Dive Brief:

• Many CFO-led teams worldwide follow a 20-year-old model as a “steward” for business, focused on trying to streamline financial processes to drive growth, rather than as “catalysts” providing business insights or as “futurists” sparking business model innovation, according to findings from a Microsoft survey.
• “There’s still quite a few teams that are a little bit in the dark ages, I would say, and that they’re still struggling with the same issues that business applications promised to solve 20 years ago” such as finance automation 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product marketing manager at Microsoft, said Monday at the Gartner CFO and Finance Executive Conference, describing an unpublished global survey of 500 finance leaders.
• “A newer role for those companies that are maybe a little bit more mature is this idea of finance teams being the catalyst for the business,” leading digital transformation throughout their companies and prioritizing investment, 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.

Dive Insight:

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

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

“No longer are you downstairs in the basement, working on financial processes,” she said. “Now you’re an integral part of the business and how the business runs and your teams have to be set up for success and how you collaborate with your business stakeholders,” efficiently and securely sharing data with the groups that need it.

The “Rise of Artificial Intelligence” ranked as the second biggest challenge, Ballinger said. Half of survey respondents said they saw business agility, operational excellence and “hyper-automation” as their top strategic priority. For example, they seek to close their books in a few days instead of weeks. 

“Speed of Business” ranked as the third biggest challenge, Ballinger said, noting that 42% of respondents said they struggle to keep pace with the demands of their business.

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

“It’s tied to ‘Always On,’” Ballinger said. “There’s no such thing as a weekend anymore or evenings — we’re always connected.”

Sustainability and the Great Resignation — or the difficulty of attracting and retaining talent — rounded out the top five disruptions for finance executives, she said, citing the survey completed in February.

Microsoft is following its own advice as a “futurist” by using business model innovation in the treasury function to buffer against turbulence in foreign exchange markets, April Olson, a group program manager at Microsoft, said in an interview at the conference. The company is internally coordinating nine different systems to enable various geographic units to adjust to currency volatility by lending to one another. 

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

The dollar, a safe haven amid financial market turmoil, has strengthened in 2022. Also, economic growth flagged in much of the world and the Federal Reserve has increased the benchmark interest rate from a record low, burnishing the appeal of U.S. debt.

The U.S. Dollar Index — which tracks movement of the greenback compared with a basket of six major currencies — has increased more than 6% this year to the highest level since the early 2000s. Meanwhile the Japanese yen, euro and British pound have fallen.

CFOs at U.S. companies need to adjust to a stronger dollar by anticipating that, although import costs will decline, the prices of their goods and services will rise for foreign buyers, reducing performance abroad. Salesforce cited the robust dollar on May 31 when reducing its forecast for sales.