CFOs Write New Playbook on Prepping for Leaner Economic Times

The role of today’s chief financial officer (CFO) is continually evolving in step with economic realities and technological advancements.

And those two areas have undergone rapid amounts of change in recent years, completely reshaping the business environment.

“You are in a totally different economic climate now … It’s not as easy to grow as it has been in the past, which puts more pressure on operational and executional excellence as a company, as well as heightens the focus on strategic decision making,” Ninos Sarkis, CFO at Bloomreach, tells PYMNTS for the “Day in the Life of a CFO” series.

The current economic climate is marked by tighter monetary policies, higher interest rates and increased scrutiny of budget management. These changes mean that the role of CFOs has shifted from focusing solely on growth to managing growth efficiently while ensuring profitably.

And, as Sarkis said, with the advent of generative artificial intelligence (AI) implementations and other system automations, the role the CFO organization plays as a decision maker is only growing more important.

That’s in part because operational excellence, which has always been important, has gained even more significance in the current environment. Businesses are now required to streamline activities, automate processes and gain efficiencies in order to stay competitive — and tapping modern tools is one of the best ways to do so.

“All great companies are built on foundations of operational excellence, continued process improvement, streamlined workflows and an ability to scale at a pace where you’re not adding people and cost to the same level that you grow top line,” Sarkis said.

“The CFO plays a pivotal part in that because our organization understands the numbers, the metrics, where investments are working and where they aren’t, as well as where the money is being spent and needs to be spent. It shines a light on the finance team being able to provide the right data, the right metrics, and the right business intelligence to the rest of the organization,” he said.

Interdepartmental Collaboration and Strategic Decision Making

The shifting economic climate has increased the need for collaboration between departments. It’s no longer enough for a company to grow; it must do so in a managed, coordinated, and profitable manner.

“It is important to talk about where we’re spending dollars, what the return on investments are for the different leaders across the organization,” Sarkis. “If you’re thinking about entering new countries, is it really the right time to do that? Or is it better to double down on where you know you’re strong and make those parts more efficient?”

He added, “The dialogue and the interaction with other business leaders has ramped up, and I think that will continue over the next six to 12 months. … You can’t control the geopolitical tensions, but what you can control is making your business stronger and more resilient during these times so that you come out the back of it a stronger company … there’s a lot of relatively low-hanging fruit to make a business more efficient, more scalable and more automated.”

That’s why, as technology continues to advance, CFOs must keep pace.

CFOs Can Leverage the Power of AI and Technology to Drive Success

Automation, system implementations and the integration of AI are becoming key components of the CFO’s responsibilities.

These technologies are not only streamlining processes but also providing valuable insights into financial data, helping businesses make more informed decisions.

Additionally, AI can handle laborious, repetitive tasks, allowing finance teams to focus on strategic, value-added activities.

“It’s important to improve automation so that finance teams are doing less manual tasks and focusing their time on what really helps the business,” Sarkis said.

“And the finance team is more important today than it has been historically. It is harder to grow and we are asking the business to be more efficient, which means that teams will naturally come back to finance and say ‘help me get there, what can I do?’ You lean more on your finance team in times where there are less dollars for investment,” he said.

Looking ahead, Sarkis envisions a future where CFOs will play a crucial role in capturing business growth, especially when the macroeconomic climate improves. As companies transition from a focus on efficiency and profitability back to growth, CFOs will be at the forefront of strategic decisions.

“Growth is going to turn around and come overnight. Businesses need to be ready to facilitate that growth and ensure that they are ready to capitalize on it with a strong, scalable foundation,” he said.

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