The Finance department has undergone significant scope changes as the chief financial officers take on new roles for their evolving position.
This year, finance leaders were seen navigating new areas—even those fields they were initially not thought of to have been involved, spanning environmental, social, and governance concerns, as well as digital transformation.
CFOs and the Finance team rode on the waves of these shifts in the market, putting talent management—re-skilling and up-skilling—on the priorities list to help finance professionals through transformation and change.
As the year draws to its close and organisations are veering to wrap up the year on a high note, it is important that they understand fully how they have traversed the road as this will be the blueprint for gearing up for 2025.
For Shivam Kumar, finance director for Southeast Asia & Taiwan at pure-play consumer healthcare company Haleon, the future approach to finance leadership boils down to focusing on the fundamentals: consistent, competitive, sustainable and profitable growth for revenue, profit, and cash with equal emphasis on growth of the Finance team.
2024’s snapshot
In the year that is about to end, being a finance leader in the consumer healthcare industry in Southeast Asia undeniably saw several challenges in the last couple of years.
Shivam says these challenges included the management of supply chain disruption and demand volatility following the disruption caused by the COVID-19 pandemic. The healthcare sector is now in the normalisation phase post-pandemic.
Talent retention and the continuous development for the people in the Finance function have continued to be the key focus items for all Finance leaders, according to Shivam.
In weathering these challenges, Shivam notes the importance of having clarity of vision and ensuring resource allocations are clearly aligned with the vision. He also highlights the importance of building agility in supply chain management and, external focus and benchmarking in forecasting, whilst continuing to be data and insight-led.
The Haleon finance director also believes that a breadth of technical and human skills is necessary for finance function and finance leaders to ensure they can meaningfully contribute to the business as well as address the challenges that come their way.
Onward to 2025
Shivam thinks that aside from acceleration in digital transformation— which is, now, a given for the Finance function — finance leaders should double down on building capacity and capability within the organisation to enable quality and agility in their responses to geo-political, regulatory, and economic cycle shocks.
He firmly believes that quality of talent can be a competitive advantage and investing time and resources behind that has a positive return. “It’s impossible to predict everything, but building an organisation which can work through distinct scenarios and craft respective responses is the optimal approach,” Shivam says.
He believes that clear, succinct and consistent communication is critical within organisations to ensure focus and drive cross-functional collaboration.
Challenges into opportunities
As a finance leader, Shivam sees each challenge as an opportunity to reflect. “For example, COVID highlighted the importance of agile supply chain, the importance of scenario analysis and strong cash flow management,” he says. “It’s important to focus on the lessons and take deliberate steps to build that capability within the organisations.”
Shivam believes that winners are differentiated by their ‘growth mindset’ and their ability to approach each challenge with the mindset to learn, adapt and grow.
Innovation
At this point, it is not surprising anymore how technological advancements and innovation take over the business world.
Finance leaders assumed new roles within their respective organisations and succeeded amid changes brought about by technology—proving that digital transformation, including artificial intelligence, machine learning, automation etc. are not to be viewed as mere challenges but stepping stones to drive value.
In a recent report by Wolters Kluwer, they found that the integration of AI into the Finance function is rapidly shifting from uncertainty to optimism, as a significant majority of finance professionals are now ready to embrace AI technologies, and are planning investments in the next five years.
This proves that fostering innovation such as this one in technology can support the Finance department’s broader business objectives, as a significant number of finance professionals look into investing in AI within five years, and aim to make these investments in the next two years.
In a separate study by Gartner, they found that 90% of finance functions will deploy at least one AI-enabled technology solution by 2026, but less than 10% of functions will see headcount reductions, showing that CFOs are already making changes to fully harness AI in finance.
According to Gartner, CFOs who combine the strengths of people and machines increase their chances of AI success through a satisfied and engaged workforce.
Shivam believes that moving forward to 2025, it is imperative that the Finance function embraces technological advancements and builds a culture of calculated risk-taking where failures are recognised as learning opportunities.
The year ahead
Shivam thinks that the fundamentals of focusing on consistent, competitive, sustainable and profitable growth will remain unchanged, as will the continued necessity to put equal emphasis on talent growth.
What will be relatively new, in Shivam’s view, will be the pace of technology adoption within Finance which will evolve from process streamlining to predictive forecasting and scenario modelling, ultimately freeing up capacity within Finance teams to focus on value creation.
