CFOs are increasingly playing a larger role in the management of pricing decisions and profitability at many growth and middle market companies. CEOs and owners of these companies view pricing trends as a primary competitive challenge. Historically CFO focus has predominantly been on the administrative side of pricing – tracking and reporting, managing exceptions and enforcing policies. But within some industries, especially Manufacturing, Retail/Wholesale and Services, finance is playing a more strategic role around aligning pricing with corporate strategies, driving pricing approaches and getting value out of customer-specific investments.
As the CFO’s role continues to evolve, we see five key imperatives for them to truly become the architects of business value:
Align strategy: The CFO’s agenda and objectives must be more closely aligned to business strategy and those of the chief executive officer. The CFO will be a key player in the formulation of business strategy and will need to lead the finance function to deliver on strategic objectives.
Transform operating models: The CFO will need to continually evolve the operating model as companies scale up or down to address a more demanding business environment. A transition toward a global or integrated shared services model can help reduce costs and quickly gain access to more value-added services.
Manage performance: The CFO needs to be much more forward-looking and track business indicators much earlier in the cycle.
The finance function should take a holistic view of performance, analyzing financial outcomes both in terms of decisions taken in the enterprise and changes in the broader external market.
Embrace digital: CFOs should develop a deeper understanding of the digital technology landscape and learn how to “speak digital.” The technology component of business processes can no longer be isolated, and the CFO will need the capacity within the finance organization to assess the full scope of digital technology considerations.
Develop finance capability: As finance spends much more time interacting with business leadership, there will be an increasing need among finance professionals for skill sets that support advanced data analysis and the use of digital technology. Finance will also need to develop specializations in the financial aspects of specific business processes such as pricing and trade promotion.
At INVIST we help CFOs to reach the listed targets and functions