Chief Reality Officer? CFOs Remain Source of Truth Amid Financial Uncertainty

With great change comes great opportunity. And as the business landscape undergoes a rapid transformation, it has brought with it a broader shift in the expectations placed upon financial executives.

Once seen primarily as experts in numbers and financial reporting, the modern chief financial officer (CFO) now plays a crucial role in shaping their company’s strategy and future direction, requiring them to be operational leaders and strategic partners to rest of the executive leadership team, the board and the business itself more broadly.

“The role of the CFOs has become a lot more operational. Today’s CFOs are a mix of COO — chief operating officer — and CRO – chief reality officer,” Vinay Bassi, CFO at TruBridge (formally known as CPSI), told PYMNTS for the “Day in the Life of a CFO” series.

One of the most significant drivers of change for the CFO role has been the rapid advancement of technology. Digital tools and data analytics have transformed how financial operations are managed, enabling CFOs to provide real-time insights and forecasts that are critical for strategic decision-making. The modern CFO must be tech-savvy, leveraging technology to optimize financial processes and drive efficiency.

“To put it in simple terms, 10 years back, CFOs were like air traffic controllers who could only see the planes that have already landed or were about to land. Now, as technology has evolved, CFOs are still like air traffic controllers but the visibility has rapidly transformed and you can track planes in the air along their entire journey,” Bassi said.

Still, despite the evolution of the CFO role, one constant remains — the CFO’s role as the custodian of truth in financial matters, he added, going on to highlight the CFO’s responsibility to translate the company’s progress and performance into tangible numbers, and the importance of providing a clear picture of both risk and opportunity to stakeholders.

Effectively Navigating Complexity in a Dynamic Business Landscape

As the business landscape evolves, CFOs must navigate through unprecedented levels of uncertainty and complexity, a backdrop increasingly requiring CFOs to possess a diverse skill set, including strategic thinking, leadership, and communication skills, as well as to effectively collaborate with other departments and influence the company’s direction.

As Bassi explained, this makes it crucial for CFOs to “spend a lot of timing learning the drivers of their business, and then simplifying them and communicating it back to the rest of the leadership team.”

“To give a football analogy, I always think about CFO as being the blind side of the CEO and the board,” he added, noting that the CFO is in a unique position to help protect the rest of the business from events and potential disruptions outside of their field of vision.

The complexities and uncertainties filling today’s landscape are only likely to compound further when it comes to the realities of tomorrow’s operating ecosystem.

“My advice for other CFOs, is after knowing the drivers of the business, try to segregate them into two parts: what is controllable and what is non-controllable? A non-controllable could be an event like another pandemic, but controllable could be, ‘Hey, if there is an interest rate decline, what do I do? If there is a recession, what is my plan A, B, and C?’” Bassi said.

“The fundamental piece is that you are going into war, or battle, with the army you have and not the army you might want. This means that building your team and focusing on your team is critical. Train your finance associates, give them exposure, and attract and retain talent,” he said.

It Has Never Been More Important for CFOs to Embrace Technology

The integration of digital solutions and automation has reshaped both the CFO’s day-to-day responsibilities and the potential impact they can have on their organization’s roadmap.

“Day-to-day, there is an unsatiable desire to have more technology … but it’s important to remember that garbage in means garbage out, and more data is meaningless if it’s not data you can use. There is lot of great technology available, but it needs to be designed to your specifications and the pace of adoption has to be there,” said Bassi, stressing the importance of conducting cost-benefit analyses and aligning technological investments with strategic objectives — particularly when it comes to innovations like artificial intelligence (AI).

“We just need to make sure we know how to use our technology to the benefit of our customers first, our shareholders, our employees,” he said.

Looking ahead to the coming years, Bassi envisions CFOs becoming even more technologically adept and globally minded. With increasing data availability and analytical tools at their disposal, CFOs will play a crucial role in driving informed decision-making and guiding the company through complex challenges. Speed of decision-making and flexibility will be key, he emphasized, as businesses adapt to changing market dynamics.