Hospitality CFO 4.0

A New Way of Working

How is the role of the hospitality CFO 4.0 changing, and what are the priorities for the coming 12 months?

The last ten years have seen a boom in new technology. From AI to the cloud, to Big Data, digitisation is here to stay across every industry. For the hospitality industry in particular, digital acceleration has stepped up a gear in the last two years, expedited in many ways by the global pandemic.

While digitisation is touching all areas of the hospitality industry, its impact is perhaps most keenly felt in the finance function, with the transformative power of digitisation leading to the reinvention of hospitality finance, placing it at the very heart of the business.

But what of the hospitality CFO?

This major repositioning of the finance function represents a new opportunity for CFOs to spearhead strategic change to boost overall business performance. The hospitality CFOs of today have the potential to become the architects of value creation, achieving the most ambitious of growth strategies through operational and customer service excellence.

The Changing Role of the CFO

So, what has changed for the hospitality CFO? Once the gatekeepers of business-critical finance data, CFOs are escaping the confines of traditional backwards-looking reporting and taking a more strategic role. They’ve moved beyond number crunching, instead focussing on data analysis, interpreting the large amounts of data generated by and available to hospitality businesses today, and turning it into valuable, actionable insight.

It is this timely, accurate and business-wide insight which underpins rapid, robust decision-making, driving organisational purpose and laying the solid foundations for a truly agile, responsive and resilient hospitality business. It’s not just financial data that’s involved either. With the right tools in place, finance leaders can amalgamate and analyse information from right across the business, from housekeeping to front-of-house, factoring in an inordinate amount of information to form a comprehensive view of the organisation on which to base all decisions.

It’s this ability to put informed decision-making at the heart of every aspect of the business that is so transformative. With this new approach to finance comes greater precision in forecasting and planning. Reports and forecasts are rooted in comprehensive, robust insight, ensuring greater accuracy when it comes to making decisions today that will have an impact tomorrow. This access to such in-depth, actionable insight is what’s turning the CFO from a reactive to a proactive role, able to furnish the business with the insight needed to underpin that all-important organisational drive to grow profitably.

In light of this change in the CFO role, what does this mean for priorities over the next 12 months? How can they put their new skill set and focus to work for the good of the business, building a culture of data-driven decision-making with sights firmly set on building back stronger?

Customer & Pricing Strategies

Not unrelated to revenue building is the issue of customer and pricing strategies. Customer strategies may have not traditionally been the domain of the CFO but in this brave new digitised world in which we’re all operating, the CFO can hold the key to analysing customer behaviours against the backdrop of financial information, correlating past behaviours and preferences with spend and profitability.

This contextualised insight is what can help to build truly targeted customer strategies, learning from past experiences as well as taking into account accurate forecasts and predictions. It’s the same for pricing strategies. The ability to factor in not only historical information but precise forecasts, competitor information and other external factors, helps to refine pricing strategies. These aren’t static either.

Gone are the days when hospitality businesses had to wait for weekly or even monthly reports to come around to plan pricing strategies, such is the real-time nature of the insight available to the CFO and the rest of the business, that what results is an agile, responsive pricing strategy, one which can evolve in-line with fluctuating demands and changing market dynamics. Ultimately, the insight available will optimise revenues, having a welcome positive impact on the bottom line.

Scenario Planning

As the last two years have shown us, we need to expect the unexpected. Again, this is another area where the insight-enabled CFO is well-positioned to help. Whilst we can’t predict for definite what will happen, we can plan for all eventualities.

In-depth and comprehensive scenario planning is rapidly becoming the new normal, with the speed and breadth of insight available enabling hospitality businesses to make plans but with the agility to change tack quickly and easily should circumstances dictate. This is new ground for the industry. Whereas in the past businesses could perhaps respond reactively to changing situations, often taking time to regroup and regather in light of unforeseen changes, there’s now more of a proactive culture, with new plans waiting in the wings to be implemented quickly and seamlessly as soon as it’s deemed necessary.

The Rise of the CFO 4.0

For the hospitality industry, the CFO 4.0 has the potential to herald a new era, putting data-driven decision-making at the heart of every business. Having the right technology at their disposal is key, with even the most forward-thinking and digitally-minded CFOs unable to derive optimum insight from data without the right systems and solutions in place.

Flexible, scalable and business-wide solutions must be the order of the day for hospitality businesses who are serious about growing a stronger, more profitable business. This in turn will help to nurture this next generation of CFOs, furnishing the business with the insight needed to take the business from strength to strength today and beyond.