Over the past decade, the CFO role has undergone the most profound evolution in responsibility of all the C-suite roles. The impact of this transformation is far-reaching. In fact, I would argue that harnessing this change is essential for companies to seek their digital agendas and become more intelligent businesses. Let’s break it down here.
From accountant to business partner
Findings from a recent Accenture survey of CFOs tell the story. Consider that 81% of CFOs see identifying areas of new value across the business as their primary responsibility. And an impressive 77% are leading efforts to improve efficiency with digital technology. This was unimaginable ten years ago.
The CFO has broken out of the back office with a remit that extends beyond the boundaries of finance. Say goodbye to the chief bean counter, and hello to the chief growth officer. Instead of focusing on rear-view-mirror financial analysis and forecasting, CFOs are combining data insights, digital technologies and analytical thinking to create future value for the whole enterprise.
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CFOs are saying goodbye to the back office and hello to the front lines of growth.
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Unlocking funding for growth
This repositioning of the CFO role demands more than targeting business transformation. It is about funding it too. CFOs do not have the luxury of never-ending cash. They need creative ways to fund massive investments in digital transformation, new product development, market expansion and more while maintaining and enhancing the core business. This is a daunting task that involves the delicate balance of keeping the lights on while simultaneously inventing the new light bulb.
One place where CFOs can unlock funding is Procurement, in source-to-pay in particular. For years, Procurement has generated savings to reduce the cost of operations, which is obviously a good thing. But there is more that can be done. By reinventing source-to-pay, the CFO can create significant savings to reinvest in other areas of the business—everything from M&A to new front-office growth.
The opportunity here is tremendous. For every $1 billion in addressable spend, enhancing source-to-pay with digital technologies can deliver $124 million in spend reduction. That’s 5x savings for reinvestment that can go beyond Procurement and Finance to seed the future of the business.
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Not theory, real results
Make no mistake. These savings are not some theoretical construct based on crunching the numbers in a perfect-world scenario. They reflect the kind of game-changing results that our clients across industries are experiencing when they reinvent the end-to-end source-to-pay process.
Companies are getting results even though the pressures they face are unique and their growth objectives are very different. For example, a consumer goods giant transformed source-to-pay as part of larger initiative to ignite growth and used the savings generated to develop new product lines. A commercial printing company reinvested savings to develop its digital business—an act of sheer survival in a digital world. And rather than reallocating dollars saved, a transportation manufacturer redirected resources to more strategic areas.
Identify. Achieve. Reinvest.
In working with the CFOs whose companies have sought successes like these, I find they all have made a critical mindset shift. Procurement naturally places rigor around identifying savings. But it often stops there. The reality is that identifying savings is just the first part of the CFO’s remit in this area. CFOs need to double down on verifying that the right policies, guidance and processes are in place for the company to actually achieve these savings. Then they should do their due diligence to make sound reinvestment decisions. Identify. Achieve. Reinvest. It is must-do trifecta for every CFO tasked with the driving the growth agenda. If you’re ready for the challenge, it’s time to start thinking about source-to-pay differently.