Finance Indaba experts say it’s time to move beyond reporting to broader value creation

Standard Bank Group’s Sayuri Govender believes detailed budgets do not lead to outcomes.

Changing regulations, standards and guidelines combined with reliance on Excel jockeys have traditionally left finance teams struggling to ensure accuracy and ensure reporting excellence.

However, the once-in-a-century Covid-19 event has brought about digital acceleration and opportunities for more dynamic and accurate finance functions, according to a leading panel of experts at the Impact Session, ‘Showcasing performance: Get ahead of reporting challenges’, at the 2021 Finance Indaba.

“We have heavily invested in digital platforms over the past 12 months. Previously, it would take us 15 days to close the books. With integrated data, or one source of truth, we now have real-time dashboards to monitor productivity and sales,” explained Sasol Energy CFO Brenda Baijnath.

“Internally, leaders are better equipped to make decisions,” she said. “We are able to do quick scenario planning like the effect of a dollar increase on the business or price hike on our margins. Our response is more nimble and agile.”

The fast adoption of digital tools has resulted in a dramatic shift in the finance function, with the focus now being 20 percent on historical reporting and 80 percent on forecasting. “Finance has earned its seat at the table and can influence the way the business makes decisions on investments and customers,” said Brenda.

Standard Bank Group head of reporting and analytics Sayuri Govender had session attendees abuzz when she revealed that the financial services group had abandoned annual budgets in favour of rolling forecasts.

“We looked at the financial and non-financial true north metrics across the group and managed to digitise this. Six value drivers and targets were set down to business unit level. This enabled us to stop budgeting. Very detailed budgets do not lead to outcomes,” she revealed.

With non-financial metrics, the focus was on shifting and changing behaviour, so the metrics cascaded into performance, which then cascaded into reward. In this way, the organisation is becoming future-ready, by transforming and using digital capabilities to look at revenue streams.

This forward-looking ability has flexible dimensions on linking the growth trajectory and metrics to macro-economic drivers, according to Sayuri. “Reporting tools and platforms are dynamic in nature. Covid-19 accelerated the ability to get data we needed to measure and track on a real-time basis in terms of footprint, channels and digital activities. It has enabled us to improve our storytelling ability internally and in the market with passion and conviction,” she said.

Tangelo Software founder Erwin Groenendal said that South Africa is already adept at telling a company reporting story digitally.

“We see companies taking a digital-first approach. Almost 40 percent of South African companies publish a website version of their annual report, which shows the high rate of adoption of digital reporting,” he said.

The move from printing large volumes of annual reports and mailing them to shareholders, to online reports, has led to increased engagement with a wider range of stakeholders from customers and suppliers to employees.

“When you reach more stakeholders, you also build your reputation. It is important to look at digital as not just a product, like the annual report, but also digitise the process where teams can collaborate on the document remotely within a secure file-sharing space,” he advised.