Sas Mukherjee, Executive Vice President, Chief Financial Officer and Chief Strategy Officer at York Risk Services, explored how the CFO role is evolving in his keynote presentation to Argyle's CFO membership at the 2018 Financial Leadership Forum in San Francisco on February 14. In his presentation, "Evolving Role of the CFO," Mukherjee shared his thoughts on the past, present and future of CFOs in organizations of all sizes and across all industries.
The CFO role is constantly evolving, and for good reason. Today, many technologies are available that help CFOs manage transactions and compliance. Yet these technologies alone are unlikely to help CFOs become key influencers within their organizations.
According to Mukherjee, many CFOs take a transactional approach to their day-to-day operations. These professionals focus on financial transactions and ensure compliance with myriad industry regulations. Yet a transactional approach is insufficient, particularly for a CFO who wants to help his or her company differentiate itself from the competition.
Today's CFOs must consider the perspectives of both internal and external business stakeholders. By doing so, these professionals can take an in-depth approach to the decision-making process and determine the best course of action based on the impact to all parties involved.
"I'm coming at the CFO role from the perspective of our stakeholders, from the outside-in and not inside-out," Mukherjee stated.
In addition, CFOs must look closely at their everyday efforts and modify them as needed.
"A lot of CFOs actually use gut feel to make decisions. We're mired in transaction processing, so we're not spending enough time on innovation or process improvement."
Many CFOs focus strictly on transactions, and doing so may cause these professionals to miss out on opportunities to collaborate with other business departments and drive innovation. Furthermore, a transactional approach often prevents a CFO from becoming a key contributor within his or her business.
"The traditional CFOs are spending a disproportional amount of time in transactional reporting and compliance and control," Mukherjee said. "We need to think about what percent of time we spend during the day doing things that are actually meaningful instead of just running transactions."
CFOs must strategize in all that they do. Although CFOs should allocate time and resources to complete transactions and promote compliance, these professionals must look beyond transactions and compliance to help their companies thrive.
"I feel like we're not spending enough time on strategic areas," Mukherjee said. "Compliance and reporting are important, but they're not differentiators."
Many CFOs understand the value of innovation, but few prioritize it. Conversely, most CFOs strive to maintain the status quo, despite the fact that innovation may lead to immediate and long-lasting improvements across a business.
"There's a lot of contradiction between what CFOs want to be and what they actually are," Mukherjee pointed out. "A lot of CFOs actually use gut feel to make decisions. We're mired in transaction processing, so we're not spending enough time on innovation or process improvement."
How a CFO approaches technology may dictate his or her long-term success.
"Data is the next frontier in the organization. We need to be able to capture meaningful information, because that's what's going to help us get the insights we need."
If a CFO explores ways to maximize the value of existing technologies, he or she may help a business become more productive and efficient than ever before. On the other hand, if a CFO constantly wants the latest and greatest technologies, this professional may struggle to help a company accomplish its immediate and long-term goals.
"We're struggling to use our existing technologies," Mukherjee said. "We're always looking to chase that next shiny object, but [we're not necessarily] using the technology we already have."
For today's CFOs, a data-driven approach may prove to be exceedingly valuable. This approach ensures CFOs can use a wide range of structured and unstructured data to drive the decision-making process. Plus, the approach enables CFOs to find ways to highlight the value they provide and ensures they can become key influencers within a business.
"Data is the next frontier in the organization," Mukherjee indicated. "We need to be able to capture meaningful information, because that's what's going to help us get the insights we need."
With the right data collection and analysis technologies in place, a CFO can help a company optimize the time and resources at its disposal. Perhaps most important, a CFO can use data to ensure a business can take a revenue-led approach to budgeting.
A revenue-led budget enables a CFO to consider a company's revenue in relation to its operating costs and spending. The budget allows a CFO to review many financial data sets and analyze the link between operating costs, spending and revenue. Then, a CFO can use this budget to help a company foster revenue growth, reduce its operating costs and optimize its everyday operations.
"We do not talk about cost at all, and we only talk about revenues," Mukherjee noted. "We partner with business leaders and determine what our revenue is, because everything we do is a function of our revenue."
Sas Mukherjee is currently the EVP, CFO and Chief Strategy Officer for York Risk Services Group, a portfolio company of Onex Corp, a leading global investment firm with $23 billion of capital under management. In total, Onex has investments in over 25 companies that collectively have $36 billion in assets, $23 billion in revenue, and 145,000 employees.