THE CFO IN THE US. #CFOReimagined

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1 THE CFO IN THE US See how the new CFO is adapting to a changing financial landscape, utilizing transformative new technology to disrupt, innovate and generate value for business in the United States. #CFOReimagined

2 CFOs have a unique overarching view of the enterprise, which puts them in a perfect position to enable strategy and unlock new value. Contents Global message 3 Introduction 4 Leading value creation 6 through digital The last word on data 9 Going beyond real-time 11 shining a light on the future Conclusion and next 13 steps for US CFOs 2 The CFO Reimagined: United States

3 Now is a pivotal moment for CFOs. Our new research on the dynamic role of the finance function reveals how the CFO is positioned at the center of the organization, turning finance into an engine that can power the entire enterprise. CFOs have long been responsible for producing the numbers and managing technology costs. Today, they are continuing to push the boundaries of automation and are increasingly harnessing data to enhance analysis and generate insights. They are also looking beyond the borders of the finance function, proposing and shaping business models throughout the enterprise. Ideally, they are leading the charge in deciding how to invest in digital, guiding their organization into the next evolution. Based on a large survey of CFOs and up-andcoming finance professionals, as well as interviews with leaders from top global companies across multiple industries, the findings uncover the CFOs ambitions, priorities and obstacles. 1 The CFO has an expanded remit to: Create more revenue streams. Manage down total costs. Share insights across business functions. Advise the CEO. Improve risk and compliance. Increase enterprise value. Steward the digitalization of the entire enterprise. But CFOs (and the entire C-suite) must seize this moment. Many CFOs face significant challenges as they take on a broader role. Our research reveals how they can leverage technologies, skills and relationships to ensure their companies can transform and prosper. 1. Accenture carried out a quantitative survey of more than 700 CFOs and senior finance executives, including 198 from US businesses, as well as a separate survey of 200 up-and-coming finance professionals. We also conducted almost 50 qualitative interviews with CFOs, CEOs and CDOs. 3 The CFO Reimagined: United States

4 Recent years have been a positive story for US business. After a decade of sluggish performance, GDP growth is healthy, corporate profits have repeatedly exceeded 20 percent year-on-year growth, and there has been welcome stimulus from tax reform. There are some challenging times ahead, however. After a period of market turbulence, businesses can expect extreme volatility in the wake of quantitative tightening and an end to the current growth cycle. Most concerning of all, the escalating trade war is creating deep uncertainty there will be an impact on business, but its severity remains unknown. In this landscape, corporate leadership needs to define a compelling vision for the future. Across the US, investors are looking for assurance that recent growth can be upheld. They want credible strategies to generate new value despite changing conditions. And, as Accenture s latest research 2 illustrates, many will turn to the CFO with their holistic view of the enterprise for answers. Today s CFO is the chief value architect, says David Davidson, Managing Director, Accenture Strategy CFO & Enterprise Value. CFOs have a unique overarching view of the enterprise, which puts them in a perfect position to enable strategy and unlock new value. Digital technologies have disrupted finance, removing the bulk of transactional tasks, and given CFOs a more strategic role. They are leading their businesses more than ever before. 4 The CFO Reimagined: United States 2. Based on quantitative surveys with more than 700 finance leaders from around the globe (including 198 from the US) and 200 up-and-coming finance professionals. We also conducted almost 50 qualitative interviews with CFOs, senior finance professionals, CEOs, CDOs and Accenture thought leaders.

5 Our findings indicate that CFOs in the US are embracing their new roles and making progress in several areas that exemplify what finance can achieve in the digital world. As they do so, many are entertaining radical ideas for what is to come next 88 percent, for example, believe that digital will facilitate a rise in self-service reporting, eliminating the need for traditional finance stewardship. And the majority believe that labor-saving technologies will enable many, if not all, finance tasks to be performed without intervention from a centralized function. It almost sounds like CFOs in the US are planning to eliminate their own functions, notes Davidson. But it s actually more nuanced, and more exciting, than that. As finance becomes a capability, the CFO and his or her team are free to focus on enabling business strategy. Then they can focus on evaluating the ambitions of their peers and turning them into reality through a greater focus on planning, analysis and advising. And so, as US businesses approach uncertainty, where and how can CFOs create maximum value? Above all, we find them focusing on three areas: leading the charge toward digital-enabled growth and the realization of new business models, taking a leadership role in enterprise data, and shifting the mindset from reporting the past to evaluating the possibilities of the future. 5 The CFO Reimagined: United States

6 Leading value creation through digital The CFO s involvement in digital investment has transformed. Where once they were advisors to the business, now they are directing organizationwide transformation. Investing in technology is as much about sustaining value as creating it, explains Accenture s Davidson. As CFOs understand the economic rationale for technology, and have an enterprise-wide view of what is required, they are critical to digitalization. They work with the business to understand where digital technologies bring value and define the risks to be mitigated. 6 The CFO Reimagined: United States

7 FIGURE 1 Proportions of US respondents engaged in strategic, value-adding activities. Identifying and targeting areas of new value across the wider business ecosystem. 88% Exploring how disruptive new technologies could benefit the entire enterprise. 86% Identifying and targeting areas of new value across the enterprise. 90% Driving business-wide operational transformation. In the US, CFOs are at the vanguard of effective digitalization. Nine in ten (88 percent) respondents believe that they are best placed, of all executives in the C-suite, to pivot the organization to a new era of digitally-enabled growth. We see similar proportions engaged in efforts to drive operational transformation, use technology to enhance efficiency, and explore how disruptive technologies can create new opportunities across the enterprise (see Figure 1). What s more, they tell us they are achieving overwhelmingly positive results from their efforts to identify new value higher than their CFO peers worldwide. 87% Leading efforts to make the entire enterprise more efficient through adoption of digital technology. 87% 7 The CFO Reimagined: United States

8 The senior executives we talked to for this research suggest it is the CFO s broader view of business pressures that makes their contribution to digitalization invaluable. They also stress that finance involvement no longer ends when approval for an investment has been granted. The global controller at the US division of an international courier explains that he works with IT to establish thresholds and goalposts to continuously establish if the investment is still healthy for the company. Meanwhile, the US-based CDO of a global logistics business tells us that his CFO helps them make sense of the evolving top-line and bottom-line implications of an investment. Representatives from the finance team will be at weekly status meetings after approval has been given, he says. 8 The CFO Reimagined: United States

9 The last word on data One of the most instrumental drivers in the development of the CFO role has been the data-volume explosion across industry. By harnessing the power of this data, CFOs in the US are consolidating their position as strategic enablers of the business. CFOs are no longer simply the downstream recipients of operational data, says Accenture s Davidson, but also the translators of data that predicts future enterprise value. Today, the stories CFOs tell include, How will the weather impact sales of products? How can analyzing a hashtag improve quarterly forecasts? How might election results impact future profitability? In our survey, US respondents say they are receiving growing demands from other functions for insight into a wide range of data sets from financial data through marketing, risk and operational data and are generating positive outcomes from this activity. Almost nine in ten US CFOs (86 percent), for example, say they are best placed to deliver sophisticated insight through advanced analytics. 86% of US CFOs say they are best placed to deliver sophisticated insight through advanced analytics. 9 The CFO Reimagined: United States

10 FIGURE 2 Proportions of respondents that have already adopted advanced analytics and are moving toward embedding machine learning on all data sets. Considering the advantage that CFOs derive from their organizational data, it is fitting that their biggest challenge in terms of meeting their strategic objectives is poor data quality. In the US, CFOs are more likely to flag this as a challenge than peers in other countries (see Figure 2) and they also see themselves as a large part of the answer. Approaching nine in ten (85 percent) say their function has assumed total responsibility for data governance across the enterprise. As the corporate finance director of a major US insurer cautions, however, taking control of data is far from straightforward and requires a holistic understanding of the firm. We are a large and complicated organization and installing a new data system needs to be carefully calibrated so it will not prevent us from meeting nonnegotiable deadlines with the government or with our board of directors, he says. United States Italy Singapore Brazil United Kingdom Australia Spain France Germany Japan 86% 83% 81% 77% 76% 76% 74% 72% 63% 59% 10 The CFO Reimagined: United States

11 Going beyond realtime shining a light on the future The CFO of a US consumer goods business described real-time analysis of business performance as the holy grail for his company. In our view, however, real-time analysis should be seen as an important step toward a much more transformative outcome the ability to accurately predict, and plan for, future conditions. In this ambition, US CFOs again stand out from their global peers. In the coming years, almost nine in ten (89 percent) expect to be spending time identifying and preparing for volatile future scenarios. Today, one in three says they have achieved clear progress when using predictive modelling to support innovation and new product development, investment planning and budget forecasting. 89% expect to be spending time identifying and preparing for volatile future scenarios. 11 The CFO Reimagined: United States

12 FIGURE 3 Proportions of respondents that say finance has assumed total responsibility for data governance across the enterprise. 80% 71% 68% 66% 66% 65% 60% 60% 52% 44% United States France Spain Brazil Singapore United Kingdom Australia Italy Germany Japan Accordingly, US finance teams have made advances in adopting technologies, such as machine learning, to support this activity and help them process structured and unstructured data, flag bottlenecks and inefficiencies, and highlight emerging opportunities (see Figure 3). For instance, the overwhelming majority (93 percent) expect to be providing real-time analysis of business performance within three years time. Already, 82 percent report positive results from this activity higher than all other regions in our survey. The corporate finance director at a US insurer marvels at the potential benefits of technologies that have come onstream during the many years since he started his career. Our finance professionals today are given tools to perform routine tasks, so they can spend less time generating results and more time analyzing them and discerning possible problems and opportunities, he explains. 12 The CFO Reimagined: United States

13 Conclusion and next steps for US CFOs The CFO is in a perfect position to anticipate and also realize the future of the business, concludes Accenture s Davidson. Most organizations know where they want to go, but they struggle when it comes to enabling just how to get there. The CFO is using data and analytics to understand the journey and map out the course, while focusing increasingly on value. 13 The CFO Reimagined: United States

14 Our research indicates that US CFOs should prioritize three key initiatives, to build on their success and take finance to the next level: Leapfrog RPA Advanced data-processing technology is moving incredibly fast. RPA is valuable as a means to improve efficiency, but should not be the end-goal. At worst, businesses dedicate all their time automating sub-optimal processes via RPA when the real value will come from rethinking existing processes through the lens of data and analytics, and implementing more advanced and transformative technologies such as AI and machine learning. Prepare for the talent overhaul CFOs urgently need to retrain existing staff and hire new talent with non-traditional skills. And as more transactional finance processes are automated, finance professionals will increasingly need to collaborate with machines to perform their dayto-day activities. Considering the scale of the changes described above, it is unsurprising that 86 percent of US CFOs believe the traditional finance talent profile needs to change quickly and dramatically. Ability to innovate is a top-three desirable skill for new finance executives, along with data science and financial modelling. In the words of a US technology CEO, we need fewer people who can do only routine tasks and more people who can think outside the box and can do complex business analysis. 14 The CFO Reimagined: United States

15 Inspire, influence, motivate Three in four respondents in the US say their function is generally moving faster toward real-time performance than the rest of the business is ready for. This presents both an opportunity and a challenge. An opportunity for the CFO to leverage their function s leadership in digital transformation to broaden their remit from business advisor to steward accountable for, and capable of, driving tangible business value. A challenge because this requires CFOs and their lieutenants to be effective storytellers and power brokers, requiring soft skills way beyond traditional accounting expertise. The theme of their stories as the new chief storytellers is value and the new language they are using is data. As the new power brokers, CFOs use their value stories to establish alignment across functions enabling them to influence, build dedication to a vision, and achieve outcomes that others could not. 15 The CFO Reimagined: United States

16 Contacts Paul Boulanger Senior Managing Director, Accenture Strategy, CFO & Enterprise Value David Davidson Managing Director, Accenture Strategy, CFO & Enterprise Value About Accenture Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions underpinned by the world s largest delivery network Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With 449,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at Join the Copyright 2018 Accenture. All rights reserved. Accenture, its logo, and High performance. Delivered. are trademarks of Accenture. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.