CFO Survey Deloitte: How to survive the CFO Triangle

The Three Topical Themes
The CFO's agenda will in the coming period be dominated by three major themes:

1. Economic Outlook
2. Artificial Intelligence (AI)
3. (Legislation and Regulation on) Sustainability

The economic outlook is causing CFOs considerable uncertainty. Consumer confidence is under pressure, inflation fluctuates, and major geopolitical tensions and uncertainties are ongoing. The wars in Ukraine and the Middle East are causing instability, and it has long been unclear which direction the United States would take in the 2024 elections. The globalized world increasingly faces protectionist or mercantilist measures, as well as an increasing risk of large-scale cyberattacks.
For Dutch CFOs specifically, there is still considerable uncertainty about the exact plans of the relatively new Dutch government, particularly in fiscal matters and labor migration. This raises concerns about the competitiveness of the Dutch economy. This uncertain economic scenario causes the CFO in 2024/2025 to be cautious about (substantial) investments and to tend to temper activities.

AI Has Not Yet Reached Its Full Potential
As in previous CFO surveys, CFOs again indicate that AI is high on the agenda and will remain so. Almost all CFOs report to be in process with AI, but it is notable that new, younger companies are more advanced than the generally older, publicly traded companies. It is expected that the use of AI in decision-making will significantly increase, with forecasts suggesting that AI will be used in 50 percent of strategic decisions within five years. However, AI tools and processes have not yet reached their full potential. Not all CFOs are sufficiently informed yet. Investments in AI also lag the predictions from previous surveys.

Sustainability Pressure
Who could, a few decades ago, have imagined that the CFO in 2024/2025 would spend a significant amount of time on sustainability? Yet, this is a fact. Moreover, CFOs experience increasing pressure to guide organizations in complying with regulations, particularly around sustainability, according to the survey. The finance function plays a leading role and is tasked with mitigating the biggest risks related to sustainability reporting. New European legislation (such as CSRD and CSDDD) demands a considerable amount of time — and probably energy too — of the CFO. The major risk CFOs perceive is that they are primarily focused on compliance in sustainability, checking the required boxes. The critical challenge for the CFO is to use the mandatory regulations to achieve a future-oriented transformation. This is necessary, as societal pressure to expedite climate measures is growing.

How Then? Four Recommendations
How does a CFO survive in a world where economic developments are diffuse, technological advancements are hard to keep up with, and various demands and expectations are set regarding sustainability? The challenge for the CFO is to connect these three elements as effectively as possible and integrate them into business operations. The CFO who succeeds in this may very well be the 'winner' of tomorrow. Tracking the route is not easy. There are, however, some recommendations for the coming period.

1. Emphasize Financial Discipline
   In the current unstable economic climate, CFOs must strongly emphasize financial discipline. There will be less room for nice-to-haves in the coming period. The CFO must focus on investing where it will genuinely make a difference for the organization and the people within it. This should be executed with focus while also allowing for adjustments, being agile and flexible when necessary.
2. View Transformation as an Opportunity
   CFOs should not interpret legislation and regulations, particularly in sustainability, as merely another obligation, but rather as an opportunity for a targeted transformation. Consider CSRD and CSDDD not as ‘reporting tools’ but as ‘steering tools’—as opportunities to set a strategic course that enables the organization to thrive also in the next ten or twenty years.
3. Embrace AI
   Therefore, embrace AI. View data, technology, and AI as empowerment tools. AI is your friend, not your enemy. AI can assist CFOs in their work: in decision-making, in reporting, in outlining future scenarios, and in forecasting. AI is capable of interpreting large amounts of data accurately. AI can, for example, also be useful in the still untapped ESG area, as especially on the ‘S’ of ‘social’ there is still a great deal of work to be done. One thing is certain: the organization that best integrates AI into its operations will ultimately outperform its competitors.
4. Be Open and Transparent
   Furthermore, it is important for the CFO to be transparent. Be open—both internally and externally—about the organization’s progress, even if it is not a ‘popular message’: for example, if climate measures are slower to have an effect than expected. It is better to openly discuss challenges and provide clear insight into scenarios than to ‘fiddle around the edges’ and hope that the setbacks do not end up in the headlines.

Optimism
In this period of economic uncertainty, technological challenges, and sustainability issues, it is more important than ever for the CFO to act as a strategic manager and certainly not merely as the financial caretaker. The CFO should not only report, track performance, and look back; a modern CFO must, based on financial insights, look ahead, steer, adjust, invest, and participate in decision-making. A successful CFO can look beyond the curve, aware of what awaits around the corner. A good CFO is a predictor of the future. The good news is that AI has replaced the crystal ball. This contributes to the optimism expressed by CFOs being well-founded. To realize it, however, will require all hands on deck.