The role of CAO is evolving, from traditional accounting to becoming valued business partners in transformation and strategy.
Amid ongoing economic uncertainty and evolving stakeholder expectations, Chief Accounting Officers (CAOs) are in the spotlight to move beyond numbers and become valued business partners. Strategic CAOs are increasingly leveraging data analytics and technology-enabled solutions to enhance decision-making and actively pivot their organizations to stay relevant.
The pace of change is only getting faster. Amid formidable economic and political headwinds, Chief Executive Officers (CEOs) across the globe are faced with a stark choice—be agile or risk being irrelevant. Stabilizing margins, developing a purpose-driven business, and keeping people at the center of strategy remain the core priorities on the C-suite agenda. As stakeholders ask for more, there is a growing demand for CAOs to take on an increasingly strategic role outside their traditional domain of finance and accounting.
CAOs are on the front lines every day on behalf of Chief Financial Officers (CFOs) addressing regulatory obligations, financial reporting, and transactional accounting matters. This puts them in a unique position to go beyond the status quo and deliver the insights needed to drive real-time decision-making and elevate business performance. To keep up with the roaring pace of change, leading finance organizations have developed an agenda. This includes five pillars of foundational competencies enabling CFOs and CAOs to address disruption head-on:
Strategy and innovation: Creating a culture of innovation to drive agile, effective capital allocation and serve as the enterprise value integrator.
Digital acceleration: Establishing business-led technology-enabled solutions while focusing on enhancing the customer as well as employee experience.
Data intelligence: Using data to inform innovative strategies and generate insights tailored to client needs.
Modern workforce: Reimagining talent strategies to promote digital fluency and enable agility.
Dynamic risk management: Driving innovation by proactively predicting and managing risk and building stakeholder trust.
These five pillars are key to framing the future of intelligent accounting and propelling CAOs to get a perpetual seat at the table.
The pressure from the C-Suite is real. CAOs are constantly walking a fine line between compliance and performance reporting—versus allocating time and resources for strategic insights and analysis. According to the KPMG 2022 CAO survey, executives are looking for CAOs to manage four key responsibilities: governance and compliance; event-driven transactions; business partnerships; and transformation and technology.
A majority of CEOs (51 percent) cited too many manual tasks being performed, and to become successful business partners, CAOs must develop their data and analytical skills. Although CAOs realize the importance of accelerating transformation initiatives to elevate their roles, only 55 percent have facilitated these change enablers.1 Unfortunately, the race to automation and advanced analytics has been slower than what accounting had envisioned.
Considering executive pressures and lack of desired progress, the following levers can guide CAOs to facilitate better collaboration and drive innovation:
Technology platforms like Workday can enable finance and accounting to drive stronger business outcomes with efficient enterprise resource planning (ERP). Artificial intelligence (AI) and machine learning (ML) can also help speed up accounting processes, detect anomalies, and deliver actionable insights—giving CAOs more time to focus on value-added tasks.
To navigate constant disruption, leaders are focusing on cost takeout and stabilizing margins as they seek to capitalize on emerging opportunities. IT innovation is crucial to making businesses recession-proof and achieving sustainable competitive advantages.
Executives are increasingly pursuing digital investments to attain first-mover advantages and establish scalable processes that will allow for swift market expansion. About 67 percent of top-performing companies are transitioning to proactive, digitally-enabled compliance with automation.2 Moreover, with a growing emphasis on ESG (environment, social, and governance) and transparency, integrating sustainability metrics into business decisions is imperative.
With 80 percent of organizations implementing cloud ERP and more than 60 percent adopting predictive analytics, CAOs have an opportunity to work with the C-suite and drive long-term value.3 Optimizing current business models and strategic alliances will be crucial to keep pace with today’s evolving customer demands and build trust.
CEOs are relying on the accounting function to elevate digital fluency and empower teams while serving as the enterprise value integrator and multiplier. As CAOs aspire to become trusted business advisors, it is crucial for them to enrich their data skills, realign their workforce, and rise to support their business vision and strategy.
Data is key to driving digital transformation success. About 75 percent of leading companies agree that effective enterprise data usage can radically change their business model.4 By differentiating important data from the noise, accounting leaders can enhance their organization’s ability to plan, prioritize initiatives, and respond more effectively.
High-performing talent is a key influencer of business agility. As accounting expands its role beyond value preserver to value partner, recruiting new talent with modern skills and competencies is crucial to enabling an agile workforce.
An enhanced business partnership takes on a more strategic and entrepreneurial role as it seeks to understand the market, drive growth, and maximize opportunities. CEOs are increasingly relying on CAOs to act as the “co-pilot” and deliver value across the enterprise while helping to direct long-term goals. As CAOs lead strategy and performance management, building relationships across the board becomes crucial to creating a compelling story and case for change that is backed by data and forward-looking insights.
A successful transformation program relies on a common vision and guiding principles across key stakeholders. Once aligned, organizations can begin their journey by identifying and prioritizing some key enablers for success:
Executives must envision how finance and accounting can help reposition the enterprise strategy and play a key role as the value integrator and multiplier within the organization. By harnessing the power of data intelligence and automation, CAOs can drive better alignment of digital strategy to enterprise business strategy, ensure the right KPIs are in place, close talent gaps, and help cultivate a transformation mindset by creating the vision and a roadmap to achieve it.
