Many CFO-led teams still follow the 20-year-old “steward” role: Microsoft

Diving Brief:

  • Many CFO-led teams around the world follow a 20-year-old model as “stewards” for companies, focused on streamlining finance processes to drive growth, rather than as “enablers” providing insights commercial or as “futurists” generating a business model. innovation, according to the results of a Microsoft survey.
  • “There are still quite a few teams that are a bit in the dark ages, I would say, and are still struggling with the same problems that business applications promised to solve 20 years ago,” as the automating finance and increasing productivity and efficiency, Michele Ballinger, product marketing manager at Microsoft, said Monday at the Gartner CFO and Finance Executive Conference, describing an unpublished global survey of 500 finance executives .
  • A more recent role for companies that are perhaps a bit more mature is this idea that finance teams are the enabler of the business, “leading digital transformation across their businesses and prioritizing investments, she said at the conference in National Harbor, Maryland. Similarly, “futurists” focus on designing business value, identifying targets for innovation of new services and products.

Overview of the dive:

CFO-led teams that are futurists or enablers — or both — are best positioned to overcome the top five disruptions identified by survey respondents, Ballinger said.

Fifty-five percent of finance leaders identified “Always On” as the biggest disruption, or the imperative to ensure “hyper-collaboration” and connectivity, she said.

“You’re not down in the basement anymore, working on financial processes,” she said. “Now you are an integral part of the business and the way the business works and your teams need to be set up to succeed and how you collaborate with your business stakeholders”, effectively and securely sharing data with groups that need it.

The “rise of artificial intelligence” is ranked as the second biggest challenge, Ballinger said. Half of survey respondents said they consider business agility, operational excellence and “hyper-automation” to be their top strategic priority. For example, they are looking to close their books in days instead of weeks.

“Business speed” is the third biggest challenge, Ballinger said, noting that 42% of respondents said they struggled to keep pace with the demands of their business.

“If you optimize your processes and become more efficient, more productive companies expect you to do it even faster and even faster,” she said.

“It ties into ‘Always On’,” Ballinger said. “There are no more weekends or parties – we are always connected.”

Sustainability and the big quit — or the difficulty of attracting and retaining talent — round out the top five disruptions for finance executives, she said, citing the February survey.

Microsoft is following its own advice as a “futurist” in using business model innovation in the treasury function to protect against turmoil in currency markets, April Olson, group program manager at Microsoft, said in a statement. conference interview. The company internally coordinates nine different systems to allow various geographic units to adapt to currency volatility by lending to each other.

Microsoft on Thursday cut its current-quarter earnings and sales guidance, noting that the appreciation of the dollar this year has undermined its performance. The company generates most of its profits overseas.

The dollar, a safe haven amid financial market turmoil, strengthened in 2022. In addition, economic growth slowed in much of the world and the Federal Reserve raised the benchmark interest rate by a record high, reinforcing the attractiveness of US debt.

The US dollar index – which tracks the greenback against a basket of six major currencies – has risen more than 6% this year to its highest level since the early 2000s. , the Japanese yen, the euro and the pound fell.

CFOs of U.S. companies must adjust to a stronger dollar anticipating that while import costs will fall, the prices of their goods and services will rise for foreign buyers, which will reduce overseas performance. . Salesforce cited dollar strength on May 31 when cutting its sales forecast.

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