In recent years, much has been made of the role of the Chief Information Officer. This position gained notoriety and visibility over the past decade or so, as the potential for data analytics swelled to be virtually limitless. With the improvement of our tools and capabilities, naturally this role grew in stature owing to the insight that that this person could uncover when given access to so much information. To this day, the CIO still plays a critical part in the healthy functioning of any company and in harnessing and understanding the data surrounding how the company itself is or is not working. The CIO can help identify where there is room for improvement and find innovative ways to problem solve. This role is still important because data and data analysis plays in integral role in how companies operate. However, the role of the CFO is undergoing an elevated role, owing to the ability to combine data and finance. By leveraging data and analytics to come up with new ideas for revenue streams or optimizing those that already exist, the modern CFO is becoming an executive to watch, and creating a new talent pool for potential CEOs.
Although the change has been gradual, throughout the last decade, the role of the CFO has expanded to include greater responsibility and authority. This marks a significant departure from the traditional role that focused solely on crunching numbers all day. As the decisions made in the boardroom become more and more driven by real time data and insights, the role of the CFO becomes more dependent on data analytics and integral to the decision-making process. The ability to not only provide numbers, but analysis in a very immediate way requires that the CFO exercise a broader set of skills than those of the past.
Although generating and managing revenue has always been a central component to operations and the role of the CFO, we have never had access to so much data. This increase in available data tied to spending, earning and potential earnings means that in many cases the CFO acts more as the CIO in practice. Through identifying and interpreting this data, the CFO is exposed to the same information normally associated with the CIO. However, the CFO is looking at this information with a very specific intention, in line with the financial objectives of the company.
In practice, Chief Financial Officers must be highly analytical, well-versed in the technical aspects of running a company and have an intricate understanding of how to interpret data in a way that makes sense within the context of their company. With this rise in visibility and responsibility, it’s no surprise that we are seeing a spike in the trend of hiring former CFOs as CEOs. To learn more about some of the most successful CFOs in the tech sector today, please see my presentation here.