THREE MAJOR CHALLENGES FACED BY CFOS IN 2023 AND HOW TO NAVIGATE THROUGH THEM

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THREE MAJOR CHALLENGES FACED BY CFOS IN 2023 AND HOW TO NAVIGATE THROUGH THEM

In 2023, CFO are faced with a very complex, uncertain and a highly volatile business sphere to operate in. Currently, CFO’s are made to deal with the aftermath of the Covid-19 pandemic, the unending pressure to adopt ESG reporting, the need for digital transformation as well as post-election economic meltdown for the Kenyan based businesses. Amidst all these, the CFO is still supposed to be a leader and empower his/ her team while at the same time, ensuring the firm is financially stable and growing as projected.

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Looking at all the issues stated above, one is left to wonder, how can a CFO deliver value to the organization amidst all these chaos? To answer this question, we will take a look at the 3 key challenges as suggested by the Gartner Survey which was carried out in July 2021 on a sample size of 234 CFO’s: –

  1. Hire and retain the best talent – This is one of biggest challenges CFO’s face as suggested by the 42% of the respondents. It is vital to have a team that has the relevant skillset for the job, with the right mindset and a culture that is supportive of the organizational strategic goals, vision and initiatives. After acquiring the right talent, the next challenge is retention. CFO’s should achieve this through flexible work arrangements, competitive compensation packages (Salary + benefits) as well as ensuring there is continuous learning and development so that the team can stay abreast of the ever changing financial needs and technologies.
  2.  Do proper forecast/ Budget – 36% of the respondents picked this as the second most challenging task faced by CFO’s. It is important for the finance bosses to come up with forecasts/ budgets that are resilient and agile in nature. This is paramount in ensuring timely as well as well informed decisions that adhere to the volatility of the markets. These forecasts should be clear and easy to understand by all decision makers within the organization, regardless of their comprehension of finance. As we all know, failing to plan is planning to fail, it is therefore important to have a well-articulated budget early enough.
  3. Cut on unnecessary expenses/ Costs – This comes in 3rd with 35% of the total votes. It is important to have an optimal cost structure. This can be realized through efficient and effective allocation of the available resources. CFO’s should ensure total elimination of wastage and obsolete systems and processes. Their focus should be on investing growth driven initiatives as well as innovative ways that give the company a competitive edge in the markets, they operate in. When it comes to the assessment of the profitability and viability of the company, focus should be put on bottom-line, and elimination of any unnecessary costs eating into the top line – completely eliminated or properly managed.

 Let’s engage: What are some of the other challenges you face as a CFO? How do you intend to solve them? Please share your thoughts and insights, and let’s keep this conversation going?

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