CFOs need to co-pilot in new business models, lead in data governance and wear several hats, said ACCA recently when releasing findings of a research.
The findings have been published in a report titled Finance of the Future: Being a Resilient Digital CFO, which was jointly developed by KPMG and ACCA, supported by INSEAD EMI, and based on a series of surveys involving responses from more than 850 participants, ten interviews and two roundtable discussions in the past year.
Companies are pushed over technology tipping points and many are in the midst of transforming businesses to stay competitive in this new economic environment, Juvanus Tjandra, Partner, Advisory, KPMG in Singapore pointed out.
“Despite a responsibility traditionally held by Chief Technology Officers (CTOs), CFOs are now expected to co-pilot and get more involved in digital transformation by playing a key role in identifying strategic growth opportunities through optimising the value of future data,” he observed.
- Only 13% of CFOs surveyed are actively involved with chief information officers (CIOs) to fuel digitalisation within the company.
- This is set to change as 93% of CFOs expect themselves to be actively involved in the next five years, either directly leading digitalisation projects (33%) or partnering with CIOs (60%).
- 53% of organisations utilise data analytics in their finance function and 83% of respondents aspire to strengthen the data analytics capabilities in the next five years, of which predictive analysis is key.
- 78% of the CFOs indicate support for strategy development and increasing commercial analyses as the key roles that finance leaders should focus on. These key enablers also fuel digital transformation.
- Finance leaders — a majority of 83% — seek to strengthen analytic capabilities, and leverage digital finance tools to improve planning and forecasting accuracy.
What should CFOs and the finance function do now?
To equip CFOs the ability to be resilient, ACCA said there are four key steps that would support finance leaders and the finance function to understand, identify and formulate change in an agile manner.
Co-pilot new business model. CFOs should become co-pilot to CEOs and even chief experience officers (CXOs) in business model transformation, being open and adaptable to new ways of working and formulate change in an agile manner.
Realign data analytics requirements. CFOs and the finance function will need to leverage on new digital tools to provide dynamic planning, adopting agile scenario and forecasting processes to add value to the business.
Strengthen data governance. Given that data will be critical for organisations going forward, it is crucial for organisations to have the right data governance and management strategy. CFOs need to lead the charge in developing and establishing a data governance framework for how common data are entered and standardised to provide credible, accurate analyses.
Pilot and agile implementation. Being able to prioritise the right project is key as data projects can be complex and may take a long time to complete. CFOs need to adopt agile approach to push for significant change in a new environment.
“It is imperative that CFOs must co-pilot with other functions to lead business model and cost structure transformation,” said Joseph Alfred, head of policy, ACCA Singapore. “We will see redefinition of business value in this era as CFOs take on new roles, learn and apply new innovation skills to support business to transform and adopt an agile approach to drive change.”