Today’s CFOs increasingly find themselves in a position to actively transform their companies.
This emerging reality is rapidly transforming the nature of both the CFO role and the finance function. Once seen primarily as a steward of financial stewardship, the modern CFO is now a strategic partner in driving growth and innovation within their organizations.
“The best CFOs, the most effective CFOs, are the ones that are in the business itself,” Hai Tran, CFO of CSG, told PYMNTS during a conversation for the series “A Day In The Life of a CFO.”
“Experience counts for a lot in this role,” he added, highlighting how diverse experiences across different companies and sectors can enrich a finance chief’s ability to navigate the unpredictable challenges that come with the territory.
After all, the CFO’s job today is no longer just about managing predictable financial processes; it’s increasingly about handling unexpected scenarios with agility and insight.
“Part and parcel of the requirements of being an effective CFO is how do we handle the surprises. Not so much the regular day-to-day stuff that is easy to predict and manage, but you are really tested when things that are unexpected happen, and experience really helps in those situations,” Tran explained.
Within today’s dynamic environment, one that encompasses challenges ranging from economic fluctuations to the responsible consideration of technological advancements like generative artificial intelligence (AI), having a finance team that is deeply integrated into the strategic fabric of the business is crucial.
Tran’s own career, marked by stints in various industries and roles, has been a testament to the evolving demands on CFOs.
Every new position, he explained, comes with a steep learning curve for CFOs who want to be embraced not just as enablers, but as equal partners in strategic decision-making, especially when transitioning into new industries that come with their own specific vocabularies and concepts.
The digital transformation sweeping across industries has significantly impacted the finance function. For Tran, digital transformation is fundamentally about becoming data-driven. It starts with collecting raw data and evolves through stages of reporting, analysis and ultimately, providing true decision support. The goal is to leverage data not just for operational efficiency but to forecast and navigate future challenges and opportunities.
“The holy grail for digital transformation is to get to true decision support, where we’re really providing data-driven optionality and information and choices; where we fully analyze the implications of the path that we select,” Tran said, noting that “most companies don’t get there … you have to bring institutional knowledge to bear, and that’s where experience matters.”
Fortunately for modern finance functions, AI and machine learning are proving to be pivotal in this transformation, providing tools for predictive analysis and operational automation.
Tran explained that while generative AI is relatively new, existing AI technologies have been integral to finance for some time. At CSG, he said, they are exploring how AI can enhance productivity and are integrating AI capabilities into their products to add value to customers.
In a rapidly evolving business landscape, Tran advocated for establishing a model where the finance team works as business partners rather than mere enablers. This partnership approach involves ideating and shaping strategy, not just supporting.
At CSG, Tran has fostered a culture where finance leaders are embedded within business units, acting as de facto CFOs of those divisions. This integration ensures that financial considerations are at the forefront of business decisions, backed by a robust, data-driven approach.
“There’s an obsession about utilizing data to help make the best decisions possible,” Tran said, underscoring the critical role of data in modern finance.
And for global businesses, risk management exists as a multifaceted challenge. From regulatory compliance across different countries to managing currency and interest rate risks, the CFO’s role in mitigating these risks is vital. Tran stressed the importance of building a culture that is vigilant about risk, one that is proactive rather than reactive.
This vigilance extends to financial operations like accounts payable and receivable, where proactive management of working capital can significantly impact a company’s cash flow and overall financial health.
Ultimately, the CFO’s role is now more critical than ever. It demands a blend of financial acumen, strategic insight, and operational involvement, positioning the CFO as not just a guardian of the company’s financial health but a pivotal player in shaping its future.
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