The shadow cast by global, economic and political uncertainty in 2019 is hanging heavily over the heads of Australian (and New Zealand) CFOs, irrespective of the size of the organisation they represent.
The evolving strategic role of today’s CFO has never been more dynamic. The CFO position demands a 360-degree view in leading the adoption of new developments or ideas across a shifting business landscape.
It is sobering to realise that we are less than a quarter into the year, as wherever finance leaders may turn, they cannot escape the potential impact of turbulent times. Such a phenomenon is being consistently signposted by experienced and respected analysts around the globe.
This reality is starkly underlined in the influential CEDA (Committee for Economic Development of Australia) 2019 Economic and Political Overview (EPO) report. There is little room left for argument when the foreword by CEDA chief executive, Melinda Cilento, reveals that “of all the EPOs CEDA has compiled, (over 40 years) there’s arguably never been an edition produced in an atmosphere of such high level global economic and political uncertainty.”
Today’s CFO needs some ‘stars’ to guide the destiny of their organisation in this exciting, but turbulent, era:
Uncertain times require data insights
One of the most powerful tools available to the CFO is great data. My Workday colleague, Betsy Bland, vice president, corporate strategy, explained: “Many CFOs are a bit pessimistic headed into 2019, several global survey results revealed almost half of them expected some form of recession to occur by the end of the year or into 2020. That kind of uncertainty makes finance leaders nervous, and it’s during these times that they need not just reliable information, but also real-time data – both from inside and outside of their organisations – that can help them manage risk more effectively and adjust as things unfold.”
This insight was reinforced by a global survey conducted by Workday across 10 major industry sectors in Asia-Pacific, the Americas, Europe and South Africa. The responses revealed that CFOs believed that advanced analytics will be critical to the finance function’s ability to inform decision-making in 2019’s data-driven economy.
Uneven adoption of emerging technology
Against this background of geopolitical tensions, global and domestic political and economic challenges, Australian CFOs will be forced to evaluate their existing technology to ensure they can accommodate regulatory and reporting changes and take advantage of commercial opportunities that are presented from limited economic growth. Ready for change means being built for change.
The same global survey Workday conducted, also found that while there is an appetite among CFOs to embrace new technology, the overhanging shadow of economic and political uncertainty, in addition to legacy technology, prevented many of those clicking the switch on. Only 35 percent of corporate finance teams confessed they are making extensive use of advanced analytics in key finance areas such as planning, budgeting, and forecasting.
Finance talent suited to the 2019 business landscape
While the shift to a data-driven finance team will not happen overnight, there is an underlying need to rethink the design of who and how the CFO function will determine the recruitment of finance talent. Such an initiative will shape the culture of the entire function.
Workday’s vice president, corporate strategy Betsy Bland reported how in conversations with clients, “many finance leaders reveal they increasingly understand their organisation needs to add analytical and data science skills to the function.” Therefore, they are attracting and recruiting candidates from a data scientist and analysis background. Artificial intelligence and machine learning are adding a new dimension to requisite skills of finance talent. This dimension, combined with the traditional finance perspective, will enable tomorrow’s finance leaders to be better placed to tackle the turbulent times that lie ahead.
James Harkin, Asia Pacific Director, Workday Financials
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