Article credit: Sage 

“I always tried to turn every disaster into an opportunity.” – J.D Rockefeller.

Over the last few months, accounting professionals have had to deal with equal measures of disaster and opportunity in the midst of the Coronavirus outbreak. Accountants have been a solid support to businesses during this time, providing advice and helping wherever they can with claims for government assistance.

This year’s Practice of Now report – conducted late last year in collaboration with Savanta – has shown similar themes. Data from more than 3,000 accounting professionals globally has laid bare a profession ripe for positive change, and perfectly placed for the challenges that 2020 presents.

What is disruption?

Disruption happens when clients drive change. Not a single profession is immune to disruption. If people need transport, their thoughts first turn to Uber or Lyft, rather than calling a taxi. Holidaymakers needing accommodation turn to AirBnB, much like they would to a travel agent or hotel booking website. And then there’s Amazon: people’s go-to for shopping online, often before they’ll go to their local malls.

While technology facilitates disruption, it is rarely the cause of it.

The Practice of Now survey showed disruption when 90% of South African respondents stated that clients expected improved service levels and more flexibility – but with no fee increases. It was further evident when 92% of respondents agreed that clients demand a broader service offering, including advising on relevant finance and accounting technologies.

Technology does, however, play a role: 91% agree that client expectations have widened to encompass advice on finance and accounting technologies, and 89% of accountants agree that the culture of digitalisation and the influx of new technologies has meant that they have had to invest more, quickly, to keep up with the market.

Across all these measures, South African respondents rated each at least 10% higher than other regions, like the UK.

Staying ahead of the pack

Preparing for disruption means listening to customers and using the following themes to inform service offerings:

1. Always on, everywhere

For many, social distancing has caused a massive change in working conditions, with many people now working from home. But how many accounting professionals are taking a deep look into what is needed to work from anywhere, at any time? Can you help clients to transfer documents between parties, both internally and externally? Can you help their business users to access their accounts and benefit from regular reporting and dashboards? How can you help facilitate this goal?

The requirements being highlighted now are here to stay, and clients will increasingly turn to their accountants for assistance.

This year’s Practice of Now survey revealed that, thanks to technology, 65% of accountants provide their clients with faster service, and 57% believe that it has increased client service and satisfaction. Technology is critical in accounting today and practices that don’t realise that will soon be left behind.

Again, these figures were 14% and 11% higher, respectively, than in the UK.

2. Compliance

Throughout the Coronavirus pandemic, accountants globally have shown their value by explaining and providing important data and helping clients to apply for emergency government aid, which has proven a lifeline for many businesses.

This was going to happen at some stage. Even before the events of 2020, governments were taking on a more regulatory approach to business. Accountants have found themselves needing to be increasingly on top of legislation – and not just tax legislation, but also employment laws and data protection regulations. For clients, boundaries between these varying areas of knowledge don’t exist, and they expect the people who manage their financial data to know how to keep it safe and ensure it’s accessible.

Our survey showed that there is a definite requirement for compliance knowledge, in addition to basic compliance work. Nearly 83% of respondents said that regulations from government, industry and international bodies were driving changes to work practices.

Is there somewhere for your practice to specialise in order to offer this degree of insight? Would training help? Or hiring a person or team that specialises in these matters? Are you sure that you can provide instant support if a client calls or mails? Is this perhaps a route to a new kind of client business to support traditional services?

3. Automate!

 A customer who requires a wide range of service offerings that are best served by modern technology is most likely to trust you with the total management of their business – if you have built a diverse and digitised workforce and have a large service menu to match.

There is evidence that accountants are starting to model themselves on this image, and tools like automation and artificial intelligence (AI) are no longer uncommon. In fact, only 3% of accountants surveyed said that automation wouldn’t be of any help to their firm (compared to 6% in the UK), while 49% stated that they intended to automate time-consuming and repetitive tasks like data entry and number-crunching, as well as invoicing, workflows, and accounts payable processes.

Where do we find automation in a typical practice or business? Payroll is a good example. Online timesheets automate the capture of employee information, while payslips and other employee documentation can also be automated. On a simpler level, manual data entry is automated with help from a scanner and this can further be used to automate the creation of quarterly and annual direct taxes and accounts.

The tools for implementing automation are likely already in the software you and your clients use. Or they could be available as add-ons. Be sure to roll out automation in your practice first so that your staff know how to use it, and you can easily offer it as a new service to your clients.

Making a plan

To implement the above, you will need an action plan. Creating a plan is elementary. Ensure ownership is assigned so that the project can be managed and there is someone to rely on for an overview when required. Ensure any plans are well understood by all, and that they stay fluid to respond to any changes, regardless of what happens with the pandemic.

Assess your clients to see who would be most amenable to the changes above – there are usually two camps: traditional and progressive. Consider how you would sell the changes to either of the camps, but perhaps start with the progressives, as they will tolerate room to learn.

The Coronavirus pandemic has thrown a lot of additional work to accounting professionals. While a shock, it’s required if you want to become a practice fit for the demands and challenges of the 21^st century.

Article credit: Sage 

CFO’s face new complexities due to the COVID-19 pandemic. This includes managing a remote workforce as well as expanding security and compliance mandate.

In fact, we’re witnessing the third major evolution in the role of senior financial decision-makers.

The evolution of CFO’s

The first “edition” of the CFO focused mainly on keeping the company books up to date and reconciling profit and loss. Financial reporting was about showing what happened yesterday, rather than forecasting potential.

Then came CFO 2.0, the senior financial decision-makers who analyse data in the present using automated finance processes, financial management technology and sophisticated data sets. Today, most companies exist in a state of CFO 2.0 but, living in the present, they can at least see the road ahead of them.

Enter CFO 3.0, a new era where the amalgamation of robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML) has created a new breed of trailblazing senior financial decision-makers who use data and emerging technology to create a vision for the future and to break through finance.

CFO’s 3.0: Beyond finance

To fully understand this shift from CFO 1.0 to CFO 3.0, we commissioned a study, CFO 3.0 – Digital transformation beyond financial management, that helped us to identify the opportunities and challenges facing senior financial decision-makers. We spoke to over 300 South Africa-based CFOs to gain insight into what their future job description might look like and get a feel for the impact that technology is having on their everyday tasks.

Our research reveals a radical new remit for senior financial decision-makers as drivers of strategic change and visionaries of the future. Supported by advanced technologies, they’re confidently leading the digital transformation agenda within their organisations.

In fact, 87% of CFOs play a role in digital transformation, with 15% being fully responsible for their organisation’s digital agenda.

For Arthur Goldstuck, CEO of World Wide Worx, a leading independent technology market research organisation that conducted the research on Sage’s behalf, this shift in the CFO’s role emphasises the extent to which budgetary approval is a key element of digital strategy and the fact that the role of the finance function has moved to the core of the business strategy.

Speaking during the official announcement of the research findings, Goldstuck said: “What the Sage CFO 3.0 research shows is that digital transformation is not a tech issue per se. It’s, in fact, a business process issue, and this is where the CFO is becoming integrally involved.”

“One of the questions we asked was who has responsibility for digital transformation in the organisation? Had we asked that question five years ago, the answer would have been the CTO or CIO. But that role has in fact shifted to the CEO who depends heavily on the support and partnership of both the CIO and CFO to effectively achieve digital transformation.”

Remote working tops challenge pile

Beyond the balance sheet and digital transformation, CFOs also play a key role in managing a remote workforce, with 27% taking on this role since lockdown began.

A live poll, conducted during the webinar, supported these findings. Of those who participated in the survey, 49% said managing, leading, and/or working within a remote team had been the biggest disruptor in the finance department this year.

“This aligns closely with what we found in the CFO 3.0 research. In fact, it suggests the trends we uncovered have actually accelerated since we conducted the research. If we had asked the same question in January, the single biggest shift in the role of the CFO would have been addressing the demands of digital transformation and changing stakeholder needs. But now, managing remote teams has risen to the top for everyone.”

This, says Goldstuck, is the most fundamental change in the CFO job description in the past decade, overtaking business strategy, which, until recently, was considered the most significant shift.

Shifting priorities for CFO’s

The move to remote working also shifted CFO priorities. It’s no longer only about managing new data, technologies, and stakeholder expectations. They must also maximise their technology investments by enabling their teams to work remotely while retaining accountability, transparency, and productivity.

This has brought with it a host of additional challenges around cybersecurity, data protection, and compliance. However, with nine out of 10 businesses having adopted emerging technologies in some form, CFOs have risen to the challenge.

In not being bogged down by numbers, budgets, data integration, and reporting, CFOs can turn their focus to changing stakeholder needs and modernising business processes.

Our research found that, in the past two years, CFOs have taken on new job responsibilities, including:

• Driving business strategy and objectives (21%),
• Managing government affairs and relations (14%), and
• Digital transformation-related activities (14%).

What’s more, CFOs have shown remarkable adaptability, with only 12% saying they struggle to adapt to these new roles.

The emergence of a more versatile senior financial role

One thing was clear from the research: A more versatile senior financial role is emerging: one that merges skills like accounting, analytics, business management, and strategic thinking.

In handing over the number-crunching to automation tools, South African CFOs are gifted with the time and opportunity for creative and strategic thinking. There’s more room for critical analysis and innovation to augment business strategy.

Our research also suggested there’s still a massive financial automation shift on the horizon, with only a little over half of businesses adopting process automation. But with 64% of South African CFOs spending more time analysing data than they do gathering and processing it (compared to 50% of CFOs in the UK), they’re on the right track.

What’s more, we expect predictive-based technologies to change the way CFOs operate at the board level. Two-thirds of CFOs expect emerging technology to audit results continuously and to automate period-end reporting and corporate audits, reducing time to close in the process – and freeing up even more of the CFO’s time to focus on digital strategy.

“I expect the evolution of the CFO role to continue, as they play an ever more central role in being part of the core team that must manage risk in uncertain times. The extent to which the CFO is confident that data and technology will support them in unlocking opportunities is what makes me excited about the changing role of the CFO.”

Looking ahead

Technology is taking finance in a new direction and our research shows that senior financial decision-makers are going along for the ride – and enjoying it.

CFOs are visionary, and they’re driving change through the adoption of technology. Those that have already invested in automation solutions cite efficiency, streamlined processes, reduced human error, risk mitigation, and competitive advantage as the main business drivers.

As the gatekeepers of data, fraud, cybersecurity, and data privacy, CFOs are increasingly looking to emerging technology to decrease risk, enable real-time decision-making, and help them to build a finance function that can withstand future challenges.

Article credit: Sage 

The world of business is changing at a rapid pace. And for the finance department, that sentiment couldn’t be clearer.

As we move to a digitised world, financial decision-makers in South African businesses are leveraging innovative technologies like AI and automation to enhance their role and increase productivity.

However, the next step is to become a visionary within their businesses.

But what does that mean for you as a CFO and how can you make that a reality for your role and your company?

CFO 3.0: Digital transformation beyond financial management is a new guide that looks at the evolution of the chief financial officer.

It will show you how technology such as artificial intelligence and automation can help you take your finance team and your role to the next level.

CFO 3.0: Digital transformation beyond financial management covers the following topics:

• Driving digitalisation – from historian to visionary
• Managing uncertainty – the evolution of finance
• Riding the technology wave

An excerpt from CFO 3.0: Digital transformation beyond financial management

The intersection between technology and human interaction has created an opportunity for leaders to re-imagine business.

Fundamentally, the nature of business is evolving in all manner of ways: end-users are changing, employees are changing, and the availability of tools is changing.

All impact the way work happens and how we construct, organise and operate companies. Finance heads have, in the past, used their gut to interpret the figures and understand what it means for their business.

They had no more to go on other than their intuition and experience. But data has changed that and altered the dynamics of decision making. If we look to startups, the impact of technology is clear.

Modern breakout businesses use artificial intelligence (AI) and automation to enhance connections with their customers and employees. Their ‘new age’ and tech-first approach looks very different from past business models.

They have successfully fused human needs with technology, rethinking the way we conduct business from top to bottom.

In mid-sized and larger companies, however, where technology wasn’t birthed at inception, the tide is turning.

All business leaders need to move with the times and digitisation is key to the transition. Knowing where to go, and how to get there, are two very different sides of the same coin.

While the burst of e-commerce has brought about many opportunities, its digital nature also brings about concerns of fraud, cybersecurity and the changing landscape of job roles. But behind all these changes is one driver: the finance department.

Why? Because the very essence of finance is evolving.

The finance professional now needs to be more closely aligned to individuals with the company’s managing director or CEO. They are not just the right-hand person with their finger on the financial pulse of the business anymore.

They are essential in providing up-to-date information, financial analysis and forecasting for rapid response decisions. It’s a far cry from the traditional way of doing business.

Finance professionals used to look in their rear-view mirror to provide business information – always looking behind them while trying to steer in front.

The introduction of predictive analytics is all about understanding data and looking forward, rather than back.

Today’s CFO is transforming into a real-time analyst. Tomorrow’s CFO will be a visionary.

Welcome to the era of CFO 3.0 

Article credit: Sage 

Business is advancing. We already saw a shift in the CFO’s responsibilities prior to the outbreak of the Coronavirus. Senior financial decision-makers were beginning to see the value of modern financial management solutions at a time when everything seemed to be changing: the nature of business, end-users, employees, customer expectations, and digital tools.

And then the pandemic hit, accelerating digital transformation and amplifying the associated challenges – especially those around governance, remote working, and cybersecurity.

CFOs are now getting to grips with new complexities, such as managing a remote workforce, as well as expanding security and compliance directives. Consequently, we are now observing the third significant evolution in the role of the CFO and other senior financial decision-makers.

The CFO of old, or CFO 1.0, was the historian. Then came CFO 2.0 – the real-time analyst who picked up on issues with real-time dashboards. However, now is the time to become CFO 3.0, a leader who uses data and predictive analytics to look to the future.

The evolving role of the CFO

To manage the new demands resulting from the pandemic, your business needs the right technology foundation to undergo digital transformation, where tech is integrated and coordinated across the entire business ecosystem.

In growing businesses, the first investments are often made in financial management, building out the technology you as a CFO will need for success.

However, this also means the business requires you to be front and centre when it comes to leading change through digital transformation.

This puts you in the ideal position to evolve from CFO 1.0 and CFO 2.0 to CFO 3.0.

You can put what you need in place to move beyond your traditional role and lead your business to new heights – you may end up driving business transformation beyond finance boundaries.

CFO 3.0 means you’re the visionary.

While today you’re focused on the past and present, tomorrow you’ll need to make use of vast amounts of data. This will help you predict the future of your business, uncover hidden opportunities, and close information gaps.

According to new research by Sage, where 311 senior in-house financial decision-makers from South Africa were surveyed, that shift is already happening.

The report, CFO 3.0: Digital transformation beyond financial management, revealed that post-COVID, 9 out of 10 (87%) CFOs now play a role in digital transformation, with 15% fully responsible for the shift.

With nearly all finance leaders actively involved in digital transformation, a more versatile role is emerging: one that merges skills such as accounting, analytics, business management, and strategic thinking. And, since budgetary approval is a key element of digital strategy, the finance function, too, has moved to the core of business strategy.

Digitally transforming the finance function

In handing over the number-crunching to automation tools, our research found that South African CFOs are gifted with the time and opportunity for creative and strategic thinking. There’s more room for critical analysis and innovation to augment business strategy. They also benefit from accurate forecasting, planning, and efficiency, as well as enhanced data governance.

To achieve top-level visibility of business performance, your finance teams must have the right digital tools and flexibility to use them. Only then can you dovetail with the other sides of business and collaborate for growth.

Digitisation means advanced analytics can improve decision-making and track metrics for real-time financial information, delivering the insight you need to uncover growth opportunities.

However, many senior financial decision-makers are still swamped with data since it’s streaming in from everywhere, including digital financial systems. They must also comply with ever-evolving data protection and management legislation, as well as increasing reporting demands.

 Managing uncertainty

 Of course, owning the digitisation journey is a big responsibility. This means the role of the CFO role is expanding.

Before the Coronavirus, complying with ever-changing finance legislation might have been the primary concern keeping CFOs awake. However, they now have the added task of ensuring compliance across a decentralised network, a scattered workforce, and a larger attack surface.

As the gatekeepers of data, fraud, cyber misuse, and data privacy, senior financial decision-makers that were already using the cloud and financial management solutions before the pandemic have found it easier to navigate this new landscape.

While this sounds like more work, remember that emerging technology can decrease the risk of data breaches – the cloud, for example, can enhance levels of verification and secure data in a more comprehensive way.

Success through automation

New technology can drive improvements in efficiency.

It’s here where automation can cut the hours you spend each week on collecting and preparing data. In fact, 64% of South African CFOs spend more time analysing data than they do gathering and processing it, compared to 50% of financial managers in the UK.

The survey also discovered that predictive analytics-based technologies will change the way CFOs operate at board level. Two-thirds expect emerging technology to audit results continuously and to automate period-end reporting, subsequently reducing time to close. This will become increasingly important as businesses interface more and more with open banking systems and automated taxation processes.

Automation shifts the burden of dealing with onerous, repetitive and simple tasks from you and your finance team to machines, which will help to ensure increased efficiency and quality.

Beyond benefiting your finance department, it can also lay a foundation for the better use of critical data and insights across the business.

 The final word on CFO 3.0

Technology can help you develop a finance function that’ll stand firm against future obstacles. South Africa’s economy and outlook have taken a knock from COVID-19. However, almost half (44%) of businesses already undergoing digital transformation reported that the pandemic created higher demand for their services, while 78% saw revenue growth in recent months.

As CFO, you’ll need to guide your finance department through a data-saturated world, so turn your attention to honing your management processes through data flow and governance, and analytical insight.

Although digital transformation has its challenges, your company has a bright future because you’re open to new tech and the changes needed – 73% of South African CFOs say their organisations are ready for more automation.

Thanks to next-generation and emerging technology, you have the freedom to become a CFO 3.0 – a leader who can expose hidden prospects and plug gaps using data and insights.

Embrace the part you play in delivering and shaping your business strategy through digital transformation. It’s far more gratifying than being considered as merely the person holding the company’s financial reins.