Thanks for stopping by this installment of “Being Planful,” our series recapping the latest CFO news for the Office of the CFO. We’ve scanned the headlines for trending topics relevant to the Office of the CFO and here’s what we found:
CFOs have long been pushed to drive digital transformation efforts. Being central to strategic planning and financial decisions gives the Office of the CFO an unmatched view of an organization’s needs, shortcomings, and opportunities to guide investments. Now CFOs are being pressured to look beyond just transformation and towards company-wide innovation.
Latest CFO news:
•CFOs should “rebrand themselves as innovation allies”, McKinsey suggests, and start creating innovation goals, measuring progress, and giving Finance more exposure to innovation efforts across the company.
•Gartner says CFOs should create tighter partnerships with their CIO counterparts to speed funding access and ensure adequate resources for digital efforts.
•Looking forward, CFOs should get more involved with, and educated on, organizational needs around things like blockchain, evolving operating models like gig workers, and how to adequately leverage growing mountains of data, according to Deloitte.
The Bottom Line: “CFOs who perpetuate the old mindsets and processes associated with innovation initiatives may put their organizations’ long-term health and viability at risk,” according to McKinsey.
Cybercrime is increasing and unending. It’s a constant battle for IT as criminals change tactics and develop new methods, yet many CFOs treat cybersecurity as just another budget line item to manage. But cybersecurity is about mitigation, so Finance should take a different approach when considering IT security budgets.
Latest CFO news:
•An Accenture survey of 500 CFOs and CEOs and 4,244 CISOs found that just 5% of companies have aligned cybersecurity with business strategy.
•Finance should consider that ROI isn’t really a viable metric for cybersecurity, since you’re spending to prevent losses. And the losses can be significant: the average cost of a cybersecurity attack in the U.S. is close to $9M, not to mention downtime and lost productivity, loss of customers, diminished brand reputation, and more.
•The CFO and CISO should have some frank conversations to educate Finance on the organization’s security posture, threats, and the potential cost of not investing more in cybersecurity.
The Bottom Line: “Cybersecurity spending needs to be treated differently. A million dollars saved now can easily cost $25 million later.” (CFO.com)
Speaking of innovation, there hasn’t been much in the realm of business KPIs over the past several decades. Revenue, cash flow, churn, customer acquisition costs—it’s the same old, same old. But modern KPIs like employee experience and customer engagement reflect today’s more digital and marketing-centric approach to business.
Latest CFO news:
•Leaders at “digitally advanced companies” say their finance and marketing teams have a high level of collaboration compared to digitally emerging companies, according to a survey by Google.
•It works both ways, however, as the Google researchers also say CMOs who translate marketing metrics into business impact are “37% more likely to report revenue growth” compared to CMOs who report in marketing metrics.
•Deloitte goes even further from typical KPIs by pointing to trust as a key performance metric: “(T)rust should be seen as a tangible, strategic, and critical asset, given the real, quantifiable value that it can bring to an organization.”
The Bottom Line: “KPIs need to reflect the modern technologies companies now have access to. Sticking with legacy KPIs could bring doom to processes such as digital transformation.” (Fortune.com)