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CFO in Transformation for the New Age
The document outlines the evolving role of the CFO in response to contemporary business challenges, emphasizing the importance of strategic partnership, risk management, and innovation in finance. It highlights the necessity for functional excellence through modern finance processes, dynamic performance management, and focused financial flexibility. Additionally, it stresses the need for proactive engagement and collaboration in talent management to navigate the complexities of a VUCA (Volatility, Uncertainty, Complexity, Ambiguity) world.
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CFO in Transformation for the New Age
- 1. 1 CFO In TransformationFor The New Age Changes & Challenges By D. Sundaram VC & MD TVS Capital Funds 24th August 2018 Mumbai
- 2. 2 Larger Purpose ofeverything we do. • Corporate objective - Delight the customer - Reward the Investor - Govern responsibly - Remain socially relevant • CFO is the Strategic Partner of Team • Past descriptions are obsolete !!
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- 4. 4 Changing contours andcolours • Global policy shifts • Skyline is reshaping (business models) • Changes & Expectations are continuously impacting business • Technological strides are a boon come with risks • Known “Unknowns”; unknown “unknowns” • Battle for Wallet; War for Talent • Erosion of Trust • Green sustainability demands
- 5. 5 CFO Grid LEADERSHIP ATTRIBUTES How WhatSKILLS & CAPABILITIES Business Partnership Functional Excellence
- 6. 6 Business Partnership • BusinessIntimacy • Proactive engagement • Constructive challenge (vs. Debilitating cynicism) • Co-piloting for - Market Leadership - Cost Leadership - Thought Leadership • Performance Gap Vs Opportunity Gap
- 7. 7 Functional Excellence • Preparefor continuous change • Contemporize the function (Best Practice Vs Next Practice) • Sync with Tech potentials
- 8. 8 Building Blocks forFunctional Excellence • World-class Finance Processes • Innovative Business Partnership • Dynamic Performance Management • Focussed Financial Flexibility & Capital decisioning • Sound Risk & Compliance Process • Excellence in Talent Development
- 9. 9 World Class FinanceProcesses • Brilliant Basics • Tech Enabled No touch Transactions • Fraud Proofing. Build Control layer on top of ERP Real time concurrent exceptions !! • Shared Services : from “back” to “centre” insights generator
- 10. 10 Innovative Business Partnership •Business intimacy • Balancing collaboration & independence • Decision sciences, e.g. marketing spends • Pricing & margins - Value creation levers - % margin Vs absolute PBT growth ! • Ownership of Cost Agenda • Slice / Dice : Business insights
- 11. 11 Dynamic Performance Management •Limitations of fixed budgets • Need for continuous forecasts • Metrics & measures - Clarity. Transparency. Relevance • Cost Budgeting Accounting headings Vs Activity focus • Plans : Disciplinary tool or visionary road map ?
- 12. 12 Focussed Financial Flexibility •Business ownership of Balance Sheet • Capital Allocation : Create Value • Cash management systems - importance of continuous forecast - sudden nasty surprises ?? • Sharper focus on Below Line Costs: Financing & Tax
- 13. 13 Sound Risk &Compliance Process • Bedrock of Governance engagement of CFO for Boards / Audit Committee • Risks : Financial / Reputational • Technology brings high risks in the form of Cyber threats (Cyber Security) • Proactiveness in the approach • To be the driver of the ERM and compliance across enterprise.
- 14. 14 Talent Management • Buildingthe network of the most valuable asset • Capability Building • Learning culture • External orientation
- 15. 15 To recap • Fundamentalrole unchanged – Protect Value; Create Value. • Steer the business to navigate well in the face of “disruptions” • Create a vision of the future and build a roadmap to ensure the finance function is fit for the new world. Since accurate prediction is not possible, create Agility to course correct as necessary. • Get the right people and right technology in place, to manage inevitable disruption • Play a leadership role in driving E2E processes, with the Business Services organization under-pinning most activities in the company As Peter Drucker said, ‘The best way to predict the future is to create it’.
- 16. 16 And to sumup • Play the role the future demands • Remain contemporary • Value creation that is inclusive of all stakeholders • Demonstrate Pro activeness to manage risks
- 17. 17 THANK YOU Acknowledged contributionsfrom: R. Sridhar, Chief Internal Auditor, Unilever Plc P. B. Balaji, Chief Financial Officer, Tata Motors