Speed matters in any business function. But for today’s CFO, who is making billion-dollar decisions on a weekly or daily basis, there’s a chasm that grows by the minute between those who harness speed and those who can’t.
Organizations that embrace a new paradigm of breakthrough speed—with faster, data-driven decisions, better collaboration and new skill sets—have an opportunity to generate significantly higher value. And CFOs report that they are positioned to lead their organizations toward faster decision-making through an enterprise-wide digital transformation.
Our latest study of the role of the CFO revealed that S&P 500 companies in a broad range of industries could increase their EBITDA compound annual growth rate (CAGR) up to 6.9% over the next three years if they make this transformation. We also found that they could increase their revenue CAGR up to 3.0%.
Creating value through the strategic use of technology
In the past two years, many CFOs have implemented digital technologies throughout the finance function.
It’s not just a matter of using technology to move faster, though. It’s about a digital transformation to gain better data-driven insights and higher fidelity of predictive forecasting. And most CFOs have not yet effectively harnessed that kind of transformation.
Harnessing speed requires greater collaboration across the enterprise. Moving collectively has been and will continue to be a key part of the work of CFOs. A full 86% of CFOs have increased their frequency and scope of collaboration across the C-suite.
CFOs are more focused on setting the future direction of the business. Some of their initiatives outside of the finance function include creating new business models and revising strategy. In addition, CFOs face a golden opportunity to lead as their enterprises face complex issues, including security and environmental, social and governance (ESG) challenges.
Speed within reach
Many CFOs acknowledge the opportunities that speed and technology present: insight-driven decisions and new business opportunities.
But there’s also a large gap between what finance leaders say they want to accomplish and what they’re able to do in terms of accelerating their predictive ability and expanding their influence.
In organizations that far exceeded revenue growth expectations over the past year, CFOs have occupied new and expanded roles: economic guardian, architect of business value and catalyst of digital strategy.