Changes in the finance function have given rise to a widening skill gap. Lee Thong Tan (pictured), CFO Practice Lead for Asia at Workday sheds light on those changes and how finance can narrow the skill gap.
FutureCFO: How is the finance function changing amid the pandemic and the way forward?
Lee Thong Tan (LT): Heightened uncertainty and disruptions brought by the pandemic have entirely transformed organisations and the way they conduct business. The finance function, in particular, has undergone tremendous changes as organisations evolve and streamline processes to fit into a hyper-digital and agile way of working.
Today, organisations need to be able to respond nimbly when faced with new challenges and uncertainty in a rapidly changing business landscape and regulatory environment. For finance professionals, this means doing away with old ways of working, identifying new opportunities and re-evaluating priorities to thrive in the next normal.
At the start of this year, Workday launched its Finance Disrupted: Navigating the Next Normal report, which surveyed senior finance and IT professionals across the Asia Pacific region.
The findings revealed that priorities for finance have shifted amidst the pandemic. The top priority in the finance function is now finance digital transformation, according to 63% of respondents, followed by cash and liquidity management (57%) and enabling the remote delivery of financial services (56%).
Beyond formal classroom training, there can be more emphasis on facilitating collaborative projects among employees and job rotations to enable employees to gain exposure to other parts of the business.
These findings, which reflect the change in organisational zeitgeist, underscore the importance of integrating technology into the finance function and role.
In today’s digitally accelerated world, finance leaders must see the value that new technology tools and disruptive innovations can bring in paving the way forward. In fact, more than two-thirds of respondents in the same survey believed that artificial intelligence and machine learning will have an impact on the finance function in the future.
In the past, finance was typically considered a numbers-only role, and one which focused primarily on reporting tasks like budgeting, auditing and forecasting.
This is no longer the case today, with finance professionals having to balance reporting responsibilities with the rising demand for actionable insights and data-driven analysis that inform business planning and strategy. The pandemic has further accelerated this pace of transformation.
What this means is that more so than ever, the finance function has the opportunity to evolve from being a purely stewardship role to becoming a more strategic, value-adding function that plays a key role in the decision-making processes and overall strategic growth of the organization.
FutureCFO: Can you describe the skill gap that exists within the finance function?
LT: With the rapid digitalisation that the finance function has undergone in the last year, it is not surprising that having a traditional finance background is no longer sufficient in the next normal.
The mere balancing of books is no longer the primary function of finance. Finance professionals today need to have a broader and more diverse range of skillsets that go beyond a business or accounting degree, especially with CEOs increasingly look to them to help shape business direction and strategy.
One increasingly sought-after field in the finance function these days is data science.
Having these data analytical skills will allow one to mine actionable data and insights that can help the organization improve processes, analyse competitors and identify new revenue streams.
By harnessing data more quickly and with greater accuracy, finance professionals will play a bigger role in driving business decisions to help their companies to not only survive, but thrive.
Looking ahead, technology involving the use of advanced data analytics, predictive models and cloud management systems will become increasingly prominent in finance.
With the advent of these models, tedious and manual processes are largely eradicated, freeing up more time for more meaningful, value-adding tasks. Finance professionals will need to learn how to operate these systems and look at how they can leverage technology to become more proficient in their roles.
In the next normal, purely technical, or ‘hard’ skills alone will no longer be sufficient.
Finance professionals increasingly also need to possess interpersonal communication skills and demonstrate the ability to think analytically in harnessing data, bringing these aspects together to tell a “business story” and provide context and reasons behind decisions.
By doing so, they will be well placed to be a true strategic business partner who can empower their companies to navigate and embrace future potential disruptions seamlessly.
Technology that involves the use of advanced data analytics, predictive models and cloud management systems will become increasingly prominent in finance.
FutureCFO: What can CFOs and employees in the finance function do to narrow the skill gap?
LT: Faced with a growing skills and technology acceleration gap, CFOs and finance professionals need to acknowledge the need for greater collaboration with the office of the CIO.
In today’s digital- and cloud- first world, it is crucial that the CFO and CIO maintain robust lines of communication and understanding with regards to operating the organisation’s financial management systems. Both sides need to understand each other’s capabilities and needs, and this entails the sharing of data best practices.
This will enable the organization as a whole to streamline processes and operate at a higher metabolic rate.
At the same time, CFOs should also work with their counterparts in human resources to lead the push for organisational-wide initiatives that aim to address skills gaps and to ensure that finance teams continue to add value and be aligned with the business as the pace of digital acceleration continues.
This starts from understanding the skills that the organization has and making data-driven decisions about closing skills gaps and enabling talent development.
By doing so, CFOs will be better positioned to provide the right retraining and upskilling programmes for employees, or work together with industry associations to tackle the issue.
Beyond formal classroom training, there can be more emphasis on facilitating collaborative projects among employees and job rotations to enable employees to gain exposure and better understanding to other parts of the business.
This will help finance professionals to develop the cross-functional acumen and skills that will be useful in providing impactful and strategic insights to the business.