PwC’s Grant Searle and Workday’s Zuko Mdwaba explore the six topics shaping CFOs’ agendas.
CFOs are essential in navigating the changing world. They are constantly on the lookout for ways to deliver greater value to the business and play a pivotal role in the funding of technology investments.
During a recent CFO South Africa webinar, brought to you by Workday, Workday country MD Zuko Mdwaba said that over the last 18 months disruption has become the normal state of business and that organisations need to embrace this disruption in order to keep up with the changing world.
“Recent events have highlighted how important agility is and, as a result, many organisations have sought to change and accelerate on their digital transformation journey,” Zuko said.
“Covid-19 and the virtual working environment has sped up transformation significantly,” added PwC partner Grant Searle. According to PwC’s most recent Pulse Survey, there are six topics shaping finance leaders’ agendas at the moment:
1 Future of work
Eighty-four percent of CFOs surveyed believe their company is successfully addressing employee mental health. “CFOs are optimistic about the future, and they’re placing big bets on people and technology as they redefine both the future of work and their future growth agendas,” said Grant.
However, he added that only 31 percent of employees agree with this, leaving a big gap that still needs to be closed.
2 Digital transformation
Grant explained that organisations are upping the ante around digital investment and driving business transformation. Seventy-five percent of CFOs are increasing their investment into digital transformation over the next 12 months, despite the fact that they might have fiscal challenges. “This is not just about the finance function, but also about the top line growth and creating operating efficiencies across the business.”
3 Purpose and ESG
Thirty-three percent of CFOs surveyed say they plan to include ESG disclosures in their next annual report. “Organisations shouldn’t wait for legislation or regulation but need to charter the ESG territory themselves and look at what makes sense for them in the paradigms they work in,” Grant said. “This will continue to be high on the list of priorities for investors, employees and the C-suite alike.”
He added that CFOs should expect more pressure around disclosures broadly and progress on their ESG efforts. “They can use ESG as a springboard for collaboration with a broad group of stakeholders, while continuing to manage broader societal obligations.”
4 Return to growth
Grant explained that CFOs will continue to focus on rebuilding revenue, customer strategies and scenario planning as they look to emerge stronger. Twenty-eight percent of CFOs surveyed expect an increase in revenue in the next 12 months.
“CFOs will keep making changes to products and services, pricing strategies and customer segments to increase revenue,” he said. “They will also invest in data analytics, cloud technologies and automation to help spur growth and improve efficiencies.”
Grant added that the one thing Covid-19 has proved is that we can continuously expect change. “I think some of the paradigms and complexities we have worked in have evolved even further.”
5 Tax, risk and regulation
Sixty-seven percent of CFOs surveyed say policy and regulatory risks will be more pressing over the next four years with a Biden administration and the knock-on effects thereof. “It does impact our economies through imports and exports,” Grant said.
He explained that most CFOs expect risks such as compliance, third-party disruption, cybersecurity and brand damage to be just as pressing as they were over the last four years. “CFOs are concerned about policy and regulatory risks and changing legislation.”
6 Diversity and inclusion
Forty-nine percent of CFOs surveyed say their company is planning to increase employee diversity and inclusion training. Again, Grant referred to the paradigm shift of business, saying that “for those of us who are the numbers people, it’s interesting that many of the soft issues are coming into our paradigm”.
He said that this is because of the new workforce of the future and how organisations manage their talent. “Social and economic tension, along with unrest, have caused company leaders to do more to better support their employees and communities.”
He added that CFOs are planning to help bridge the divide and say they are working with other C-suite leaders in increasing diversity and inclusion training for employees and creating new opportunities for them to have conversations about difficult social issues.
The survey also showed that 48 percent of these CFOs see the loss of in-person corporate culture as the biggest challenge to hybrid work, and 31 percent say hybrid work is not a challenge to revenue growth. “Virtual fatigue and similar issues are becoming more of a challenge as people struggle to associate with what their corporate identity was prior to Covid-19 and the world of virtual work,” Grant said.
Grant explained that there are a couple of key disruptors transforming the world of work, including:
- Global megatrends such as climate change that are influencing what people want from business, their culture and what they stand for going forward.
- Automation of jobs that is affecting the types of roles available and the shape of the future finance workforce.
- Emerging technologies that are redefining how we interact with the workplace and each other.
- The changing demographics of the workforce that are demanding more focus on wellbeing and ethics.
- Covid-19, which has led to a change in business models and acceleration of leveraging technology, with businesses being forced to respond and then identify opportunities for profitable growth.
Grant said that the disruption has also accelerated the change in finance, with the need to rapidly evaluate multiple scenarios, support business agility and act fast. “This has reinforced the need to transform and adapt to the new world of digital, where new skills, behaviours and ways of working are required to be a leading finance function.”
He added that CFOs’ top priority for the finance function in 2021 is to establish finance as the business partner across the enterprise. “So the new emerging mantra is ‘connect, navigate, mediate and build resilience’.”
Zuko agreed, saying that Workday has seen similar results specifically in the South African market, where CFOs are rapidly transforming their businesses and embarking on their digital transformation journey. “Workday’s role in helping CFOS navigate this new world is to simplify the uptake of digital technologies to ensure they can quickly transform their finance functions,” he said. “We want to enable functions to meet their goals and ultimately accelerate becoming a more agile, digital enterprise.”
He concluded that PwC and Workday can make the transition from where organisations are to where they need to be far less daunting.