The role of CFOs has changed significantly in recent years. They’re no longer just managing the numbers, today’s CFOs are driving strategy, leading innovation, and helping steer their companies through unpredictable times.
With economic uncertainty and disruptive technologies shaking up industries, how finance leaders make decisions now plays a key role in shaping their companies’ futures and their ability to adapt and grow.
PwC’s June 2024 Pulse Survey highlights how CFOs are embracing this expanded role, demonstrating a proactive approach to technology investments, talent acquisition, and business performance. With a balanced focus on managing immediate operational needs while positioning for future growth, CFOs are helping their organizations navigate economic uncertainty, geopolitical challenges, and the ongoing digital revolution.
Balancing Short-Term Wins with Long-Term Growth
CFOs are walking a fine line between managing immediate performance and setting their companies up for future success. According to PwC’s survey, 58% of CFOs are spending more time on financial planning and business performance than they were a year ago. This increased focus on the fundamentals – things like compliance, risk management, and making smart capital decisions -reflects the pressing need for stability in uncertain times.
But smart CFOs know that it’s not just about playing defense. While they’re managing today’s challenges, they’re also looking ahead, investing in areas that will fuel long-term growth. They’re cutting costs where it makes sense, streamlining operations, and embracing technology that can help the business not just survive, but thrive.
With a clear view of the entire company, CFOs are uniquely positioned to balance short-term needs with big-picture strategies. They’re the ones ensuring the company stays financially healthy today while also laying the groundwork for innovation and future success. In a world full of uncertainty, their ability to juggle these priorities is helping their organizations stay resilient, nimble, and ready to tackle whatever comes next.
Technology Investment and Implementation: A Top Priority
PwC’s survey reveals that 58% of CFOs are spending more time on technology investment and implementation compared to last year. They understand that technology isn’t just an added bonus; it’s a necessity. For CFOs, embracing digital transformation is about more than just staying competitive; it’s about creating new opportunities for growth and innovation.
Technologies like artificial intelligence (AI) and automation of various business processes are now key to streamlining financial operations. AI, in particular, is changing the game in financial planning and analysis by offering CFOs tools for more accurate forecasting and complex scenario modeling. This enables them to anticipate market changes, predict revenue trends, and fine-tune cost structures, all of which contribute to smarter, more strategic decisions.
The rise of AI and automation is significantly transforming how finance teams operate, enabling them to drive performance across multiple dimensions.
- Enhanced Predictive Analytics
AI algorithms analyze vast amounts of historical data to identify patterns and trends. This capability allows CFOs to create more precise forecasts and conduct robust scenario planning.
For example, they can simulate various economic conditions – such as changes in consumer behavior, market disruptions, or shifts in regulatory environments – to see how these factors could impact their financial outcomes.
- Operational Efficiency
Automation is streamlining repetitive tasks like data entry, reconciliation, and reporting. By reducing the time spent on manual processes, finance teams can focus on higher-value activities, such as strategic analysis and planning.
For instance, automated reporting tools can generate real-time financial reports, allowing CFOs to monitor key performance indicators and adjust strategies swiftly.
- Cost Management
AI-driven insights help CFOs identify areas for cost reduction and operational improvement. By analyzing spending patterns and operational efficiencies, CFOs can pinpoint inefficiencies and recommend targeted actions to optimize resource allocation.
- Risk Mitigation
With AI, CFOs can better assess financial risks by analyzing vast datasets to identify potential issues before they escalate.
Advanced analytics can highlight discrepancies or anomalies in financial data, providing early warnings about compliance risks or operational inefficiencies. By acting on these insights, CFOs can enhance their organizations’ risk management strategies and ensure compliance with regulatory requirements.
- Improved Decision-Making
The combination of AI and automation equips CFOs with a wealth of information to support their strategic decision-making. Real-time data access enables finance leaders to present compelling narratives to their C-suite team, fostering collaboration across departments.
The survey also highlights the strategic role CFOs play in ensuring that tech investments align with the company’s bigger picture.
44% of CFOs prioritize using technology to cut costs over the next 12 months. With budgets often tight, finance leaders are under pressure to ensure that every tech investment delivers solid returns – not just within their own departments, but throughout the entire organization.
Whether it’s streamlining operations, improving the customer experience, or driving product innovation, technology is playing a central role in shaping the future of the business.
Economic Optimism: CFOs Less Concerned About Recession Risks
Amid ongoing discussions about economic volatility and the potential for a recession, CFOs appear to be more optimistic than many of their executive peers. According to the survey, only 8% of CFOs strongly agree that there will be a recession in the next six months, compared to 18% of all executives.
This cautious optimism may stem from the confidence CFOs have in the financial health of their companies, bolstered by cost reduction initiatives, strategic investments, and the implementation of efficiency-driving technologies.
While CFOs remain vigilant, they see opportunities for growth and reinvention even in uncertain economic conditions. They are using their unique perspective, rooted in a deep understanding of their company’s financial position, to advise the C-suite on areas where investments can drive long-term value.
Interestingly, CFOs are also less concerned about the challenges of extracting measurable value from new technologies than their peers. Only 31% of CFOs say achieving measurable value from tech adoption is a significant challenge, compared to higher percentages of other executives. This indicates that CFOs may have a more nuanced understanding of the ROI from technology investments, having witnessed firsthand how automation and AI can streamline operations, reduce costs, and enable faster, data-driven decision-making.
Talent Acquisition: A Key Focus for Finance Leaders
As CFOs work to enhance performance and drive technological innovation, they understand that attracting the right talent is crucial to achieving these goals.
The survey shows that 52% of CFOs believe hiring individuals with essential skills is critical to their success. Given the evolving demands on the finance function – such as an increased emphasis on data analytics, compliance, and automation – finance leaders are acutely aware of the need to assemble teams that possess both technical know-how and strategic insight.
With regulatory landscapes becoming more complex, alongside growing cybersecurity threats and advancements in financial technology, organizations must have skilled professionals who can manage finances while also contributing to overarching business strategies.
For CFOs, recruiting the right talent is not just about addressing immediate needs, it’s about cultivating a finance function capable of fostering long-term growth and resilience. This is especially important as CFOs expand their influence across the C-suite, collaborating more closely with the CEO, COO and other key executives on initiatives that extend beyond traditional finance, such as enhancing customer experiences and optimizing operations.
CFOs play a pivotal role in ensuring alignment across the organization regarding strategic funding initiatives. By promoting collaboration among departments, particularly with COOs on improving operational efficiency and with CMOs on delivering customer value, CFOs are breaking down silos and ensuring that all parts of the business are working toward shared objectives.
Notably, 33% of CFOs express a strong desire to broaden their influence across the C-suite, underscoring their evolving role as connectors and strategic advisors within their organizations.
What CFOs Can Do Moving Forward
The insights from PwC’s Pulse Survey underscore the critical role CFOs play in shaping their companies’ strategic direction. As they continue to lead through uncertain times, there are several key actions CFOs can take to ensure their organizations remain resilient and well-positioned for the future:
1) Concentrate on Financial Fundamentals
CFOs should continue to drive performance management, cost reduction, and financial planning efforts. Strengthening the company’s financial health is essential for weathering economic volatility and funding future investments.
2) Leverage Advanced Technologies
CFOs should prioritize technology investments that enhance predictive forecasting, scenario modeling, and operational efficiency. By using AI and automation, finance leaders can help their companies make more informed decisions and navigate market shifts more effectively.
3) Collaborate Across the C-Suite
As strategic advisors, CFOs should work closely with their C-suite peers – particularly the CEO, CIO, and CMO – to align on strategic funding priorities and drive initiatives that create customer value and operational efficiency.
4) Focus on Talent Acquisition
Finding and retaining skilled professionals with technical expertise and strategic insight is crucial for the success of the finance function. CFOs should prioritize building teams that can support long-term growth and drive innovation across the organization.
5) Stay Optimistic but Cautious
While CFOs may feel more confident than their peers about the economic outlook, it’s essential to remain vigilant and continue focusing on initiatives that strengthen the company’s financial resilience.
Final Thoughts
PwC’s Pulse Survey shows that CFOs and finance leaders are at a crucial turning point as they deal with economic uncertainty and fast-changing technology. More than half of CFOs are spending more time on technology investments and performance management, which indicates they are looking beyond short-term financial health to plan for sustainable growth.
As CFOs adapt to their new roles, they have the opportunity to create value through digital transformation and better decision-making.
This survey serves as a reminder for finance leaders to focus on the basics while staying flexible and innovative. By investing in the right technologies and skilled talent, CFOs can strengthen their organizations’ financial grounds and prepare to face future challenges and opportunities.
