The Journey from CFO to CVO

In the late 1980s, British Airways was bleeding cash, and it was the CFO’s responsibility to turn the legacy airline around! They were tasked with making a success story out of the airline. The CFO’s office surprisingly came up with a very “non-financial” critical success factor – they did not suggest cost-cutting initiatives or voluntary retirement schemes or hiring low-cost resources or optimising fuel spends, or anything that you would expect the finance team to come up with. They said the most important critical success factor was the “timely arrival and departure of airplanes”.

Eye-opening, is it not? Every organisation’s critical success factor is always driven by operational strategy, rather than finance! This is why CFO’s services need to bring in value to the business by being the crucial link between strategic initiatives and bottom-line impact.

Gamechanger, Accounts Ambassador, Number Wizard. There is no single way to describe the CFO’s role. Sometimes, CFOs themselves struggle to provide an answer. While conventionally responsible for tracking operational metrics, cash flows, and financial planning – with the changing dynamics of the business world, the CFO’s responsibility has evolved from the financials to adding value to the business, with a key factor being the adoption of technology.

Evolving from CFO to CVO

Over the years, the CFO’s role has changed drastically, especially post the pandemic when business leaders started looking at their financials through the lens of sustainability. Coping with digitisation and technology transformation, finance teams are evolving and expanding their organisational measure beyond the preparation of financial statements and MIS alone. They are now on the path to ensure that all relevant aspects of value creation and destruction are accounted for and communicated to boards, management, and external stakeholders.

For more insights on this, we reached out to Ian De Souza, CFO of Bank of Baroda, with a broad leadership experience of more than 25 years, who said, “The role of a CVO implies a lot more responsibility than that of a CFO, but the underlying skillsets are the same. The CVO is responsible for the social, environmental and legal factors creating value for the business – something that is currently looked at by CFOs in most organisations. Enhancing organisational competencies to address the sustainability goals with agility and communicating the same to the company’s stakeholders – is key and requires a 360 view of the finance function.”

Future Ready Finance Technology

Financial technology is evolving at a very fast pace with the help of Automation, Artificial Intelligence and Robotics. Now it’s clear that introduction of such technology will disrupt the traditional financial protocols. This ongoing transformation of the finance function is bound to create rapid transformation in the organisational landscape at a breakneck pace, and its reach is exponentially expanding as well.

For an astute opinion on this, we reached out to someone who is spearheading one of the fastest growing music streaming services in India – Vignesh Poojari, Head (India & US): Finance & Accounting at JioSaavn (CA, CPA, MBA-ISB). While discussing the adoption of technology in finance he said, “CFOs are the leaders who are responsible for adoption of new technology. For effective adoption of new technology, awareness about the problems, challenges and use cases that their finance team is currently facing and will likely face in the future are the key elements to solve the business needs. Automation technologies and ERP solutions best suited for the organisation, based on the larger strategic vision and business model of the company, are critical factors in decision making in terms of ROI of capital and time. While assessing new technologies, generating demonstrable value is the key to sustainable finance transformation.”

3 R’s of The Chief Value Officer

How will the future CFO determine the 3Rs (Roles, Responsibilities, Relations) under their profile? Especially if they’re slated to become the Chief Value Officer?

We reached out to Dinesh Gupta for his insights on this topic. He’s the Senior Finance Controller of Raw Pressery and has over a decade of experience as a finance leader. He said, “The positioning of a CFO has changed from a number cruncher to a strategic leader. If the CFO harbours ambitions of becoming a CVO, they have to act as a bridge between different business units, individually driving them and developing a plan for the future of those units. The focus should be on strategy and maintaining communications with C-level executives across the board to steer organisational value to newer heights.”

Mounting Challenges

A modern-day CFO’s responsibilities lie in tackling uncertainties – both internal (financials statements closure, lack of data insights, attrition, stakeholder, and auditor management) and external (economic recessions, industry outlook, increasing regulatory compliance). CFOs who are on the path to being CVOs are increasingly looking towards harnessing technology as an enabler in managing activities and achieving the strategic vision.

However! A recent survey by Harvard Business Review of CEOs, CFOs and senior executives found that digital transformation risk is the #1 concern – not because of the technology adoption, rather – companies lacked the right mindset to change. And if existing processes are flawed, any transformation initiative will only magnify those flaws. Since the CFOs role also includes  being responsible for such change management initiatives, they must face the inevitable challenges that they pose.

Seeking a solution to these challenges, we approached Sandhya Sriram, Group CFO of Narayana Health. She was awarded as one of Asia’s Top 100 Power Leaders in Finance, and said, “Setting your company on the right technological path is crucial to the health and growth of your business, especially in the face of all these challenges. The focus must be on creating a solid framework and defined finance processes through automation. This not only allows you to create a knowledge repository for business continuity, but also allows your staff to move away from tedious, manual tasks, so they can use their array of knowledge for more strategic tasks once your company benefits from the automation exercise. I would like to share an example on this about our ongoing shared services journey. The true value from a shared service does not come from centralisation or efficiency. It comes from simplification and collaboration. Instead of a typical shared service design, where all the work is brought to a central location, we are using technology to digitally orchestrate the processes while keeping the actual tasks performed in the respective locations. Likewise, we also believe that Data Democratisation is the only way to build an organisation which is aligned in purpose and direction. In NH, we have implemented state of the art BI using Medha Analytics® which provides all information required for effective decision making at the click of a button. This has truly unleashed the real value that Finance Professionals can create in steering business outcomes rather than reporting numbers.  This gives seamlessness, efficiency and business intimacy at the same time. The true value of the finance function does not lie in technology adoption, but using technology to enable business outcomes.”

Developing the right culture

A CVO must also focus on constantly developing advanced capabilities within an organisation’s people, activities, functions, structure to keep them in sync and aligned to organisational goals.

To understand the ideology of implementing the right mindset for change in an organisation, we spoke to Hariwansh Kumawat, CFO at OTO Capital with a rich experience of leading finance at companies for more than 10 years as a CFO, who said, “Organisations embracing finance transformation are making constant efforts to create a robust and perpetually sustainable digital culture. For this to work, the CFO should make sure the core competencies of the team are apt, the capabilities of the technology available is efficient and key processes are working according to the standardised flow. All these aspects shall be synchronised to ensure a steady and significant synergy between the finance function and the organisation at large.”

At Contetra we work with CFOs and senior finance leaders across the world by helping them get the competitive advantage they need – whether it’s creating financial statements that make more sense for a global world, or finance transformation initiatives that drives their business to new heights.

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