For CFOs, the business itself is their biggest customer and most important client.
And given the increasingly dynamic operating landscape today’s middle-market businesses are tasked with navigating, ensuring that their own firm is leading the charge relative to peers and competitors is top of mind for forward-thinking finance teams and treasury functions.
Fortunately, and as top finance leaders have repeatedly told PYMNTS for the series “A Day In The Life of a CFO,” the chief financial officer role has never been more strategic than it is today. Those finance teams that embrace a focus on competitive positioning, cost management, growth, and digital transformation are increasingly finding themselves at the forefront of efforts to steer their companies toward success in an uncertain world.
Middle-market businesses, defined as companies with annual revenues between $10 million and $1 billion, play a pivotal role in the global economy. They are often characterized by their nimbleness, innovation and growth potential.
However, the operating landscape for these firms is becoming increasingly complex due to four key factors that encompass the rapid pace of technological advancement, changing regulatory requirements, the interconnectedness of the global economy and ongoing shifts in customer and end-user preferences and behavior.
And as the economic environment continues to evolve, competitive positioning is emerging as not just a concern but a significant driver of uncertainty for CFOs.
Read more: Why There Are No Sacred Cows for Today’s CFOs
Data from the most recent Uncertainty Project report by PYMNTS Intelligence, “Middle-Market CFOs Tag Competitive Positioning Among Top Drivers of Uncertainty,” sheds light on the priorities and concerns that are top of mind for CFOs, particularly those in the middle market.
It finds that, with the specter of economic uncertainty looming large, these financial stewards are increasingly focused on maintaining and enhancing their companies’ competitive positioning.
Business performance had 27% of CFOs worried in May, and key drivers for that worry include cash forecasting and cost control. Competitive position also continues to concern 25% of CFOs, with pricing a significant factor. This concern underscores the complex environment in which businesses operate, where staying ahead of competitors requires constant vigilance and adaptation — and it marks the third consecutive month in which competitive position has weighed heavily on CFOs’ sense of certainty.
“I feel immense accountability for how every team across our business performs,” Lauren Dillard, executive vice president and CFO at LiveRamp, told PYMNTS. “Smart and tight expense management is key, as is partnering with the business to really understand those different expense levers and ROI data so that we can quickly move the knobs and dials if we don’t see revenue materialized in the way we planned.”
As the year has gone on, CFO’s concerns around their organization’s supply chain integrity have fallen, the data shows, while the worries finance teams harbor around macroeconomic conditions and business performance have only grown between February and May 2024.
That’s in part because, as can happen over time, many CFOs ultimately are finding themselves facing mid-year troubles. Projected deals may fall through or get delayed, and cash forecasts can prove increasingly uncertain or inaccurate. The PYMNTS Intelligence research highlights other key areas of focus for CFOs, including the management of operating costs and the pursuit of organic growth through market expansion and product development. These priorities reflect a comprehensive approach to navigating the uncertain economic landscape, balancing the need for efficiency with the imperative for growth.
See also: CFOs’ Top 4 Concerns Reveal Importance of Controlling What’s Controllable
“The finance function is one of the roles that sits with a 360-degree view of everything and is the one, at the end of the day, that’s charged with the performance of the business,” Scott Casey, CFO at Robin AI, told PYMNTS.
Still, just 25% of CFOs reported using analytics to forecast trends and gain insights — a significant drop over the past several months, and one that hints at an emerging emphasis on process automation, new workflows, and dedicating human resources effectively mitigate uncertainty.
“Chief value officer, or CVO, might be a more suitable title in the future for this position where you’re looking at not just financial analysis, reporting and controls, but value creation and how to use those resources to drive value creation for the company,” LiquidX CFO Abhishek Khandelwal told PYMNTS. “It’s critically important to strike a balance in being a financial steward of the company and at the same time supporting the innovation that can drive future growth.”
One of the most telling findings of the study is the growing emphasis on technology and digital transformation by CFOs. Data shows that middle-market CFOs with more thoroughly automated financial operations are almost eight-times more likely to report high certainty than those with less automated operations. Specifically, 80% of middle-market companies with more than half of their financial operations automated report high levels of certainty.
As Bloomreach CFO Ninos Sarkis told PYMNTS in an interview posted in November: “You can’t control the geopolitical tensions, but what you can control is making your business stronger and more resilient during these times so that you come out the back of it a stronger company. … There’s a lot of relatively low-hanging fruit to make a business more efficient, more scalable and more automated.”