Traditionally, CFOs have relied on historical data and forecasting methods in creating strategy. But as panelists at the CFO Kick-off summit noted, changes in consumer habits and the global economy have placed heavier demands on finance executives.
The demands of the present day require CFOs to analyse large amounts of data to ensure they stay ahead. At the CFO East Africa Kick-off Summit, finance leaders unpacked how ‘big data’ is changing how they approach decision-making. Their insights made it clear that the modern CFO is no longer just a custodian of numbers but a strategic partner to the CEO and the business. According to Central Bank of Kenya finance director Caroline Mackola, this has made financial decision-making a more complex affair.
“Previously, the CFO role was more about bookkeeping, sharing insights, and reporting historical data. However, as I mentioned earlier, the role of the CFO has evolved significantly over time. We are now seeing a lot of consumer-driven decision-making and consumer insight-driven decision-making that needs to be implemented,” she said.
She noted that this has placed increasing pressure on organisations in industries such as fast-moving consumer goods (FMCG) and banking to be agile and responsive.
“In the CFO role today, you are almost expected to be a strategic decision-maker and even support strategy development. Beyond that, consumer insights provide the impetus and requirements to drive strategy. Because of this, there is an implicit expectation that you must be able to synthesise all the incoming data and make decisions quickly,” she said.
The impact of big data cuts across many industries. As Kenya Airways chief strategy and innovation officer Hellen Mathuka revealed, the national carrier now uses customer data to predict the movement of passengers and optimise its routes. This has been a key part of the airline’s growth strategy.
Mapping out growth opportunities
“It is important the way you think about growth, because you should be informed by a lot of market studies, data analysis, competition and such things. You might think we only look at competition and passengers moving from one area to another. But we look at how you spend, including credit cards. It’s very important to see what credit cards are buying. Are they buying consumer goods, or are we flying? And if you’re flying, then we follow exactly where you went. So big data is important. How do you start using AI to start determining the next move?” she said.
Exim Bank Tanzania founder Hanif Jaffer affirmed that technology had revolutionised decision-making in the financial services industry and put large sets of data at the disposal of banks. He noted that data analytics was crucial for understanding customer behaviour and driving financial inclusion in the banking sector. This has allowed banks to provide personalised financial products.
“We had to look at how we can do things differently.We have spent millions of dollars bringing in new technology, bringing in AI. We are now looking at how customers are spending money, and what we can do to get that business to us? So these are things that are now part of our strategy,” he explained.
As Caroline noted, the FMCG sector now thrives on big data. Customer insights allow companies to adapt their pricing and distribution strategies to drive profitability. To this end, Beiersdorf finance director Funlola Pearce, advised CFOs to immerse themselves in customer interactions.
Changing course
“It’s about identifying what’s going on and where you can make optimisations within the organisation. With the global tech evolution, you find that you have vast amounts of real time data. And so on that basis, you can look at what is going on, and then, you know, go to your commercial colleagues to say, look, we need to change this. We need to look at the value chain. And that's all strategy, and looking at how to correct things to ensure that we add value to the organisation,” she said.
Although the panelists stressed the need for CFOs to be part of an organisation’s broader innovation strategy, they warned against using data without context, emphasising that strategy must be continuously reviewed and adjusted.
“Our process is to test, confirm it can work, and thereafter performance management to ensure that it’s being implemented and achieving the results that we intended. If the results are not being achieved, we quickly change direction. And I think that’s a lesson. If the strategy is not working, change direction,” Hellen said.
Looking ahead, the speakers predicted that big data and AI would continue to shape the role of finance executives in the coming years. Funlola noted that the shift towards automated decision-making would free up finance teams to focus on strategy rather than operational reporting. She advocated for blending technical expertise with strategic foresight to thrive in an unpredictable business environment.
“In finance, it’s very critical that we partner with the other functions. So for example, go to trade with our commercial colleagues so that we can understand the challenges they are having and recommend strategies to help resolve some of those issues,” she said.
Unga Group acting managing director James Nyutu encouraged CFOs to take time to understand all aspects of the business.
"Do not just sit in the office and approve credit limits or deny the same, without understanding what's happening to the business, because that is what we feed into, that strategy the organisation is going to revise going forward," he said.
