Ep. 245: Tony Klimas - The Future of the CFO Role in Finance 2025 and Beyond

Welcome to the Count Me In Podcast! Join your host Adam Larson and today's guest, financial expert Tony Klimas, as they discuss the future of finance and insights for 2025 and beyond. Tony has 25 years of consulting experience that he brings to his roles as president for Horvath USA. Get ready for a deep dive into the evolving financial landscape and how the role of the CFO is changing. Stay tuned as Tony shares valuable perspectives on AI, machine learning, process automation, and ethical considerations in the finance function. Don't miss out on this engaging conversation with a true industry expert!

Full Episode Transcript:
 < Intro >

Adam:            Welcome back to another episode of Count Me In. I'm your host, Adam Larson, and today we have a special guest, finance expert Tony Klimas. Joining us for an insightful discussion on the future of finance. Tony has 25 years of consulting experience that he brings to his role, as President for Horvath, USA.

In this episode, we'll be exploring the evolve role of the CFO, the impacts of technology and innovation, and the ethical considerations in the ever-changing financial landscape. Tony provides valuable insights on managing stakeholder interests, fostering innovation, and addressing the challenges brought on by automation. Join us as we explore the complexities of the industry, and gain expert perspectives on what lies ahead.

 < Music >

Adam:            Tony, we're really excited to have you on the podcast today, and I just want to thank you so much for coming. And as we get started, how do you envision the role of the CFO changing by 2025 and beyond, in the context of an evolving financial landscape?

Tony:              Hi, Adam. Thanks, it's great to be here. And what a great, first question because that is what's happening today. And I think it's been happening really, probably, for the last 10 or 15 years. If we can define sort of a computing age turning into a digital age, somewhere, maybe around 2010 or so, the early part of this century. And CFOs have been dealing with that ever since, and they're going to continue to deal with it.

In fact, oftentimes, when I talk to clients, I like to remind them that we're in the early days of this digital age. It's like the early days, in the late 1940s, when computers were still powered by vacuum tubes and they filled an entire room. The changes and the advances are happening so quickly, and they're going to accelerate. And I think CFOs, on the one hand, it's a great time to be a CFO because you're watching all these fantastic, incredible things happening. But it also presents a lot of challenges. 

And the one thing I would say that's changing the most for CFOs, is their job is becoming incredibly more complex than it ever was in the past. And you see this when you look at the organizations of large companies. For example, the Chief Accounting Officer, for a large part of my career in finance and accounting, I didn't really see chief accounting officers. It was usually just a CFO and a controller.

Now it's very common to have both a controller, a CAO, a VP of finance who's in charge of the forecasting and planning process, and, then, of course, the CFO. and you might even have other folks; elevate, investor relations, and you'll often even have a digital person in there somewhere. 

So the role is becoming more complex. Who the CFO surround themselves with is becoming more important. And I think a lot of them, especially, the ones who don't quite see that coming, are struggling. Because it's just so much more to handle than they ever had to handle in the past.

Adam:            And you can't talk about the future and where things are going, without hearing the terms AI, and machine learning. And it's funny because if you ask somebody who knows about those things, they're like, "Well, artificial intelligence and machine learning have been around for a long time." But it's advancing more and more and more. Do you think that what jobs and roles, within finance, are going to become obsolete because of those things? Because they're advancing so much, that it will be taking people's jobs?

Tony:              Yes, it is a good point. As an undergrad, I was actually a math major, and I actually took some courses in neural networks, and some of the probabilities that are being used in some of these algorithms. And a lot of the math hasn't really changed that much, but how we apply the math and then, of course, the computing power is what has really created this environment now. 

Where we have all this new technology that both mimics intelligence, that would be AI. And, then, of course, machine learning is machines that are getting smarter, as they learn from their mistakes and then apply those, again, in an algorithm.

And, so, I think what's changing most, from a CFO perspective, is it is having a huge impact on the finance and accounting organization in the way we work and the work we do. In the same way that the pandemic impacted the way we hold meetings. And the way we now do things, virtually, the way we work. These technologies in accounting, and a lot of people are still trying to figure them out.

And, this is my opinion here, but I think one of the ways that's very important to think about these technologies is they're not just side thing. A lot of people are really enamored with some of these Internet tools. Where they can type a question into Chat GPT and get an answer. 

Yes, that's interesting, and it can produce an interesting answer. But the reality, the real value of these tools, is when we embed them into the technology stack, and we start to use them for both decision support, and to give us better insights than we had in the past. And when we start to do that, then we unlock the value of our data and they start to become super valuable for us.

And, sure, we're using them to automate things like the closing process. Last week I was with the folks from BlackLine, at their annual user conference. They focus heavily on AI and machine learning, and that's going to impact the organization. So they is a people side of this, and I think we're going to talk about that some today. 

But then there's also a capability side. And if you can get the capability ahead of your competition, you can really get an advantage in the marketplace, from these technologies. But it has to be embedded, and it has to really be part of the fabric of how you operate, it can't be a side thing. In that case, it's more of a toy, to me, than something really useful.

Adam:            Yes, it really is a toy. Now, there was a stat that I read in your white paper, The Finance 2025. That said that 87% of CFOs surveyed see an increase in process automation as a key goal. What are some of the opportunities there, for CFOs as they're looking to the future?

Tony:              Well, if ...