How has the role of the CFO changed and what does that mean for finance leaders looking to create long term value for their organisations?
CEOs, boards and businesses are demanding more from their finance departments. Deloitte's Finance 2025 Revisited study, found that there’s great promise for finance organisations to create more value for their companies. The role of finance is going beyond the numbers and embracing the shift from business partner to value partner.
From a tech perspective, in the past, ERP systems were built to track value and not to handle the value drivers that we see today. Ninety percent of the value that's being created now comes from intangible assets – an organisation's people, brand names, customer relationships and social and intellectual capital. According to Ocean Tomo, in their market value study, intangible asset value has dramatically risen from 17% in 1975, to 90% in 2020. The pandemic further accelerated the rise and the trend towards the growth of intangible assets as a percentage of total assets is now more than 90% of the S&P 500 Index.
What’s holding finance leaders back and what should they be prioritising to help them become value creators for their organisations?
Experienced financial professionals already know that change is needed. They also know that the shift from traditional finance steward to value creator can be hard to achieve – providing strategic insights for value creation with fragmented, poorly integrated data can be almost impossible. CFOs aren’t able to support changes in their businesses or industry because their systems are rigid and their processes are calcified. They also need to be confident they have the right team in place with the necessary skills to take the business forward.
We’re now living in a world where finance can track value and have the insights to predict where you're going and to enable you to respond to changes proactively. With the right tool, finance has the adaptability to pivot quickly so you can capitalise on emerging opportunities in your markets. Finance employs the talent needed to execute its mandate to support strategic business objectives and drive value creation.
The good news is there’s a real appetite for change. Research shows that digitising and transforming ERP is now a high priority for CFOs and CIOs. According to Gartner, 82% of CFOs report their investments in digital are accelerating. And in 2021, CIOs said ERP was one of the top three software spending priorities, coming second only to analytics.