We keep our ear to the ground for the interesting stats, insights and discussion points you need to feel in the know.

1. DNA of the CFO

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The Chief Financial Officer (CFO) role, like many others, has grown ever more demanding and complex in today’s turbulent business environment. Cutting costs, growing revenue, and ensuring control, has never been easy. But add into the mix things like economic uncertainty, increased regulatory requirements and increased investor scrutiny, and you’ve got quite the challenge on your hands. 9/10 CFOs plan to cut or pause spending in the next 12 months to meet short-term earnings targets, according to new EY research. And 50% plan to make these cuts or pauses in areas considered long-term priorities, like ESG, tech innovation and talent. So how can CFOs maintain their long-term vision in today’s world? Is it even possible? We surveyed 1000 CFOs and finance leaders worldwide; the insights gained helped us create a valuable guide for finance leaders aiming to embrace innovation, unlock value for their teams and drive success across their organizations. 

The CFO Imperative: How can bold CFOs reframe their role to optimize performance?

2. The allure of co-sourcing

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Rapidly evolving tech, rising costs, the pace of legislative change and the race for talent; it’s no surprise that pressure is piling on each and every business area – with no exception. Take tax as an example. 96% of businesses say they are transforming their tax operating model, according to a recent EY survey. But these transformations are more than just adaptations. They are intended to empower tax and finance functions, to inform and influence decision-making across their businesses – and ultimately, deliver more strategic value. So how do you go about transforming a tax department? Co-sourcing. 95% of businesses say they’re more likely than not to co-source tax and finance operations in the next two years; an increase from 81% and 73% in 2022 and 2020, respectively. But wait, how does co-sourcing differ from outsourcing? Co-sourcing is a hybrid approach; co-sourcing with external providers on some activities while choosing to keep others in-house. “Companies have gone from ‘how?’ to ‘now!’” says Marna Ricker, EY Global Vice Chair – Tax. “The conversation around transforming tax and finance functions has changed in five short years from ‘is this something we should do?’ to ‘how quickly can I get the most out of a co-sourcing relationship?’” 

Why five years of transforming tax and finance functions is paying off

3. If you always follow the script, how will you ever change the story?

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Now that we’re clued up on co-sourcing (see “The allure of co-sourcing» paragraph above), here’s a story on how it’s worked in practice. When Discovery Communications identified an opportunity to reimagine its tax function, Todd Davis, EVP and Senior Tax Counsel, Discovery Inc, looked to Ernst & Young LLP and other member firms (“EY”) as a co-creator. “We’d seen a trend for companies to enter co-sourcing agreements, plugging in to the global resources of larger firms,” says Todd. “I was a little skeptical. I wanted to make sure this worked for us.” Todd had worked hard to turn Discovery’s tax function into a high-performing, well-oiled machine and was skeptical about changes that might derail progress. But he saw an opportunity. Here was a chance to create a dynamic, agile tax function fit for now, next and beyond. EY’s capabilities, including its state-of-the-art Global Tax Platform (GTP) that helps businesses future-proof their operations, were pivotal. 

Case study: How collaborating on tax operations powers a focus on strategy and growth 

4. Sustainability is the new market disruptor  

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We all have a role to play in tackling the sustainability challenge, so what about the CFO? Increasingly, stakeholders are demanding more from organizations than a commitment to short-term profitability. And they’re questioning how much of a company’s value is really reflected in its financial reports. “Once it is recognized that ‘business as usual’ is unsustainable, it follows naturally that those organizations which start to develop resilient business models will be the ones that succeed,” says King Charles III. Finance function leaders can deliver several benefits for the businesses they serve, by supporting the transition to a business model more aligned with sustainability and a low-carbon future. But how exactly? For example, through sourcing funding options for green initiatives, evaluating business cases that include nonfinancial value, and reporting on ESG-performance metrics. The finance function has a rightful place at the heart of sustainability transformation. Are you ready for the challenge? 

Why CFOs are key to a sustainable future 

5. Become a master of transformation 

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CFOs have learned from experience that successful transformations are neither easy nor inevitable. At least three-quarters of CFOs surveyed in a recent research collaboration between EY and the University of Oxford’s Saïd Business School, say they have experienced at least one underperforming transformation in the last five years. Adding to this finding, finance function staff were more inclined to believe that failed experimentation would negatively impact their careers (70% of finance workers versus 62% of workers in all functions). This difference was also replicated in the attitude of leaders in their willingness to fund innovation and new ideas (33% of finance leaders versus 41% of all leaders). On a more positive note, the same research showed that by mastering six key levers, finance leaders can increase the likelihood of a successful transformation by a factor of 2.6 – from only a 28% chance of success, up to 73%.