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Nine CFOs and the Digital Imperatives


15 min read

Even before the covid-19 pandemic started, I was convincing businesses to adapt their digitization strategies. Companies focused on the future continue to develop and invest in their own destiny despite the economic downturn and have a much better chance of surviving and thriving. Those who cut costs and curl up into a fetal position are doomed to fail. It’s time to “prove yourself” and invest in your staff and tools.

If a company doesn’t adapt to the age of innovations in fintech, it will likely not last long. The connection CFO has with his team, along with the CIO, should lead this initiative. It should be adopted company-wide and supported by senior management. The fact is that most digitization attempts fail to deliver on their promises, but a strong effort can lead to unexpected success if the leadership teams are fully committed. The root of the problem is at the very top.

How does the CFO become more strategic?

What does it mean to be a strategic CFO?

We have identified four pillars of a strategic CFO model to help improve alignment between CFO actions and the goals of the CEO and board members based on practical observations, conversations with several CFOs, and insights gathered from our work with many public companies. In addition to the traditional four roles of the CFO (operator, steward, catalyst, and strategist), our observations shed light on what makes the CFO strategic, the responsibilities of the strategist, and the organization’s potential to refocus and implement a new financial strategy. Let’s sum up these benchmarks and look at how each one shows decisions about the CFO’s critical role and level of participation in setting strategic goals.

Why should the CFO be strategic?

The CFO’s abilities can be used to enhance and extend the above CFO strategy development process by answering questions such as:

  1. Can the organization achieve its goals when it comes to money?
  2. In which areas of the business and markets do you see the greatest potential for increasing revenue or profit?
  3. How should the firm organize and manage the financing of its most important investments to maximize its competitive advantage?
  4. What structures (e.g., business models, legal and tax structures, onshore, offshore, or outsourced operating models) and procedures (automation, build instead of buy, networking, etc.) are most effective in achieving competitive advantage and increasing market value and profitability?
  5. What types of management and financial reporting help management implement and achieve the goals set out in the strategy?

The strategy development process formulates the answers to the above questions and then implements them to generate returns for the company’s investors. CFOs need help determining how best to engage in this process, given the company’s business, management, and board. CFOs can approach the strategy development process from four perspectives, each described below.

What are four ways to become a strategic CFO?

CFOs can occupy one of four unique positions in their work: reactor, challenger, architect, or transformer.


The CFO and the finance department play a supportive role in strategy formulation by providing key business leaders with quantitative analysis of the financial implications of alternative strategies. This CFO mindset is particularly common in highly decentralized organizations where the CEO has decided to shift responsibility for strategy and performance to the heads of individual departments. Another scenario where this mindset prevails is when the CEO limits the CFO’s or finance department’s role in the strategy development process to quantitative and analytical support. To respond effectively, the CFO and the finance organization should create a centralized financial planning and analysis (FP&A) unit that sends the necessary analyses and data to the structures whose leaders are responsible for developing strategy options.


The CFO and the finance department act as guardians of future value in the scenario planning process, challenging the status quo through careful analysis of the potential downsides and upsides of possible courses of action. As the CFO and finance department seek to avoid risk or ensure acceptable returns on future capital expenditures and investments, the role of the opponent is often associated with the role of “Dr. No.” To be a successful challenger, the CFO, and the finance department may need to have the same financial planning and analysis (FP&A) skills as the challenger, as well as access to the necessary data from the business units on the underlying strategic assumptions and models. It is important to note that the CFO must obtain approval from the CEO before questioning the strategy of individual business units. If allowed, the CFO’s role as a challenger is very important when big strategic investments are being thought about.


The chief financial officer (CFO), finance department, and senior executive leadership team work together to select the best course of action and then implement the financial methods that will enhance and multiply the effectiveness of those options. Architects go beyond the bidder’s mindset by facilitating the financing of innovative projects through various financial methods and financial partnerships with suppliers, customers, or delivery channels. In this way, architects seek a “path to the agreement” on strategic financial investments. The CFO, finance organization and business may need to build mutual trust and collaborate early in the strategy development process to ensure the architect’s vision is successfully realized. Additionally, the CFO often needs strong finance teams within the firm to actively collaborate with business leaders throughout the planning process.


CFOs are equal partners with the CEO in formulating and executing the company’s long-term strategic plan. CFOs play a key role in making “real operational and financial choices” to change the product mix, create value, and develop unique competencies. Imagine a multinational corporation with centralized accounting and finance departments where the historical synergies that dictated the current product mix have evaporated. The CFO quickly creates opportunities to adjust the fundamental strategy option—the product mix—by implementing system updates that allow for effective division differentiation in the future. In addition, the CFO can ensure future financial flexibility by adjusting the debt-to-equity ratio. A corporation can move to a more successful business model by restructuring its financing and leasing structures to accommodate new ways customers purchase or use its products. In summary, CFOs, in their role as “transformers,” are actively involved in finding answers to the fundamental questions that arise in the strategy development process and developing and implementing financial solutions that allow the firm to adjust its strategy successfully.

How to become an effective strategist?

To be a good strategist, CFOs need to gain access to strategy discussions, build a strong finance team, and choose the right strategic orientation for their organization. This is not easy, and CFO strategists who are good at their jobs have to refocus their efforts often to meet the changing needs of their organizations.

Many CFOs who have been promoted internally from controlling, accounting, or finance and operations roles tell me that they have to fight for a seat at the strategic table, despite having been hired as strategic partners to their CEOs. Usually, this requires three things: a deep understanding of your company, the ability to come up with good strategic ideas and points of view, and accurate financials.

Becoming a good strategic CFO helps to know the most important growth limitations, uncertainties, risks, and scale assumptions.

Three reasons underscore the importance of having a strong finance team as a prerequisite for being invited to the table. First, the team builds trust in the financial organization by properly addressing the most fundamental issues. Second, having a strong finance team allows the CFO to focus on more general issues. Third, the CFO could provide the quantitative analysis and support finance functions needed to make a strategy.

Whether or not you can get the green light from the CEO depends on which strategic orientation you choose. Different situations call for different orientations, such as needing approval from the CEO or having enough money.

There is no one-size-fits-all approach to becoming a successful, strategy-oriented CFO. To better establish shared expectations about how the CFO will engage in the strategic process and address critical strategic issues within the organization, the CFO, CEO, board, and business unit CFO leaders can use the four CFO orientations we have described. More importantly, these orientations are dynamic; the right one will change as the organization’s environment and performance change.

What Are the Best CFOs Doing Now to Survive?

Over the past decade, the CFO position has expanded from primary accounting responsibilities to strategic planning. CFOs now oversees much more than just the finances of even the most modern companies. These professionals can no longer be just accountants; they must act as “farmers”, deciding where to sow the seeds and take care of their growth.

Stronger partnerships with CIOs to drive digital success

Let’s take Singapore as an example: CFO and digital transformation are deeply connected, and almost all CEOs (95%) are already involved or intend to be involved in digital transformation, given the potential economic risks. This shows that companies are still in sight of digital expansion.

Many successful businesses are adding digital technologies to processes that have been used for years in order to make more money and stand out in the market.

However, the long-term success of digital projects largely depends on how effectively the CFO is connected to CIO. According to Gartner, companies with close ties between CFOs and CIOs are 39% more likely to keep digital spending in line with budget projections, 51% more likely to get easy financing for digital initiatives, and 18% more likely to achieve their stated business goals.

Digital Funding impact of a strong CFO-CIO Partnership

Next year, CFOs and CIOs are expected to work more closely together to increase efficiency, optimize operations, and implement strategic projects such as virtual work.

Driving sustainability reporting and accountability

In response to the big data megatrend, many progressive companies have already begun expanding their sustainability approach. Companies must recognize sustainability requirements when their competitive edge is at stake.

According to Deloitte’s research, CFOs are key stakeholders in a company’s successful transition to a sustainable organization and destined to lead. They are already in charge of key information, processes, and reports and know how to evaluate and reduce risks, so they are in a good position to own the sustainability strategy and reporting.

The CFO should keep ESG (environmental, social, and governance) issues at the top of the company’s priority list.

To drive change within the company, CFOs must work closely with management, create a strong ESG working group, and coordinate with the IT department to improve technological efficiency.

Turning Data Into ‘Change-the-Business’ Insights

As a result of rising interest rates and a more negative economic outlook, CFOs are looking at what it means to create value differently.

As the world becomes more connected and interdependent, especially in business operations, CFOs rely more on data-driven strategies to drive business growth and improve efficiency. For example, they might try to predict future revenue streams or build long-term working capital models.

There is an urgent need to pay special attention to data, data management, and strategy, as the data that companies already have underpinned everything that drives better decision-making. Use the collected information and existing technologies to your advantage when making choices.

Building an enhanced reporting future

Financial sector executives expect more “technology agnostics” to reconsider their position in 2023.

Companies that don’t update their ways of handling business-to-business (B2B) transactions may soon be at a disadvantage compared to competitors who have adopted more modern ways of handling B2B financial transactions, even though many companies don’t have the staff or technology to get useful information from payment and expense data.

The CFO’s job involves gathering a lot of information and making decisions in favor of the company’s investments, infrastructure, and operating procedures. Leaders are putting a lot of money into smart automation to ensure that their processes are reliable, can be repeated, and help them give their customers more value.

CFOs who want to preserve profits through smart decision-making need confidence, and data provides that confidence. Using organizational data is key to getting more value out of existing business models because it improves oversight, makes it easier to keep costs under control, and makes people more accountable for standard operating procedures.

Nine Strategic Imperatives for CFOs

For 12 years, we at DashDevs have seen firsthand how revenue growth, profit margins, and smart reinvestment can lead to company success. The most successful companies prioritize value creation through expansion, prioritizing depth over breadth, and taking prudent risks. CFOs who want to expand their businesses and increase profits should follow these CFO imperatives.

Place more emphasis on larger investments

Effective growth leaders can increase their profits while growing their businesses and reducing costs in the long run. This is one of the most important CFO strategic imperatives. Avoid the temptation to play it safe by investing in growth. Place more significant bets on recognized growth opportunities.

What should you pay attention to?

Research and development: Effective growth leaders don’t spend more than their competitors. Still, they always put resources into R&D and are almost twice as likely to become market leaders in the face of major shocks.

Capital expenditures (CapEx): Effective growth leaders are 2.6 times more likely than others to get their money back on their investments within three years of a recession.

M&A: Effective growth leaders have made 1.6 times as many mergers and acquisitions as their peers over 20 years.

Prioritize the worth to your customers while making investments

Financial executives who are personally successful CFOs ensure the organization’s short-term financial performance and encourage the actions that will lead to sustainable, profitable expansion. Excellent returns for the investor result from delivering exceptional value to the customer. Spending a lot of time with your customers can help you learn what makes them truly valuable to your business.

What should you pay attention to?

Customer contact time: The top factor affecting the CFO’s personal effectiveness is time spent with customers (64%), ahead of factors such as pricing strategy, rapport with the head of sales, and focus on working capital. CFOs who are successful in their roles spend nearly 8% of their time on customer engagement and want to increase this to 10% or more. Remember that many customers have moved to a virtual world—that is where you may find them today.

Change the allocation from the losers to the winners

Encourage frank dialog about the potential shortcomings of the development outlook and, if necessary, shift the focus away from risky investments.

What should you pay attention to?

Exit conditions: Only 15% of businesses are ready to reallocate funds from losing projects to winning ones, as they have defined the criteria for reallocating funds from a losing project to a winning one and indicators that signal that the project should not move to the next stage before the project is launched.

Stop “scope creep,” and your business will expand profitably

Scaling up means uncontrollable growth in portfolio size, which in turn requires greater investment in resources such as labor, infrastructure, and product management. Keep sight of the importance of operating at scale, and ensure you cover the hidden costs that complexity brings.

What should you pay attention to?

Betting on strategic growth: The portfolios of high-performing growth leaders are 18% less diversified than those of less successful growth leaders.

Products and supply chain: High-performing growth leaders have 24% fewer product and service lines.

Operational density: High performers have more operations, making 20% more money from their biggest market.

Keep the company’s most important long-term plans safe

Keep strategic growth projects from being completed and underfunded at any stage of their life cycle. It’s important how the CFOs manage receivables.

What should you pay attention to?

Pooling additional funds: There are four factors to consider when determining the appropriate size of a supplemental fund:

  • How many strategic initiatives are being funded?
  • What proportion of these projects still need to be at an advanced level of development?
  • The count that could be better compared to projections.
  • The level of confidence with which project assumptions can be made.

Safeguard the investments that sustain a company’s competitive edge

To add value (increase margins and profits in the long run), it is important to direct resources toward differentiating your business features.

What should you pay attention to?

Distinctive elements in a crowded market: Effectively structuring costs and balance sheets around competitive differentiators (like intangible and physical assets, management consistency, and unique competencies) can increase long-term value realization by 42%, or 6% more ROI over three years.

To efficiently allocate funds, try a few different budget formats

Try a mix of zero-based budgeting and driver-based budgeting to figure out which tasks really help your organization succeed and allocate resources accordingly.

What should you pay attention to?

Zero-based budgeting: If you have these things in place, you will find that ZBB works better for you:

  • complete accounting information;
  • key performance indicators (KPIs) for measuring cost center performance;
  • knowledgeable employees about ZBB;
  • and support for ZBB from senior management.

Factor-based budgeting: FBB is different from more traditional budgeting methods in two ways:

  • it takes into account factors other than revenue when calculating costs (like decision makers, customer groups, and the number of business units),
  • and it links workload directly to budget drivers (like analysis and cash flow forecasts).

The “growth anchors” created by finance must be removed

This is so to say digital imperative. The term “growth anchor” refers to an unexpected consequence of a procedure or policy that causes a company’s management to shift focus away from ambitious expansion plans. Investment incentives for growth may not inspire sufficient risk-taking. Aim to get to the heart of day-to-day financial procedures and practices that undermine the company’s confidence in making prudent growth investments.

What should you pay attention to?

Bureaucracy: Too many rules and regulations, such as the need to include detailed financial models with business plans and the imposition of barrier fees that don’t make sense.

Short-termism: Companies are known to give financial incentives to senior management and evaluate operations with a heavy focus on deviations to get them to think in the short term.

Dangerous-to-fail mentality: This risk-averse mindset involves canceling expansion plans at the first sign of trouble and penalizing project sponsors for outcomes that were caused by external forces.

Capacity constraints: Limited resources require lean operations with careful budgeting.

Include everyone in the company in the search for savings

Efforts initiated from the top do not always lead to savings that are sustained over time. Encourage the company to engage in a continuous search for efficiencies.

What should you pay attention to?

Saving money pays off: Choose the most appropriate payback strategy based on your needs and goals. Balance sheet and cash; payback the center if your company is highly centralized; receive a monetary benefit if your company is undergoing major changes; accelerate payback if your company is rapidly growing.

As we approach 2023, CFOs are facing unprecedented challenges. The silver lining is that advanced technology has provided modern civilization with access to better tools to help deal with these challenges.

And while the future of business is uncertain, there is one thing we can say with certainty right now: the present is better. Many CFOs are embracing the challenge of preparing their companies for potential shocks and seizing opportunities in the future.

CFOs can access resources to help their companies weather the current economic storm and emerge stronger than ever. It’s human nature to want to save money, but it’s usually a bad idea. It will only postpone the final collapse of your company. Businesses that can adapt to new conditions and consumer preferences will thrive, proving Darwin’s hypothesis correct. A well-implemented digital strategy is crucial.

Contact us to understand better how to conduct digital transformation of your company and how you, as an expert CFO, may accelerate it.


What makes a CFO strategic?

The role of the strategic CFO is to partner with the CEO to offer sound financial advice that helps bring the CEO’s vision to life. The CFO is in the best position to lead current operations and new projects in a profitable and long-term way because he or she knows everything about the company and its strategic goals.

What are the top priorities of a CFO?

In today’s era, CFOs are challenged to address issues that matter to both the business and society at large and to gain the trust of these stakeholders to achieve better and more lasting results. When top management agrees on what is most important to customers and employees, it is easier to focus the company’s efforts on the most effective trust-building projects.

What are the two main skills a CFO needs?

CFOs need to know a lot about accounting and finance in order to help companies reach their short- and long-term goals, make plans for their finances that are specific to their industry, for instance, health care, and give valuable advice.

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