For CFOs under pressure to become CVOs, how important is data?

Data has always been a key asset for Chief Financial Officers (CFOs), but in the era of artificial intelligence (AI) and machine learning, how much is our focus on timely, reliable data likely to grow?

AI isn’t about to take over finance leaders’ jobs - in fact, the opposite is true. Our research with the Association of Chartered Certified Accountants (ACCA) suggests that CFOs are likely to leverage AI as part of an ongoing evolution into a new kind of role.

The research - based on workshops with almost 100 senior finance leaders from organisations around the world - found that some CFOs are gradually finding themselves transitioning into Chief Value Officers (CVOs), an emerging leadership role with a broader brief beyond managing company finances.
 

“Organisations are increasingly being asked to consider, and to report upon, more value-centric aspects of their operations,” explains the report. “There is an increasing requirement being placed upon many organisations to report against non-financial aspects of their operations.” Chief Value Officer: The Important Evolution of the CFO ACCA

As part of this shift, finance leaders are facing pressure to integrate a growing range of business value drivers into their reporting and forecasting. Customer satisfaction, supply chain resilience, talent acquisition and retention — these are metrics that don’t have a direct finance component, but all have their own complex datapoints, and can significantly influence company success.

The IIRC’s International Integrated Reporting Framework outlines how corporate value is increasingly being seen in non-financial terms. It identifies six enablers of value: financial, manufactured, intellectual, human, natural, and social and relationship capital.

Each of these enablers has its own datapoints, metrics and reporting standards which finance leaders are having to grapple with. Tracking trends across multiple sources of value is a herculean task, and CFOs and CVOs will only succeed with the aid of data and technology.

Whilst there is a continual requirement for more data points from more sources, this is at its most useful to a business and the CVO if these data points can be efficiently coalesced and transformed, overlaid easily, and visualised in a quick and accurate manner.

Financial reporting is essentially a looking-back process, reviewing performance of a business after the event. In contrast, CVOs are being tasked with producing forecasts and proactively shape decision making. This requires a much greater reliance on real-time and predictive data, which is where tools such as AI will come in.

Increasingly, we’re likely to see several types of technology platforms being leveraged for success:

As finance leaders and businesses embrace a wider definition of value, their reliance on timely, accurate data is simply going to grow. The challenge faced by finance leaders is how to integrate diverse data handling technologies in an efficient manner. For some businesses, this expertise may exist in-house. However, many may need to look outside their organisation, calling on external specialists’ skills. Knowing when to seek the right IT advice will be vital for the evolution of the CVO.

Chief Value Officer: The Important Evolution of the CFO copyright © 2023 by the Association of Chartered Certified Accountants (ACCA). All rights reserved. Used with permission of ACCA. Contact insights@accaglobal.com for permission to reproduce, store or transmit, or to make other similar uses of this document.