The new CFO is more digital and sustainable.

CFOs and finance teams have vital roles to play in harnessing the power of data and technology to drive efficiency and growth but also play a crucial role towards sustainability.

Introduction.

From the "Survey CFO 2024" conducted by Salone d'Impresa in collaboration with Andaf Nord Est and ADP Italia, an interesting overview of the evolution of the role of the CFO in Italian companies emerges, namely that about one third of CFOs still use Excel spreadsheets to draw up the preliminary balance sheet. This data highlights a certain resistance to change and a limited adoption of more advanced tools for financial management. Furthermore, just under 40% of companies have a budget dedicated to digital transformation, signalling a certain caution or limitation in the resources allocated to this important transition. Only one in five, i.e. 20%, work in companies that have already developed AI-based solutions. This figure indicates that the adoption of AI is still at an early stage for most Italian companies, despite its revolutionary potential (see also: "A Transformative Vision for Europe: The Energy Transition and Digital Transformation").

However, there is a positive aspect regarding ESG (Environmental Social and Governance) issues: 60 per cent of companies confirmed that these issues are included in their strategic plan. This indicates a growing awareness of and commitment to sustainable and responsible practices. In summary, the research sheds light on a picture of transition and challenges for CFOs, where digitisation and the adoption of advanced technologies, such as AI, are slowly taking hold, while ESG issues are gaining importance in corporate strategies.

The transformation of the CFO's function responds to a well-known evolutionary scenario, which has seen this role progressively shift from one focused primarily on administration and accounting towards high-level strategic management tasks. Today, the CFO no longer just looks after the accuracy of financial statements and regulatory compliance, but also takes on responsibilities that include negotiation, public relations and strategic decision-making. This change is not sudden, but has long roots. Over the past decades, companies have faced increasing operational and competitive complexity. Globalisation, technological advancement and the increasing focus on sustainability and governance issues have pushed CFOs to broaden their scope. They must now master not only traditional finance, but also data analysis, risk management, strategic planning and stakeholder communication. This new profile of the CFO requires interdisciplinary skills and a broader view of the entire organisation. The modern CFO must be able to interpret financial data and transform it into strategic information that can guide business decisions. Furthermore, he or she must be able to manage relationships with investors, customers and other key partners, playing a crucial role in the creation of long-term value for the company. Moreover, the growing importance of ESG issues in companies' strategic plans is a sign of this change, indicating how CFOs are increasingly involved in decisions that affect sustainability and corporate social responsibility.

A new figure with a holistic, more digital and sustainable vision.

The change in the role of the CFO, as highlighted in the note accompanying the research, has roots dating back to the 2000s. At that time, CFOs began to evolve from simple managers of accounting and administrative functions to full-fledged business consultants. This change has seen CFOs become active players in the business, participating directly in operational decisions, both short and medium to long term, and no longer limiting themselves to financial decisions alone. The role of the CFO as a business partner is constantly evolving and gaining importance in the organisation's economy. Today, CFOs must possess a deep understanding of corporate strategy and human capital, demonstrate strong leadership skills, and have the ability to communicate complex financial messages. In addition, they must be able to collaborate effectively with the CEO and other members of the C-Suite, such as HR managers and IT managers. Technology has played a crucial role in this transformation, representing a strong discontinuity factor for the work and role of the CFO. In particular, data has become an indispensable tool to monitor real-time production trends, the behaviour of supply chains and the level of efficiency achieved. This availability of data gives finance managers a 360-degree view of costs, benefits and the overall structure of the corporate workforce. In other words, the role of the CFO has expanded and deepened, requiring a combination of financial, strategic and leadership skills. The ability to use technology and data effectively has become essential to support business decisions and drive the organisation towards success.

A cultural gap in terms of sustainability and technology in our country is bound to penalise our companies on the global stage.

Despite advances in technology and a growing awareness of the importance of digital, the widespread adoption of next-generation technologies and software by companies is still limited. The "Survey CFO 2024" shows that 90 per cent of CFOs surveyed draw up a business plan or strategic plan, with 80 per cent doing so on a monthly basis. The majority adopt a control model, plan budgets, monitor KPIs and prepare business forecasts. However, a significant 34% of CFOs still use Excel to manage these activities, rather than dedicated applications. The lack of funds to invest in digital transformation projects is a major problem, affecting almost four out of ten CFOs. This limits access to advanced technologies such as artificial intelligence (AI), which is only included in the strategic plan by 34.2% of respondents, while 58% do not plan to use it (see also, "How Technology Will Shape the Future of Taxation Systems". Even among the companies that have applied AI to some processes (21% of the total), only 20% of the projects concern the administrative, financial and control area. Although more than 60% of CFOs believe that the use of algorithms is useful for their work, only 14% currently have a budget dedicated to AI.

Information security and business planning are other critical areas with significant delays. Only 55% of CFOs work with a risk mapping and management platform (see also, "Keys to Maintaining Trust and Credibility With Stakeholders"), and only 34% have dedicated resources for cyber security projects. In addition, 52% use business intelligence and analytics tools for analysing sales, margins and forecasts, while only 16% of CFOs work with corporate performance management tools. Sustainability is also an area where we lag behind. Although more than half of companies have considered ESG issues strategically or have started to assess their impact, only 30 per cent have a 'sustainability manager' and only one in three have budgeted for environmental, social and governance projects. Finally, while there is a growing awareness of the importance of digitisation and sustainability, the reality shows a widespread backwardness in the adoption of advanced technologies and in the allocation of adequate budgets to key projects. This gap between awareness and actual implementation represents a crucial challenge for CFOs and their organisations in the near future.

Antonio Lanotte is a Chartered Tax Adviser and Senior Auditor, International Tax Advisor and Business Consultant, Of Counsel Deotto Lovecchio & Partners and in the BOA at the Vernewell Group.

He is a GBBC Ambassador for Italy, a Member of the Dynamic Coalition on Blockchain Assurance and Standardization (DC-BAS), a Member of the Panel of Experts at EUBOF (European Commission), a Member of the Advisory Council at Blockchain for Europe, and a Member of the Scientific Committee at Italia Fintech.