Can the CFO be a true business partner, and is there really such as thing as control, pondered SA's public sector CFOs

“The biggest challenge for public sector CFOs is supporting the mandate. Some mandates are unfunded or contradictory,” said one of the participants at last night’s round table for public sector CFOs, held at the Menlyn Boutique Hotel. The evening’s discussion centered on effective communication and reporting to stay in control, and posed the questions of whether or not the public sector CFO can be a true business partner, and whether it is possible to ever really have control of the business. See pictures from the event here.

"Effective reporting is still to get the reporting correct. Before you can be strategic and add value to the business, your numbers must at least be correct." - participant

The evening's two keynote speakers, Shabeer Khan, CFO of the dti, and Nichola Dewar, CFO of Postbank and Acting CFO of the Post Office, shared their experience of both effective and ineffective systems. "Sometimes we get confused by the level of reporting, because sometimes our reporting needs to reach the ordinary citizen on the ground. For me it's about how can we simplify reporting for the man on the street," Shabeer said. One of the participants added: "Reporting has become such a function of regulatory compliance that it's become a drudge thing. But there's so much value in the data that you use for regulatory purposes, we must start thinking how we derive value and use that to our advantage."

Shabeer continued: "To me reporting is an important function because to we talk about being a true business partner but people take it for granted that there's a CFO. If you don't produce credible numbers, the impact is great. If we don't produce numbers in accordance with a set of accounting standards, imagine the impact on the market out there. You need to have standards and compliance. To me CFOs are the truest business partner in that sense, you are providing a framework where they can see credibility in numbers. And solid financial numbers bring market confidence."

With regards to whether CFOs can add value to businesses Shabeer believes this is a firm yes, saying there are various ways this can be done. "As government we can create a brand that people can relate to. It's about building the brand and everything related to that brand. I think there's a lot of things we can do differently. Overall, we can do much more as government in terms of setting up this brand. To me, we are doing a lot of good work."

"The power of reporting is that people will remember things. If you pick up the key ones and present them in a way that people can remember, that's effective." - participant

Nichola opined that effective reporting to stay in control depends on the situation. "In terms of managing a business that is effectively in crisis, you need different kinds of reporting. You actually need daily reporting. It's amazing what you uncover. You really learn your business that way. Don't just focus on the numbers, focus on the moment that you're in in the month and see if you can change that revenue line in the month." She further opined that the post office is perhaps too compliance focused, so much so that it is no longer focused on its right to stay in business. "You need to focus on what are the strategic insights derived from the reports. You can use cheap tools to identify problem areas, like Excel, and which are quick, and you can then carry on focussing on your business," she said.

"With regards to the issue about being a strategic partner - you need to understand where the organisation is going. Otherwise how do you create an enabling environment? It's also about strategic partnerships. Strategic partners have to be there for the long haul. Because you're not going to get success over night." - participant

Karin Kruger, Associate Director in KPMG's Data and Analytics function, offered her own insight into the power of visualisation. Some six years after she left the employ of FNB she could still recall quite clearly the bank's three-point plan for change. This because it was depicted visually in an infographic. Some of the participants exclaimed out loud at this revelation, which is in essence so simple and makes complete sense. A visual bypasses the challenges of language or level of education, and is retained by its audience far easier than the information read in a two or three-page document - if such a document is even read. As far as effective reporting is concerned, Karin offered the following advice: "Don't think that you can't go on the journey of effective reporting without new skills or tools. Look at what you have and start leveraging that and then start to journey. That will start opening doors. You can do so much with what you have, without capital outlay. Be brave and take that next step and use what you've got."

"To be an effective business partner you need to spend time interpreting the information and looking forward. But getting there is the problem. Because sometimes your financial information is not on a system." - participant

Wrapping up the discussion, CFO South Africa MD Graham Fehrsen, urged the group to set down some action points and identify key takeaways. "You need to know where you are in this journey," said Shabeer, "because where you are will determine how you go forward. For us as dti the reason why we could do a lot more in terms of reporting was because of the clean audit but understanding where you are in this journey there are other ways. Can you still report effectively even if you don't have a clean audit? Yes. We can all do something different, for example, visualisation. It's about packaging. In terms of business partnering this means partnering with the head of marketing." Nichola's advice was not to "sweat the small stuff". Get the big insights first, she said, and get the directionally important things to surface at the right level of the organisation to encourage the right conversations. "You'll get the compliance right over time. And then you can focus on the future of the business," she said.

What came out from the participants included the following:

  • You have to know where you're going and know what pieces of information you need to move through the phases and life cycle of your business.
  • Ensure that what you are reporting on is understandable. Keep it simple.
  • Never underestimate the power of visualisation. It immediately conveys the message.
  • Effective reporting builds staff morale as well as confidence.
  • Put your achievements where everybody can see them. Be proud of them.
  • Change your paradigm and way of thinking. Start talking to the numbers, because then the numbers will talk back to you.
  • The CFO and the finance function need a clear vision of what state they need to be in to support the business.

Join us in June for our next public sector round table, the fourth in our new series.

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