CFO roles reassessed
Chief financial officers need to transform the function to take on more frontline roles, says Deloitte study
An overwhelming majority of chief financial officers (CFOs) in the region recognise the need to transform key areas of their finance functions to navigate the complexities of the new normal, but many have yet to begin their transformation journey, according to new study by Deloitte Southeast Asia.
Areas requiring increasing attention include data management and analytics, risk monitoring and compliance, and business finance, said the survey entitled “Southeast Asia CFO Agenda 2021: Reimagining the Future of Finance”.
The conclusions were based on responses from 105 Southeast Asia-based CFOs and finance leaders across a wide range of industries and finance team sizes, conducted between the second and third quarters of 2021.
The findings show that a large majority of CFOs recognise the need to transform in key areas as the role of finance pivots towards the delivery of financial insights. However, more than a quarter have not yet begun transformation in these areas despite acknowledging the importance of business finance (38%), risk monitoring and compliance (46%) and data analytics and management (44%).
“For most Southeast Asia CFOs, their focus was initially to ensure operational and business continuity. This year, CFOs are now focusing on long-term priorities to become more agile to support evolving business needs,” said Timothy Ho, Deloitte Southeast Asia CFO programme leader.
“In particular, as the pandemic continues to demand fundamental shifts to their businesses, it is imperative for CFOs and their finance function to pivot from operational finance to financial insights, and turn their attention to developing new finance roles and the accompanying skillsets required for the future. Specifically, they will need to take on more frontline roles and become the ultimate owner of data within the organisation.”
One thing is clear from the survey respondents — remote working is here to stay, with almost three-quarters (73%) indicating that their organisations will continue remote working, and potentially use remote work as a means to supplement talent to the finance team.
“A key driver for remote working is a skills shortage,” said Mr Ho. “Even as CFOs in the region adapt to a remote workforce, drawing from other geographies to plug the skills gap, they will still need to consider how their finance teams can develop or acquire more diverse skillsets — and fundamentally reimagine the future role of finance in their organisation.”
NEXT-GENERATION FINANCE
An analysis by Deloitte of the survey findings suggests there are three priorities on CFOs’ to-do list in order for their teams to deliver next-generation finance that is defined by remote work and their increasingly frontline role.
1. Craft the finance transformation vision:
CFOs who wish to accelerate their readiness to operate in the new normal will need to understand the mix of human skills and technology required to meet changing expectations, update roles and job descriptions and, importantly, ensure that their talent is ready.
This requires an ambitious but realistic finance transformation vision that articulates which technology investments to prioritise, defines the talent that will thrive, and decides how best to upskill them.
2. Define future roles: Future finance roles will likely fall into three main categories — Storytellers, Interpreters and Machine Managers. These roles are likely to differ not only in terms of the skills required, but also in terms of humanmachine mix.
Even if these roles depend heavily on machines, they are unlikely to be fully automated. This means that finance talent will be required to operate in new and different ways — with creativity, intuition and judgement remaining high on the human value chain.
3. Decide whether to build, borrow or buy: Often, a CFO’s first instinct is to upskill a team through training and development in order to acquire new capabilities and build a futureready workforce. While upskilling should be part of any future workforce plan, it may not always be sufficient to meet all future talent needs.
But this also does not mean that CFOs need to go on a hiring spree — there is a good chance that these capabilities already exist within the organisation, if not within the finance team. CFOs should therefore look within their organisations to see if they can borrow or share employees with transferable skillsets from other functions.
“It is becoming increasingly clear that doing one or two things exceptionally well and working in isolation are unlikely to cut it,” said Mr Ho. “In its future role, finance will be about managing across functions, building the right combination of talent and capabilities, as well as owning and operating a strong organisationwide data foundation.
“Our advice to CFOs is for them to focus less on the pursuit of perfection, and more on continually improving the value that finance delivers to the organisation.
“As an example, as more businesses place emphasis on sustainability, and the requirements continue to evolve, how can CFOs play a more active role to drive the measurement, reporting and management of these initiatives? After all, the future is not set in stone, and it is up to the CFOs and their finance teams to take action, and reshape and reimagine in order to sail beyond the horizon.”
Our advice to CFOs is for them to focus less on the pursuit of perfection, and more on continually improving the value that finance delivers to the organisation. TIMOTHY HO CFO programme leader, Deloitte Southeast Asia