CorporateTreasurer

Plotting a path to a strategic finance future

By Content Lab | Jun 13, 2022

As C-suites grapple with new and emerging demands on all aspects of their business, the finance function is expected to play a more central role in decision making across the organisation. At a recent webinar, CFOs from Sembcorp Industries and Prudential Singapore, along with industry specialists at Accenture and Anaplan, shed light on how finance can be a true strategic partner.

From supply chain disruption and the acceleration of digitalisation, to economic and social challenges combined with geopolitical tension, businesses need to adapt and pivot quickly. To achieve this level of transformation, however, also involves a bold finance vision.

For chief financial officers (CFOs) and their teams, this requires business alignment and pragmatic steps to reimagine the role of finance to fit the intended strategy.

Recent research conducted by Accenture, for example, highlights the constantly evolving nature of the CFO’s role. It comes with ever-higher expectations from the board, the chief executive officer (CEO) and the broader C-suite.

In short, the findings – based on the views of over 1,300 senior finance executives across 15 industries and 14 geographies – show speed is becoming a differentiator for top CFOs. To enable this, they need to make data-driven decisions about their organisation’s digital transformation. In fact, 72% of CFOs who participated in the research have the final say on the technology direction of the enterprise.

Broadly, the research identified three key areas shaping the future role of finance leaders:

  • Economic guardianship – leading an efficient and effective finance function by using advanced technology, not only to process financial data but to unlock predictive forecasting. CFOs also need to empower finance professionals to build new skills and take on broader responsibilities.
     
  • Business value – expanding the capability of the finance function and driving collaboration for enterprise-wide partnering, such as by interacting more purposefully with colleagues across the C-suite, providing more insightful and sophisticated perspective and knowledge, and taking personal ownership for harmonising technology and data platforms.
     
  • Digital strategy – creating insights for new business models and realising value in a digital world, as well as championing digital transformation across the enterprise and steering the future direction.

To better understand how the finance function can fulfil these strategic goals, CorporateTreasurer and FinanceAsia, together with Anaplan and Accenture, brought together several market specialists at a recent webinar:

  • Eugene Cheng, Group CFO, Sembcorp Industries
  • Andreas Rosenthal, CFO, Prudential Singapore
  • Raghvendra Singh, Managing Director, CFO & Enterprise Value, APAC, Accenture
  • Bhavik Vashi, Area Vice President, Asia, Anaplan
  • Teoh Aii Lin, Director, CFO & Enterprise Value, Enterprise Performance & Analytics Lead, Southeast Asia, Accenture

According to a poll of the webinar audience of finance professionals, the biggest barrier to change within finance functions is mindset and culture (52%) – significantly more of a challenge than legacy technology and tech under-investment (29%), de-centralised data (16%) and a lack of reporting (3%).

Based on another audience poll, talent, at 40% of the votes, can have the biggest impact on enhancing a finance function – ahead of analytics (24%), data (21%) and platforms (15%).

Further, the audience said the majority of responsibility for driving the type of change that the Accenture research identifies as critical should lay with the CFO (44%) – compared with the CEO (27%), all staff (17%) and the board (12%).

Ultimately, found the Accenture research coupled with insights from the webinar, five elements make up a holistic finance strategy: talent, data, the role of finance, technology and processes.

Read more takeaways below and watch the on-demand version here


KEY INSIGHTS

An increasingly demanding role for CFOs

Andreas Rosenthal
“The expectations of customers are increasing, especially in relation to digital engagement. Business cycles are also getting shorter, requiring faster decision making. As business models evolve in line with these and other changes, the finance function needs to be a strategic partner to the business, to help it navigate commercial success in this new environment.”

Eugene Cheng
“Also in terms of capital allocation, the finance function is in the right position to fully understand the financial performance and wider market trends in the relevant business segments. This puts finance as the key decision-maker in deciding ‘where, when and how’ in terms of structuring investments and formulating strategies.


How to keep up with a fast-changing landscape for finance

Eugene Cheng
“As outright partners to the business, we should see ourselves as the CEO with a finance slant. We need to more effectively use technology to enhance access to analytics and data. At Sembcorp, we are driving greater standardisation of financial data as well as data reporting that relates financial performance to the business driver. I can then more quickly break that down to inform and support the business in making relevant decisions. To be able to drive collaboration across the entire organisation, only a CFO has the overview to use financial data and see areas where the business can benefit from certain synergies.”

Andreas Rosenthal
“It is important for CFOs to foster strong ties with the different business stakeholders, as well as be immersed in the wider market to understand market trends. We are also collaborating with the various business functions to ensure we are focused on the company’s long-term growth.”

Raghvendra Singh
“Transformations tend to be successful if they are run in a holistic way. The focus for every single initiative should remain on value, otherwise it will get challenged at some point internally. Collaboration needs to be driven across the C-suite with ‘change champions’ leading it.”


Enabling CFO’s to foster change

Bhavik Vashi
“As a technology provider that looks to enable the future of finance across industry sectors, we also see for more product-oriented companies a necessity to integrate traditional finance activities with operational planning and visibility in relation to the supply chain. CFOs are trying to make difficult decisions in terms of re-allocating capital and mitigating financial risk.”

Raghvendra Singh
“For most CFOs we researched, there was a sharp focus on value. The common need across companies today is the availability of information such as customer- and product-level profitability at their fingertips, so that they can identify where they need to invest more. The business therefore has been increasingly looked to the CFO to deliver this, and CFOs have gone from being viewed as ‘finance for finance purposes’, to becoming ‘finance for enterprise’. This requires CFOs to have enterprise-level data and collaboration with the C-suite, and to be the custodian for every dollar invested by the organisation. The simple question to answer is: ‘Where is the value?’”

Teoh Aii Lin
“A CFO cannot solve any of the challenges in isolation. It requires a holistic approach across talent, data, the role of finance, technology and processes.”


The importance of talent

Andreas Rosenthal
“While systems and data are often the main topics of discussion in relation to finance transformation, the people aspect is very important. This is not only about supporting teams through change, but also showing them the vision of what lies ahead. This includes giving everyone the opportunity to explore new roles and skills. At Prudential Singapore, we have encouraged learning opportunities for our teams, such as AI in Finance, as well as mobility across teams, both within finance as well as in other parts of the organisation.”

Bhavik Vashi
“Looking at the talent and change management aspects of the finance team is a key part of modernising the function. The technology requirements to support the transformation and shift up the value chain, along with the strategy around that, are often overlooked as critical success factors for the transformation.”


The finance function of the future

Raghvendra Singh
“In five years’ time, CFOs should be the CEO. This is possible if they deliver against the value agenda and go beyond being a custodian of just the bookkeeping processes. They need to elevate their role towards driving effectiveness and impact to the business, as an influential personality to foster change. The finance function should combine a data and analytics based, tech-powered skill-set. This would orientate it towards offering a strategic value-add.”

Eugene Cheng
“The finance function will play a front-running role in determining, assessing and setting business strategies, as well as piecing together the various capabilities within the organisation.”

Teoh Aii Lin
“Finance teams can also help companies with strategic objectives such as reaching the untapped potential of customers, expanding into a new geography or launching new products.”

 


Andreas Rosenthal
“In five years, the financial systems and processes should enable CFOs to resolve practical business problems based on the democratisation of data and enable instant decision making.”

Bhavik Vashi
“Vendors can help align the C-suite and the finance function to business transformation, where finance initiates the conversation, by providing a third-party perspective based on broader exposure across various industry sectors.”

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