The tech industry is experiencing volatility as it enters a transition phase. The headlines are full of multinational companies laying off thousands of staff, with Google, Meta, and Spotify at the forefront. Tech firms are facing challenges on every front – from adapting advertising strategies to deciding whether to go fully remote.
Increasing interest rates, lower-than-expected earnings, and slow growth has seen over 70,000 tech employees lose their job in the last 12 months. While companies like Meta are seeing an increase in their share price (see why here), the tech industry needs to navigate global uncertainties, new regulations, and macroeconomic uncertainties.
That’s where technology CFOs are stepping up, says CJPI. The role of CFO has evolved beyond financial management with these leadership professionals making a difference in every aspect of the business.
Today’s tech CFOs have the experience to navigate companies through the coming storm while identifying areas for growth, market expansion, and development.
Why Tech Companies are Recruiting CFOs
It’s easy to assume the tech industry has closed the door on recruitment. Companies are continuing to actively recruit, even during widespread layoffs. The prospect of a potential recession and the current macroeconomic uncertainty is leading tech companies to reduce their spending, put growth strategies on hold, and re-think development projects.
The current difficulties are exactly why technology CFOs can make a difference. CFOs are being dubbed everything from ‘Chief Future Officer’ to ‘Chief Forward Officer‘, says Forbes. A CFO’s impact goes beyond the balance sheet to understand its financial DNA and develop a long-term strategy.
Many tech CFOs specialise in certain aspects of the job, from developing supply chain resilience to overseeing debt refinancing and providing financial credibility. Technology companies are approaching the role of CFO as the CEO’s second-in-command and a potential successor to the role.
CFOs make a difference with the experience, tools, and contacts that they bring to a technology business. Many have specialised within the tech industry or come from a diverse background beyond traditional accountancy. The role of CFO is one of the most sought-after leadership positions within the tech industry with CFOs gaining an ever-rising platform.
‘Wartime’ CFOs can enable tech companies to financially survive these periods or identify areas of growth opportunities if they have stable cash flow.
The Challenges Facing Tech CFOs
Technology CFOs are ‘wartime’ appointments, enabling their company to financially navigate economic turmoil and identify potential development opportunities if the company is financially sound.
A tech CFO can make a difference by enabling companies to address and respond to four of the biggest challenges facing the industry.
- Overcoming Macroeconomic Uncertainty
Macroeconomic uncertainty is one of the biggest challenges sitting in a CFO’s inbox. Consumer spending is declining, product demand has dropped, and most companies are seeing a reduced market capitalization. CFOs need to identify ways to boost margins and increase revenues.
Technology CFOs are making a difference by implementing efficiency strategies, integrating automation, and exploring potential mergers and acquisitions.
- Explore Beyond Traditional Tech
Tech companies must look beyond their industry for new waves to grow their revenue and presence. CFOs are exploring ways to bring innovation to different industries through technology, allowing their company to expand through new avenues. Retail and manufacturing are two industries at the forefront of potential expansion.
- Global Uncertainties
Risk management is one of the top responsibilities of a CFO. They must navigate the current global uncertainties, from supply chain delays to rising energy costs. Tech CFOs will make a difference by investing in technology that enables accurate forecasting and real-time data that feeds into decision making.
- Adapting to regulations
Financial regulations fall under the responsibility of the CFO. Everything from social responsibility to climate change is leading to new internal and external regulations, impacting the tech industry’s operations. There are growing demands for increased transparency on the finances of tech companies, along with their environmental impact.
Technology CFOs make a difference by investing in systems to provide real-time analysis of these KPIs and factors, along with business management tools to ensure full compliance with regulations.
What Tech CFOs Contribute to Companies
Tech businesses are turning to CFOs to tackle everything from employee retention to supply chain resilience and investor relations. Agencies like FD Capital are offering dedicated CFO headhunting services, alongside traditional recruitment. Technology companies are actively recruiting innovative CFOs who can address the challenges facing the industry.
CFOs make a difference by serving a dual function. They’re responsible for the company’s financial health and protecting its assets. A tech CFO will leverage technology and software to implement real-time data to ensure that KPIs are being met.
Tech CFOs also make a difference through their soft skills, particularly candidates from non-traditional backgrounds. Every company will adapt the role of CFO to meet their needs, whether it’s preparing for an IPO or overseeing a merger.
CFOs within the tech industry are developing high profiles with many tipped to one day step into the CEO’s shoes. Their focus on strategy and forward development makes them an ideal candidate for a seamless CEO transition, ensuring company stability.
Most CEOs view the CFO as their second-in-command, responsible for overseeing the company’s finances and acting as a bridge between the company and stakeholders. The data-driven insights of a CFO will influence the CEO’s decision-making process.
One of the most practical differences that a CFO brings to a company is their ability to implement strategies to boost productivity and reduce costs. An internal audit by a tech CFO will identify any potential areas of underperformance and propose more effective strategies.
A tech CFO makes a difference by providing the company with financial credibility, making them more attractive to traditional financial institutions and private investors. Hiring a CFO can fill a skills gap within a technology company, particularly if the CEO lacks fundraising knowledge..
Last Updated: July 12, 2023