ever-changing digitalization scenario is the evolution and inheritance of the Virtual CFO for potentially successful businesses.

Ideally, we are much more responsible for creating futuristic goals for organizations in terms of creating potential strategy, value creation, focus on the company’s pitfalls, external synergies and incentive plans to support the business objective. As finance chief, we admit the ideal roles we play have changed our perspective and prioritize in the business relationship for over the years now. 

How we have started embracing digital transformation? 

As we are completely aware, the company’s data is the master of all, but the non-financial responsibilities mainly related to technology have put us ahead of time and explored innovative methods to make decentralized decision making. 

So let’s prioritize using digital technologies (data visualization tools, business intelligence stats, advanced analytics, and more) to current strategies, needs, capabilities, existing technologies, and skillsets to establish standardized mechanisms across all channels of the organization. 

For instance, at Versutus we have identified several aspects of a virtual CFO’s functions that are bound to be digitalized, and we have put in place roust checks to ensure that we evolve as a digitally looked-up company.

Most virtual CFOs today are aware it’s no longer enough to play their traditional role. Instead, for these CFOs professionals to deliver value as their duties evolve, the results suggest that they must build skills in other areas of the business, play a more active leadership role, and rethink their usual approaches to overcoming external pressures and finding new investment opportunities.

In a recent survey, we have realized that more time on strategic leadership has taken CFOs ahead the world over, and the scope of functions has created more value than the traditional finance work. And also like our clients, many corporations have made us believe organizations create values and different capabilities around them with the digitization of business activities. 

How do we find value through advanced analytics? 

Many multinationals and several tech-based startups have invested immensely in developing a quick adaptive nature to inherit the advanced technologies into the work culture; this practice has been rapidly increasing in the recent past. Everyone carries the same aim in adapting towards advanced analytics which is to get the precision right on reports and make healthy and informed decisions across the segments of the organizations. 

As digitalization has completely set into the market, it is safe to conclude that data democracy has been ruling the business information and has made the right kind & type of data available anytime, anywhere, and to anyone, while the data demand from different industries has also been increasing, and shall never become less. 

The advanced analytics in the life of a virtual CFO, right from identifying duplicate expenses and invoices, through connecting the terms of procurement and payment schedules for a good or service to ensure taping any possible opportunities to apply discounts, has been instrumental in the growth and sustenance of the organizations as a whole. 

The scopes of improving demand forecasting through advanced analytics on internal customer data with external data sets, such as stock prices, revenues, weather, exchange rates, and business-cycle indices, to generate forecasts for specific regions and SKUs stand tremendously boosted. This way the organizations can examine whether existing forecasts are accurate or they need a recalibration, and then react accordingly.

We at Versutus, as Virtual CFOs, create better tactical decisions with advanced analytics tool which gathers all the required information from the internal as well as the external sources of the organization and analyzes the data on the basis of macroeconomic factors, geographic factors, demographics, and other variables and we support bridging of the cross-functional collaboration between technology and business operations teams.

To reap all the possible benefits from the digitalization process, we choose to break the taboo of relying just on basic financial controls and see forward through:

• Keeping cash scare, while at the same time remaining liquid
• Meets time and cost goal 
• Maintains pipeline of CAPEX 
• Tracks growth, returns, and cash flows
• Sets CAPEX Budgets and targets
• View all projects in an innovative way 
• Use Comparable project performance metrics. 

Further, as strategic CFO, we are well placed to ensure that the capital budget is consistent with an overall strategy for the use of cash, informed by the knowledge of capital requirements on current/future projects, balance-sheet, and cash-flow constraints. The impact can be substantial, especially at companies managing hundreds of capital projects every year. Taking a more disciplined approach will bring independent challenges to support and manage the capital portfolio.

To Conclude 

For the CFOs who lead, the change towards digital transformation has a higher opportunity to shape the evolution of a company’s future. As the process always carries a few flaws, it’s better to have human touch on every assessing strategy. The market has got a wide range of tools that can help finance leads benefit from big data and the digitization of finance processes. 

Since the hats are getting bigger and bigger to better focus on the end-to-end management, the investor confidence and value capture should go beyond traditional synergies and veer toward meaningful transformation, with the CFOs resorting to digitalization means.