21st century has brought about a paradigm shift in the way corporate entities had been operating and these rapidly evolving changes require constant focus on augmenting skills for each role within the organization as a whole, especially for a Chief Financial Officers (CFO) to remain relevant in the emerging corporate cultures.
Technology is the biggest factor driving this transformation and being tech-savvy is now becoming one of the major pre-requisites for companies when making recruitments against all senior and middle management positions. All major and successful companies are increasingly realizing that data is their most precious asset and knowledge of data analytics, big data, machine learning, algorithms and artificial intelligence, is gradually becoming a core competency to fill a role in these progressive organizations.
According to the American Institute of Certified Public Accountants (AICPA); “The globalization of the economy, the explosion of technology, the complexity of business transactions and other forces have thrust the financial system into a new age. As the pace of economic change accelerates, so does the need for reliable and relevant information.”
Therefore, these developments are actually engulfing the overall financial systems as a whole on the global scale. As such, the key role of a CFO has not just diversified but has also become extremely challenging and complex. Moreover, these apply to both the existing CFOs as well as new CFO candidates across the globe. Any professional who misses this opportunity and fails to embrace these massive changes, risk becoming redundant entities.
All global and local accounting forums and professional bodies along with audit firms specially the Big-4 are gearing towards these emerging priorities and quickly adapting to the evolution of technology.
While technology is evolving very rapidly, it is also providing the potential for CFOs to reconfigure financial processes and drive business insight through ‘big data’ and analytics, as the world embraces digital transformations across the board.
The COVID-19 pandemic has made technology led transformation even more critical for the businesses to survive these challenging times as more entities incorporate technology to optimize costs and efficiencies while simultaneously managing the remote working environment imperative to build sustainable operations in the new social distancing norms. The financial standing and resource allocation that occur within a company is shifting in light of altered realities brought about by the COVID-19 pandemic with more focus on creating diverse ecosystems that can handle the challenges posed by a digitally enabled economy.
So, what are the traits and skills that a CFO requires in this digital age in order to stay relevant? The answer revolves around accepting these advancements in technology and investing in a skill-set adept for this role. Robots and tech-based solutions are expected to take over basic book-keeping and accounting roles in the near future in any case. Therefore, the harsh reality facing the finance profession including the CFO at the top is that those who are unable to leverage data sciences will eventually find limited scope of occupational opportunities in this evolving corporate world.
Therefore, it is essential to accept the use of advanced algorithms and machine learning protocols as cognitive abilities of the computing technologies continue to rise exponentially. For the ‘new-age’ CFO, it is crucial to come to terms with streamlining the process of bookkeeping by leveraging sophisticated tools that make complex tasks much easier while also gradually enhancing the usage of data led decision making to get maximum benefits of these emerging technologies and ride through complex financial and operational challenges.
The ‘new-age’ CEO and his role in creating a sustainable enterprise that is in tune with the evolving market landscapes are also crucial. A CEO cannot accomplish this unless he has the backing of a like-minded CFO geared towards the same goal. CFOs lagging behind in undocumented and cash-based eras need to evolve and become increasingly comfortable in a cash-less digital eco-system assisting the CEO in managing the aforementioned challenges.
However, without doubting the importance of technology, it is essential to understand that technology has its limitations as well and that’s where the true skills of a great CFO will shine. Computer programmes and other tools are accurate at making calculations, analyses and deriving results based on existing data sets but they are not very effective, at least immediately when presented with new situations or challenges. That is where human intervention or cognitive abilities come into play for inference required at this point to derive appropriate solutions. However, CFOs usually become overwhelmed with data and are unable to decipher these key inferences as they are not familiarizing themselves with the latest data analytical tools. So a key lesson would be to not get bogged down by the technological changes, instead CFOs should use technology to their benefit to derive value in the organization which they serve.
There is no doubt about the fact that ”change is going to be the only constant” and the job of the CFO of the future is going to be even more demanding than it is today. Therefore, CFOs in all stages of their careers have to become tech-savvy as a priority for value creation today and ultimately longevity within the organizations in the long run.
(The writer is Chief Financial Officer, Telenor Microfinance Bank/Easypaisa)
Copyright Business Recorder, 2020
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