The role of the CFO is evolving from financial stewardship to strategic business leadership. As organisations navigate global uncertainties, rapid technological change and the growing pressure to balance profitability with growth, finance leaders must look beyond the numbers to guide investment, manage risk and build long-term value.
In an exclusive conversation with The Mainstream, Amit Parmar, Chief Financial Officer at Ace Pipeline Group, shares his perspective on the evolving role of CFOs as strategic business partners, the importance of disciplined capital allocation, and the challenges of evaluating AI investments for measurable business value. He also discusses how finance leaders can strengthen operational efficiency without compromising growth, navigate global risks, and build the stakeholder confidence and organisational resilience needed for sustainable long-term value creation.
- The CFO’s role has evolved beyond financial management to becoming a strategic business partner. How do you approach this responsibility when balancing business growth with financial discipline?
The CFO plays the role of a key decision maker, along with the CEO of the Company. The CFO is a strategic partner as much as a financial enabler. Disconnect between the two can be catastrophic to any company. Financial Management is the basic premise of any CFO role; however, it does not end there, it actually begins here.
A CFO develops fundamental business insights from financial management, financial health, stake holder expectation management, statutory and business risk mitigation. This cements the CFO’s position in the Organisation as an all-important custodian.
The CFO can connect various dots which may be difficult for many other functions. The CFO can provide valuable strategic insights and support the CEO in calibrated decision making. What is important for any CFO to realise is, while financial discipline is important, exceptional business growth is not possible without getting out of your financial comfort zone.
When I have to play a strategic role, I retain my CFO brain, but connect my heart to that of the CEO. Businesses are dynamic, and sometimes, numbers can not accurately predict the future. The basic thumb rule to follow is that any new major decision should not jeopardize the business existence. Understanding the vision/direction, attuning the business capabilities, performing requisite diligence, questioning risks/uncertainties and ring-fencing the process is what I try to do, to deliver my responsibility of a strategic business partner.
2. The CFO’s role is expanding beyond financial stewardship to influencing business strategy, transformation and long-term value creation. How has this role evolved, and what does it take for finance leaders to become stronger strategic business partners?
Financial stewardship remains the foundation, which catapults the CFO to establish better influence over business strategy. However, the time spent on financial stewardship is reducing by the day. With the advent of better technology, financial stewardship requires lesser time than it used to.
As the global economy matures, and India moves from being a Developing nation to a Developed nation, the role of a CFO changes dramatically. With Globalization, businesses are increasingly working internationally, and have unique opportunities as well as threats. Under such circumstances, the CFO needs to build a global knowledgebase, and connect with professionals across the globe. It is important to communicate with peer CFOs in the industry or outside. CFOs/Finance leaders need to move out of the cabin regularly and connect and network to create long term value for the organisation.
- Capital allocation can determine whether a business creates lasting value or struggles to sustain growth. What key factors guide your decisions on capital expenditure, expansion and return on investment?
Return on Investment/Capital employed is the fundamental health check of any business. If a business is not able to sweat its capital efficiently, it will fail to attract stakeholders. But not every capital allocation decision will generate the expected return. Some deliver better than expectation, and some will destroy capital.
Every capital allocation decision should have an underlying math, and it is the duty of the CFO to sufficiently gauge the fairness of that math. Capital allocation should result in improvement of the ROI, and not drag it down. Some investments can be a short term drag, but create significant value in the long term. Certain investments (eg. Marketing spends) do not have an immediate direct correlation, and need a different magnifying lens.
It is important for the CFO to embed with the organisations short term / long term growth needs, capture the pulse, and accordingly question every capital allocation decision.
- Technology and AI are increasingly influencing business strategy and financial planning. How can CFOs evaluate these investments and ensure they deliver measurable business value?
I recently read a survey by Deloitte spanning 1400+ Finance leaders across the world, where about 43% professionals considered AI and related technology as a key priority for FY 2027 and beyond. This demonstrates that AI deployment is on top of everyone’s to-do list, when it comes to organisation-wide efficiency improvement.
Artificial Intelligence (or Super Intelligence as some may call it) is evolving at a rapid pace, and businesses are scrambling to equip themselves with AI. However, it is important to be aware that the scale of improvements happening in AI on a daily/weekly/monthly basis is phenomenal. LLM’s are evolving at a rapid pace.
One hasty decision can result in marrying an old AI architecture, which may not keep up with the latest developments. Hence, it is crucial for the CFO the assess AI investments radically. ROI is extremely difficult to gauge, and so is business value created. Some AI investments can turn out to be of nothing but of aesthetic value.
CFOs need to retain focus on strengthening the ERP of the organisation. The way AI is developing, it will act as an agentic layer on the existing ERP and we would probably have different AI agents over different modules. Eventually, what will matter is the efficiency improved, and the value created. If the backbone (ERP) is strong, no organisation will face any difficulty in deploying AI to improve planning, execution and decision making. Making the existing ERP redundant, however, can be detrimental, till the time AI can be relied upon for end-to-end seamless business interface. Till we reach that level of AI advancement, CFOs need to experiment, fail fast, and deploy meaningful function-wise AI agents across the organisation. It is more measurable, scalable and solvable than a big bang deployment approach.
5. Cost efficiency is often seen as a finance priority, but it also depends on operational discipline and business-wide accountability. How can CFOs work with other functions to improve efficiency while protecting growth and innovation?
Companies compete for customers, and competition is cut-throat in any industry. One of the basic premises of being better than the competition is being more efficient than the competition. Naturally, cost efficiency is a fundamental reason why organisations can thrive or conversely struggle.
Cost efficiency should not result in unwanted frugality at the cost of growth. It should support growth, and not hamper it. It simply means, ‘delivering the same/better value at a lower cost’.
Business wide accountability starts with having and diligently measuring KRA’s and KPI’s across the organisation. The CFO needs to work closely with the CHRO to ensure implementation and measurement. Operational discipline and efficiency need to be rewarded, and inefficiency needs to be penalised / rectified. The CFO may also want to explore external consultants and better technologies along with the COO when it comes to improving cost efficiency. Naturally, all this requires investment.
Benchmarking with best industry-wide practices is also one way to improve operational discipline. Cross knowledge of ways of work across the industry helps. A standard practice is recruiting personnel from a competing organisation better than yours, to learn, and if suitable, implement best practices.
6. Looking ahead to the next three years, what capabilities will distinguish CFOs who can successfully balance growth, profitability and resilience while creating sustainable long-term value?
I believe the following capabilities will be essential for me and my fellow CFOs to successfully balance growth, profitability and resilience while creating sustainable long-term value:
- Ability to assess & deploy AI & technological requirements of the organisation to keep pace with competition
- De-risking global macro headwinds (war risks, commodity risks, currency risks) – ability to create opportunity under threat
- Ability to attract patient capital in the Company
- Building confidence of the Board and being closely involved in strategic decision making
- Active and effective communication with stakeholders and addressing their concerns
- Attracting and retaining good finance talent
Also read: Viksit Workforce for a Viksit Bharat
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