CFOs’ roles chang­ing in new tech, eco­nomic en­vi­ron­ment

Financial Chronicle - - MISCELLANY - MINI TE­JASWI

Com­pa­nies call the cus­to­di­ans of their cash chief fi­nan­cial of­fi­cers (CFOs). But CFOs’ roles are un­der­go­ing trans­for­ma­tion. Such are the changes that ex­perts be­lieve that by 2019 In­dia will have a new breed of CFOs.

The tech­nol­ogy too is play­ing its role in the trans­for­ma­tion. The most of CFO’s tra­di­tional func­tions and re­spon­si­bil­i­ties are now be­ing taken over by ro­bots and au­to­mated sys­tems, which are sup­ported by ar­ti­fi­cial in­tel­li­gence (AI). Also, a ma­jor chunk of CEO func­tions and parts of CTO re­spon­si­bil­i­ties are now be­ing passed on to CFOs, con­curred ex­perts at a CFO Con­clave here re­cently.

The role of CFOs has evolved from mere num­ber guys to cat­a­lysts and strate­gists in their or­gan­i­sa­tions. Today, they are in­creas­ingly be­ing made re­spon­si­ble for busi­ness ex­pan­sion, rev­enue push, em­ploy­ment and most im­por­tantly, cre­ation of wealth, said Porus Doc­tor, CFO pro­gramme leader at Deloitte In­dia.

Doc­tor said, “CFOs have to come out of their com­fort zones and be men­tors for their or­gan­i­sa­tions. A CFO should play key role in shap­ing the fu­ture of the com­pany and mak­ing the com­pany fu­ture-ready.

“CEOs and CTOs are pass­ing some of the crit­i­cal re­spon­si­bil­i­ties and roles to CFOs today. They need to un­der­stand the dig­i­tal revo­lu­tion and its po­ten­tial ram­i­fi­ca­tions to an­tic­i­pate a trend ac­cu­rately and man­age ef­fec­tively. It is im­por­tant for them to be nim­ble-footed.”' He said for a CFO, it’s im­por­tant to iden­tify the skill sets re­quired for the fu­ture and he should have a fi­nance tal­ent strat­egy that sup­ports the broader fi­nance and cor­po­rate strate­gies of the com­pany.

Ac­cord­ing to him, CFOs should play a vi­tal role in en­sur­ing the pres­ence of ro­bust tal­ent base in the or­ga­ni­za­tion, ready to evolve with the chang­ing needs. “A ma­jor chunk of tra­di­tional CFO func­tions can be au­to­mated while he would re­quire some tal­ent in his depart­ment to ex­e­cute the rest of the job, so that he is free to get into high-value en­gage­ments for his com­pany,’’ added Doc­tor.

Mod­ern CFOs are ex­pected to know stuff around cross­boarder deals, M&As, mar­ket ex­pan­sions, in­dus­tryspe­cific reg­u­la­tions, chang­ing tax struc­tures and all kinds statu­tory re­quire­ments. To meet these emerg­ing chal­lenges, the CFO com­mu­nity in par­tic­u­lar and fi­nance pro­fes­sion­als in gen­eral need to un­dergo a com­pre­hen­sive re-skilling, said Mad­husu­dan Rao, chief con­vener, CII Kar­nataka panel on eco­nomic af­fairs, tax­a­tion and fi­nance, also CFO at Inger­soll Rand.

Cog­ni­tive au­to­ma­tion, sup­ported by ro­bot­ics and ar­ti­fi­cial in­tel­li­gence, is in­creas­ingly get­ting into the fi­nance de­part­ments of global en­ter­prises. En­tire func­tions around the man­age­ment in­for­ma­tion sys­tems (MIS) and cre­ation of re­ports are al­ready be­ing han­dled by ro­bots in cer­tain com­pa­nies.

For in­stance, In­fosys gen­er­ates some 30,000 in­voices a month and it used to take months to com­plete the work. “Now a robot does it for us, in just six hours,’’ said Jayesh Sanghra­jka, deputy CFO at In­fosys. Most speak­ers at the CII-hosted CFO Con­clave felt that GST was not a tax is­sue, but a se­ri­ous tech­nol­ogy and com­pli­ance is­sue that com­pa­nies are still strug­gling to get it fixed. How­ever, Naren­dar Pani, econ­o­mist at In­dian In­sti­tute of Ad­vanced Stud­ies, said, “CFOs can­not fo­cus en­tirely on strat­egy at a time when we have de­mon­eti­sa­tion and GST. There is pres­sure on the CFO to look at the im­me­di­ate. Today there is so much dis­cus­sion on de­mon­eti­sa­tion and GST that we have shifted our fo­cus from the struc­tural changes that have taken place in the In­dian econ­omy.’’

With two big­gest backto-back re­forms, de­mon­eti­sa­tion and GST, the In­dian econ­omy is wit­ness­ing un­rest and de­mand­ing high level of pre­pared­ness by or­gan­i­sa­tions and gov­ern­ment agen­cies to man­age changes in the IT sys­tems and the tax­a­tion process.

CFOs should play a vi­tal role in en­sur­ing the pres­ence of ro­bust tal­ent base

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