For any business leader, identifying value in a networking group can be a daunting task. For finance chiefs at the CFO Leadership Council’s Fall 2024 Conference in Dallas, Texas earlier this week, the opportunity to learn from a variety of their peers was the value driver this time around.
Speakers ranged from global organizations like Ogilvy, WM (FKA as Waste Management) and Hewlett Packard to smaller company CFOs from areas like insurance and construction and they provided valuable insights on leadership, culture, relationships with other leaders, generative AI and more. Below are five takeaways from the event.
1. The growing importance of the CFO-CIO relationship around cybersecurity
Marie Myers, CFO of Hewlett Packard Enterprises, highlighted the rapidly growing importance of the CFO-CIO relationship. While she said this is a relationship that is required given her company’s size and industry, she advises any CFO using data and technology in the decision-making process to foster this relationship so the business’s technological needs can be met with a proper financial approach, particularly when it comes to cybersecurity.
“I am seeing a trend more and more today where CFOs are actually owning the IT functions and the cybersecurity function,” said Myers. “Cybersecurity is such an important space, and it’s not just the technology, it’s the government that controls part of it. As a CFO, I always look to [my role] and the controller role as being the sharp edge of the spear for the controls and governance of the company.”
“The cybersecurity and CISO part of it plays into the controls environment, so you have to keep that relationship close to yourself. I chair audit committees, and there isn’t a month that goes by these days that companies aren’t getting data breaches, so CFOs need to be on top of that,” she said.
2. Talent is still the biggest asset
Stacey Ryan-Cornelius, global CFO of Ogilvy, spoke about the importance of talent within her organization. As a legacy global marketing company, Ryan-Cornelius has to manage a lot of moving pieces. But, as she said herself, the company’s biggest asset isn’t something you can find in books or within the tech stack.
“My biggest asset is not on my balance sheet,” said Ryan-Cornelius. “It’s the talent.”
3. Rising health care costs concern CFOs
One of the most coveted sessions that had CFOs locked in was on mitigating rising health care costs by leveraging health care data. While these costs are mostly outside the realm of control for the business itself, taking a proactive approach to health care costs, including using data as much as possible in the decision-making process around health care offerings, can provide a huge upside to costs whose rate of increase shows no signs of slowing down.
4. CFOs who negotiate terms and outs with technology providers get better deals
In a panel discussion on technology titled, “Assessing and Structuring the Finance Tech Portfolio: Lessons from CTO to CFO,” Melissa Hurrington, CFO of Premier Claims; JJ Pace, CFO of Service Pros Installment Group; and Anurag Yagnik, chief technology officer at Prophix, discussed how CFOs can become a more informed buyer of technology. The panel agreed that CFOs must negotiate their own terms and conditions that provide opportunities for outs.
- Hurrington’s advice: Negotiate strong terms with multiple opt-out points so a technology provider isn’t able to drag out the process longer than initially anticipated.
- Pace’s advice: Have the technology vendor provide references of customers who have recently canceled the product. Not only will this provide insight into some of the problems companies ran into around the technology, but if a company is unwilling to give up this information or says they don’t have any cancelations, that’s a red flag itself.
- Yagnik’s advice: If the vendor tells you it’s going to take two months, it’s probably going to take four, maybe even six. He then added that six months is too late. Six months into a technology implementation, outside of things like a major overhaul to an ERP system or something that is overhauling the business, the six-month mark is usually a “rule of thumb” of success. He says CFOs should put the impetus on providers to meet the demand when there are signs of delay. “Ask, what do I have to do to bring up this technology in one or two months?” he said.
5. CFOs are ready for generative AI’s use, but still unsure of its role in the tech stack
Most CFOs have a general understanding of how generative AI works. As industry- and business-specific large language models begin to hit the tech market, a majority of CFOs should be ready to properly articulate the expected benefit of a generative AI product, evaluate its efficiency and effectiveness, ask the proper cybersecurity questions and be able to negotiate its cost.
In the session with Myers of Hewlett Packard, an attendee asked a question that had a lot of heads around the room nodding in agreement. She asked about the degradation of AI investment due to cost and cybersecurity concerns taking place in her company, and how, if the technology market steers to the dominance of AI-driven products, CFOs in her position can adjust.
Myers credited her question as being a good one and said it’s important for CFOs in her situation to stay vigilant and aware of the developing AI space and be in the loop of the challenges the business is facing to try and solve solutions at a later date.
