Finance4Future - The transformation of the CFO

The role of the CFO is changing

The role of the CFO has changed fundamentally in recent years: from operational manager to strategist within the company. The CFO in transition is therefore a valuable sparring partner for the CEO, the sales department for pricing, for the entire supply chain and therefore also for many management issues.

This change will continue to shape the tasks and role of the CFO in the company in the coming years.

Figure 1: The role of the CFO (Source: WIKA/D. Fellermann/21.09.2017 supplemented by Rödl & Partner 07.10.2022)

Qualified data leads to qualified decisions

But how can it be ensured that the CFO's tasks shift from information procurement and provision to decision support? The basis for this is qualitative data in the company, which is stored in various places and ultimately used to support decision-making.

While the processing of this data has long been carried out manually by the area for which the CFO is responsible, the increasing and, above all, challenging digitalization (see our “ House of Finance” on the challenges of digitalization for the CFO) is leading to the automation of manual and repetitive tasks through digital solutions. The basis - qualitative data - remains irreplaceable.

Rödl & Partner has therefore developed the CFO pyramid based on the knowledge pyramid according to Bodendorf and Aamondt/Nygard. This shows in successive steps how qualified data leads to qualified decisions.

Figure 2: CFO pyramid (Source: Rödl & Partner/2022)

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How does the CFO pyramid work in practice?

The CFO pyramid is a methodical approach that structures the path from data collection to decision support. The central aspect is the hierarchical structure, meaning that topics such as machine learning or AI can only be tackled in a meaningful way once the underlying levels have been properly mapped in functional and technical terms.

Digitalization tools such as data warehouses, RPA (robotic process automation) and machine learning - to name just a few - are the tools used to implement and use intelligent process automation.

Figure 3: Automation of the CFO pyramid (Source: Rödl & Partner/2022)

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Accompanying change together

In many conversations with experienced CFOs, auditors and SAP consultants, we repeatedly find that the opportunities for optimization and therefore digitalization are not yet being implemented to the extent that they could be.

Only through digitalization can the CFO create agility in the financial processes during change and implement data-based, rapid decisions in the company that quickly lead to further success in the company. If you manage to see repetitive tasks as a process and replace them with digital solutions, you will gain time and thus create the necessary resources for important supporting activities in the areas of finance and controlling.

The CFO pyramid forms the basis for this. In further discussions with you, we will discuss how you can shape the transformation of the CFO.