The role of chief financial officers (CFOs) has undergone a significant transformation over the years. And now, with AI in the picture, the role is changing massively. Traditionally viewed as the gatekeepers of accounting and bookkeeping, CFOs are now emerging as strategic catalysts, leveraging data and technology to drive organisational growth and innovation.

Shipra Sooden, client partner at Fractal, provides valuable insights into this shift, highlighting the pivotal role CFOs play in today’s AI-driven world.

The Evolving Role of CFOs

Sooden emphasises that CFOs are no longer confined to traditional financial roles. “Earlier, their role was mainly restricted to accounting and bookkeeping. Now, it’s all about data. CFOs are the data custodians, sitting on a wealth of information that can be leveraged to drive business growth,” she explained. 

This shift in focus from mere number-crunching to strategic decision-making positions CFOs uniquely within organisations. They have a comprehensive view of how various decisions impact the overall business performance, enabling them to engage in strategic conversations with other leaders.

When asked about the balance CFOs must strike between financial prudence and fostering innovation, Sooden noted, “CFOs are uniquely positioned to run these innovations or experiments because they have all the possible information within the organisation.” 

By promoting a culture of data-driven decision-making, CFOs can allocate the right resources and funds needed to train and build a culture of innovation.

Sooden shared an example from a CPG organisation where the CFO played a critical role in managing profitability and improving margins. “We worked with multiple CPG organisations to solve the issue of profitability and improving margins. One specific problem was understanding the performance in terms of margins and identifying options to enhance profitability,” she said.

The CFO-led initiative involved running multiple MVPs (minimum viable products) across different markets to bring all information together and create a global version of P&L (profit and loss). This allowed them to identify the most profitable segments and establish strategic partnerships.

Measuring Success

The transition from traditional finance roles to strategic ones is not without challenges. According to Sooden, the biggest hurdle is often resistance from within the organisation. “People are in their comfort zone and are very comfortable with Excel reports. They don’t want to move to a new system because they don’t understand what is happening at the backend,” she said.

This resistance can hinder the adoption of new technologies and innovative practices. Additionally, selecting the right technology and ensuring proper training are crucial steps in overcoming these challenges.

Measuring the success of investment initiatives and strategic projects is essential for CFOs. Sooden highlights its importance, saying: “ROI is critical, and it has to be both economic and people’s benefits. For instance, productivity improvement can be quantified by the hours saved and converted into dollar value. Faster and more accurate decision-making also leads to financial benefits,” she explained.

She further added that during the initial stages of a project, a detailed process mapping is conducted to understand the current processes and identify areas for improvement. “We collaborate with the business to understand the existing processes and why we want to solve them. Then we convert them into measurable value, taking sign-offs from the business to ensure alignment,” Sooden said.

CFOs are Turning into Chief Growth Officers

Driven by rapid technological advancements, Sooden sees the role of CFOs evolve further in the future. “Every day, something new is coming up in AI. It’s important for CFOs to stay updated with industry trends and market developments. This is not just about finance but everything happening in the industry,” she advised.

To stay relevant, CFOs must embrace continuous learning and adapt to changing dynamics. Sooden underscored the importance of understanding the broader implications of technology on business operations. 

“The role of CFOs will increasingly involve leveraging AI and other advanced technologies to drive strategic decisions. This requires a shift from traditional roles to becoming strategic leaders within the organisation,” she concluded.

By leveraging data, promoting a culture of innovation, and staying updated with technological advancements, CFOs are uniquely positioned to lead their organisations into the future and would be eventually known as ‘chief growth officers’.

As Sooden aptly puts it, “The shift from accounting and bookkeeping to strategic leadership is not just a change in role, but a change in mindset, enabling CFOs to drive meaningful business growth in the era of AI.”

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