'CFOs need to be innovators'

The role of chief financial officers (CFOs) has undergone significant changes since 1980s with some of the biggest changes taking place in the recent decade.

With the globalisation and opening up of the markets, the number of employees in the organisation has fallen but at the same time the bottomline has swollen incredibly.

With the new ways of doing business like partnership and outsourcing, and companies concentrating on the core competence, the role of the CFOs in the enterprise has changed from the person who looks into the nitty-gritty of finance to a strategist and innovator.

"The product cycle and the technology cycle has shortened and now, the only premium is innovation," says Ravi Uppal, deputy chairman, CII, southern region and vice chairman and managing director, ABB India.

He added that the CFOs have become the best partner of CEO and the lines of operation between them are gradually fading.

The three key areas of CFOs are, providing strategic business advice to CEOs, improving the companies' organisational controls and ensuring the cost efficiency of the finance and accounting functions.

With the outsourcing of finance and accounting, the CFOs have additional job of reducing the F&A costs and infusing flexibility to the business so as to make it profitable.

Speaking at the CFO meet by CII on 'Strategies for competitive advantage and increasing shareholders value', Hemu Javeri, president, Madura Garments said that the CFOs have evolved to become an important bridge between the CEO and the board of directors.

He said, the "blow the whistle" job of CFO is the most daunting as he also is a part of the team.

Inderpreet Thukral, Director, strategy and business development, IBM, said that CFO's role in strategy is key. "There is always a question of what is strategy and what is not," he said.

He added that strategy and execution are inseparable and so the CFOs must be innovative and also must have deep appreciation of the organisational limitations.