A lady presenting figures to her colleagues

The role of a CFO is rapidly changing. Are you ready? Source: Shutterstock

How is the role of the CFO changing?

IN a digital economy, the requirements of a Chief Finance Officer (CFO) are changing.

Not only do CFOs need to be well versed with money, they also need to know how technology will impact every part of the business function.

In fact, finance professionals are a unique group of people who are not only money-oriented but also trained to make important decisions that align with business strategies.

Any financial professional will understand the process of making decisions based on the SMART goals: Specific, Measurable, Attainable, Relevant, and Time-bound.

Not only do they understand money, any investment out of the corporate account must be justified with a measurable return of investments (ROI). This is calculated based on the relevance of an investment to the company, the time spent on a project and how it affects other business functions.

In the finance sector, robotic process automation (RPA) is slowly replacing a lot of the repetitive accounting functions such as balancing the books.

In its stead, the function of a finance professional today is to identify new revenue stream, manage risk, and understand the changing regulations. Not only how a certain project will bring revenue and profit, but also the potential risks to an organization.

At the Association of Chartered Certified Accountants (ACCA) conference in KL on Tuesday, panelists unanimously agreed that a CFO would first need to change the culture of a company, in order to enable that change across the organization.

The panel was attended by Steve Cox, Group Vice President ERP (Enterprise Resource Planning) & EPM (Enterprise Performance Management), Oracle; Ann Furlong, Director, APAC Customer Service Team and Global Enablement, Blackline; Alvin Gan, Executive Director, KPMG Malaysia; and Tony Ong, CEO, Xtrategize Technologies.

Across the panel, everyone echoed similar sentiments; noting that there is a need to encourage a culture that embraces change.

Several of the panelists remarked that traditional financial departments tend to have a risk-averse attitude.

Furlong from Blackline noted that most financial personnel wouldn’t have the technological ability to execute any changes.

She advised CFOs to partner with- and not fear- IT teams.

“It’s about changing the culture, the people, and the value of what is expected of an accountant. It’s not just debits and credits,” explained Furlong.

Oracle’s Cox laid out three key skills that he’d observed many newly appointed CFOs possess, and how that would help them drive change in the organization.

  • creative thinking: be innovative with different ways of doing things
  • design thinking: focussing on what outcome you need
  • complete mastery of data: understanding how to draw meaningful insights from data and how to convey that to stakeholders.

Ong of Xtrategize suggested that CFOs can start by talking to peers who have embarked on similar journeys. He explained that often executives can learn a lot from other companies and understand what challenges they are facing.

Ong also urged the attendees to talk to multiple vendors, as well as other people in the organization, as they can provide insights on the best way forward.

“You don’t have to go at it alone, there are many resources available to you,” Ong told the audience.

He also highlighted that besides normal skill sets, CFOs need to pay attention to the people. Unlike other transformation programs, automation and technological changes are stressful for people.

CFOs need to make sure these changes don’t negatively impact individuals. For example, inadvertently causing their staff to lose confidence in their jobs.

It is important for CFOs to have a good strategy and identify the opportunities instead of focusing on the restrictions. KPMG’s Gan suggested four steps for CFOs to follow in kickstarting any projects relating to RPA.

  • Plan – Look at the financial processes of the organization. Any repetitive workloads that are heavily reliant on manual labor are ripe for automation
  • Build – Create a proof of concept (PoC). The management still has to buy in and the best way to showcase the capabilities of a new technology is to create a PoC. It’s essentially a visualization of how the system will improve work processes.
  • ROI – Investment is important. Finding a good business partner that can help you realize the potential is important.
  • Run – How should you continue this process? Gan suggests having a center of excellence in technology is key to continue this journey.

Most importantly, everyone on the panel agreed that CFOs need to be prepared to fail- and fail fast.

Outcome and strategies change over the course of time, and CFOs need to constantly evaluate and have a clear understanding of the risks, strategies, and technologies available to them.