Webinar reveals CFOs need to drive finance transformation and maturity

Leading CFOs explain that it’s not too late for organisations to work towards financial maturity.

CFO South Africa recently hosted a webinar that looked at a model for financial maturity and focused on measuring financial success on a scale, from which businesses can assess their financial maturity.

The webinar kicked off by highlighting the problems that businesses may have with liquidity, especially in light of the pandemic, and that the need for businesses to manage their cash flow situation has never been so pressing.

Coupa EMEA senior VP of operations Martin Bellin pointed out the importance of businesses looking inward to discover and address the problems that they face. “Self reflect, know your numbers, but know the key drivers of your numbers,” he said. “Get insight into why your business functions in the way it does.”

Martin pointed out other changes that the pandemic has made to the business environment: “Covid-19 disruption has led to many changes including remote work and learning – we need to be able to access every kind of information in a visible and remote way,” he pointed out. A lot of emphasis was placed on resilience and situating organisations in places where they can be adaptable.

The four-stage model presented by Martin is a part of analysing the financial health of a business. It would allow companies to honestly introspect about their financial situation and pick up where and how they could improve.

Martin argued that too many companies are positioned at the initial stage of financial maturity – being reactive – where they have an over-reliance on manual processing, which is prone to errors. If there is no disruptive change there is no incentive for adaptation, he pointed out. Teams in this stage are often siloed and unable to promptly pinpoint and address challenges, and CFOs don’t know where to start implementing change. Martin highlighted the importance of starting now by finding a platform that allows you fast and easy access, and provides the ability to digitise processes from end to end.

To address the issues faced at stage two, where systems are operationalised, he said it was important to tear down silos between departments and to gain visibility around transactions. CFOs needed to know what was happening with suppliers and operate securities, he said.

The next stage of financial maturity is to introduce technology into all systems. This would include the development of a consistent framework around security and compliance, which would reduce risk. He pointed out that digitisation also protects businesses from both internal and external attempts to defraud.

At the final stage, he said, the business is optimised, and data is available at your fingertips. People interact consistently, and the CFO is in a position to enable the business to be both proactive and reactive and ready to face any situation

Martin noted that this model is meant to position financial departments to support the company’s success, while conveying the importance of using past experience to improve the company and protect it from harm while ensuring that it is ready to face challenges. Regardless of the maturity of the company, and the difficulties that they foresee in implementation it is important, as Martin put it, to act right now.

Sasol Energy Business CFO Brenda Baijnath highlighted the importance of CFOs taking responsibility and being honest with themselves. “Financial assessment can be done by drawing on third party experience to review processes,” she said.

However, Brenda was clear this process has to be driven by the CFO, who has to make intentional discussions about financial transformations. The question of impossibility was also important, she said, pointing out that there is a mindset shift necessary to improve financial maturity. You have to be willing to see what is possible and intentional about achieving it.

Then the speakers discussed where they could improve on their businesses. Coca-Cola Beverages South Africa FD Walter Leonhart stated that It is easy to be overwhelmed by the scale of the things that you want to change. “However you have to ask yourself if you’re doing things in the best possible way and learn from the other organisations,” he said. “By looking outside you can break down ‘silo mentalities’ and benchmark your company with other companies, compare and improve.”

Brenda noted that change management is important: “To deliver at speed we need to make sure the people on the ground are willing to adapt to a changing environment.”

The takeaway was that regardless of where your company is, you shouldn’t be afraid to start working towards financial maturity – and should start right away.