Redefining role of CFO beyond ties of coronavirus

Thursday, January 14th, 2021 00:00 |
An elderly man undergoes a COVID-19 nasal swab test. Photo/Courtesy

Tarik Bouarfa  

The setbacks experienced as a result of Covid-19 have been unlike any seen before.

The impact on the finances of industries and organisations across the globe has been unprecedented – with many not surviving to this point.

Globally, CFOs and finance teams have been hard at work to lead their organisations through the immediate crisis, ensuring safety and protection of employees, suppliers and key stakeholders.

They have also been collaborating across functions, assessing liquidity and conserving cash and reaching out early and often to investors to reset performance expectations.

For those who have managed to transcend global lockdowns into recovery phase, a new reality has very quickly come to the fore: one that requires a new, agile way of thinking.

Drawing lessons from these unsettled months, the CFO must now permanently build speed and flexibility into functions that encompass forecasting, planning and resource-allocation processes and incorporate new tools and rapid decision-making protocols into the finance team’s daily work.

Experience has shown that whether the challenge is rooted in growing revenue or allocating resources, technology is the shortest path to better, more confident action.

But to bring technology to life, we must invest in our people. Taking on the notion of Tech Intensity, an organisation’s rate of technology adoption along with its ability to build its own digital capacity, we encourage CFOs to take risks, learn, educate and, as a result, feel comfortable enough to embrace change beyond Covid-19.

As organisations start to discuss the return to the physical office space, remote working and hybrid working environments will remain at the centre of operations.

Employees across all functions will continue to work remotely using modern workplace collaboration tools and organisations will therefore need to invest significantly in workforce engagement and training in new skills.

CFOs will also need to consider making a significant shift from fixed capital costs to variable costs by leveraging “as a service” models such as Microsoft’s Azure SaaS, PaaS and IaaS, employing technology driven methodologies to foster cost transparency.

No one could have predicted a global pandemic and the ramifications thereof 12 months ago and while forecasting and scenario planning serve exactly that purpose – taking into account market fluctuations, disasters and the like, it naturally did not factor in the kind of impact the pandemic has seen.

Moving into an era of Modern finance, CFOs must embrace advanced analytics to move from backward-looking analysis to future-looking predictions and recommendations.

Machine learning is a critical tool for predicting outcomes and managing risk and solutions such as the Cortana Intelligence suite allows organisations to stay ahead by turning gathered data into actionable insights. 

CFOs will continue to face an ever-growing risk landscape because of many factors, including geopolitical turmoil, regulatory reforms, market instability, and cyber threats.

However, moving forward into the modern finance era will require taking an ever-larger role in risk management that goes beyond traditional financial risk and compliance.

The virtualisation of the workforce and remote working could increase vulnerability to cyber risks, including data theft, ransomware, and other attacks.

Staff layoff and cost reductions could also increase vulnerability to failures of internal controls, due to stretched, disengaged, or ill staff.

Lastly, organisations may have to revisit the internal audit process and incorporate more data analytic tools in assessing the risk landscape.

Leveraging and effectively harnessing the power of the cloud, CFOs can create early warning systems and tools that will enable them to proactively manage risk.

For example, using solutions in the Azure stack, CFO’s can build a risk analytics platform to provide comprehensive coverage of all sales transactions, with predictive machine learning based capabilities.

As a result, driving a systematic review process and focusing on high-risk transactions. — The  writer is Chief Finance Officer for Middle East Africa Emerging Markets at Microsoft

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