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The strategic CFO

5 min read

Modern Money

CFOs increasingly help organizations make business decisions outside the finance arena, stepping beyond their traditional role to partner with other executives on strategy and long-term planning.

For many CFOs, the transformation from scorekeeper to strategic partner requires more than a paradigm shift — it requires a major step forward in data-analysis capabilities and cloud-technology adoption. Predictive analytics and flexible modeling with new cloud technologies, combined with the pervasiveness of Big Data, are interesting new challenges for CFOs who have been in the weeds dealing with regulatory compliance since Sarbanes-Oxley arose in the early 2000s.

Strategic thinking is ingrained into most CFOs’ DNA, and it’s time to push that thinking to the forefront while scaling the business, growing revenue and keeping tabs on all the moving pieces. Here are four lessons that have served me well during my career and remain relevant as the role of the CFO continues to evolve:


1. Master the fundamentals first

Today, most financial departments have their compliance issues in check and are instead focusing on using data and technology to move quickly. Regardless of the situation, it’s crucial to establish a solid foundation before building beyond it. The basic infrastructure of general accounting, transaction processing, financial reporting, tax and compliance, and cash management should be humming smoothly before finance attempts to tackle broader operational or strategic initiatives.

Once these core financial systems are in place, the CFO will be better positioned to lead operational work, strategy and higher level business discussions.

2. Build a strong partnership with the CIO

Finance and IT must work closely together to use technology most effectively and encourage efficiency across processes and resources. In particular, the CFO can benefit from the chief information officer’s knowledge of emerging technologies and understand true return on investment.  Meanwhile, the CIO can benefit from the CFO’s view of the company’s business model, revenue and future direction. The CFO should also play a key role in data standardization and definition, helping the CIO ensure cross-functional data standards.

At my current company, Invoca, we use many cloud-based applications across the financial organization as well as sales, marketing, development, and product management teams. We recently invested in a state-of-the-art business-intelligence tool that enables us to gather disparate data across all our applications, with actionable reporting and analysis that helps us optimize our investment decisions.

3. Embrace the cloud

As companies add more applications to their infrastructure, business-information tools will have to gather data from various internal and external systems. Cloud-based tools will become a necessity rather than an option — even for the finance department. Despite some common perceptions, moving to the cloud can actually enhance a company’s data security. It’s key to work with secure cloud providers (including SAS 70 Type II Audit certification, EU-US Safe Harbor certification and compliance with PCI DSS).

Cloud-based financial management applications help streamline and standardize internal and external processes. At Invoca, we use cloud-based and mobile-friendly tools for expense reporting, procure-to-pay, payroll processing, CRM, banking and cash management, in addition to our core financial systems. Not only does this increase the speed with which data can be accessed and reduce the internal costs to support transaction processing, it also provides the agility to quickly respond to changing organizational and market needs.

4. Get smart about predictive analytics

Analysis is inherent to finance, but today, the CFO must gain insight into much more than financial data. The ability to understand customer behavior, social media insights, vendor trends and other insights can bring a rich perspective to strategic financial planning. The challenge is to distill a vast amount of data into actionable insights, patterns and predictions. Technology is instrumental when analyzing massive amounts of data from different sources, then taking action based on those insights.

We recently acquired a cloud-based business-intelligence tool that allows us to gather data across Salesforce, marketing automation, financial, call intelligence, our own customer activity, Web search and social media analytics and other tools. This nearly real-time visibility into data across our Invoca universe allows us to model predictive scenarios around how, when, and how much to optimize our planned investments into any customer segment, and when to decrease our investments in others. The ability to make sound decisions at light speed is critical for us as a SaaS company.

As technology accelerates the pace of change across all job functions, the role of the CFO will continue to become more integral to executive strategy discussions. No other function within a company has the scope of being able to see across the organization, analyze historical trends and make informed predictions about economic value. It’s time for CFOs to adjust their job description — and for the rest of the C-suite to take note.

Cynthia Stephens, chief financial officer at Invoca, has over 25 years of executive financial management, operational and strategic advisory experience in a variety of private and public technology companies. Most recently, she was senior vice president and CFO for Harvest Power, a venture-backed renewable energy company, which grew 100% annually to more than $100 million in revenue and achieved its first positive annual EBITDA during her tenure. She was previously CFO for Infoseek.