The five influences on future finance – ACCA Comment

Our latest report asked thousands of senior finance professionals from across the world for their vision of the future of financial leadership. Using their insight, we have identified the five factors finance chiefs must understand and act upon if they are to succeed in the job in the future. 

 

Volatility, risk, data, technology and talent were identified as the five key influences likely to impact the finance function over the coming years. Economic volatility and risk dominated discussions as the key influences impacting the top finance job. Successful alignment of the finance organisation to the strategy of the business is essential. In the knowledge economy, information is central to future value creation for all sizes and types of business. Finance leaders will need to prioritise investment in technology to drive growth, and digital technologies will become a core financial enabler. And last but by no means least, the quality of talent available to the chief financial officer (CFO) function could also make or break its future success.

 

Given the economic conditions we have experienced worldwide over the past decade, it is no surprise that volatility and risk will continue to provide huge challenges for CFOs in the future. Interestingly, however, 79 per cent of those we asked identified broader business risks, rather than just finance risks, as the most important single influence on the finance function in the future.

 

Successful business strategy by its very definition involves careful forward planning, something which is much more difficult in a world that is changing very quickly. With turbulence expected to continue in currency markets, and many industries facing significant disruptive new players, it will become much more challenging for a CFO to give speedy and accurate input into business decision-making. This stormy outlook has significant implications for funding capacity and cost control, and brings a whole new dimension to the management of enterprise risk.

 

The study also points to the fact that finance now has to support the wider company strategy, making sure its activities align with this through use of the right data. Using data to drive competitive advantage is nothing new, but challenges still remain in finding data that will enable finance to track, report and help the organisation take the right commercial decisions.

 

The CFO function needs to get better at influencing the business on the information that really matters. The pressure from data hungry executives for ever-quicker information from the finance team will only increase and it is vital that, in the race to meet demand, accuracy and relevance should not be compromised. It is the responsibility of finance to use the right data to report effectively and drive greater accountability across the organisation when it comes to data. 

 

It will come as no surprise that technology was almost unanimously identified as a core asset for finance leaders, who need to continue prioritising investment here to drive enterprise growth. CFOs have a responsibility to ensure social, mobile, cloud and analytics become a strategic tool in driving change.

 

In addition, with more talk of automation and robotic software in the market, technology is central to the agility and scalability of the business. There are countless options for automation in many finance teams, but the application of robotics software to core finance activities needs to be properly evaluated. After all, automation does not always mean enhancement when it comes to finance.

 

Perhaps the most important aspect of the report is the emphatic belief among finance leaders of the importance of people. In short, it is always about talent. The quality of the talent pipeline is vital and the range of skills and capabilities tomorrow’s CFOs need to master has never been greater.

 

For example, the CFO of the future requires communication skills, change management experience, and the capacity to think strategically and innovatively. The old adage of “facts tell, stories sell” is apt when it comes to the future of finance. Storytelling means putting the facts together in a relevant context that people can understand and be motivated by. Finance professionals need to not only do an excellent job, they need to be able to communicate what they are doing, how they are doing it and most importantly, why.

 

With the importance of future talent now indisputable, one of the biggest questions facing businesses in 2015 is this – where will your future finance leadership talent come from?

 

It’s a critical question, and businesses need to think very carefully about how they will develop the next generation of finance leaders. This is something we at ACCA have taken an active part in through our Leaders of Tomorrow programme. Leaders of Tomorrow is a two-year programme funded by ACCA that has been carefully designed to discover high-achieving individuals and help them to complete their skill-set, and be ready to become the sort of future CFOs we have identified in our report.

 

High-flyer Melissa Leong, treasury manager at Shell, is one of the young finance professionals who has embarked on this programme to develop her leadership capabilities. With a variety of experience already on her CV, including working for PwC in Malaysia, she now manages the cash, foreign exchange exposure and funding of various businesses across the globe for Shell, including aviation, manufacturing and retail.

 

Melissa is now building on the professional expertise gained through her ACCA qualification and her experience to date on the Leaders of Tomorrow programme, where she is developing her strategic thinking skills and broader leadership capabilities. Through exposure to an even greater breadth of financial and business challenges, Melissa is aiming to become a complete and flexible finance leader.

 

Another Leader of Tomorrow, Yvonne Amponsah, has been working at Cummins for four and a half years, and knows what it takes to be a success, after being asked to move straight to a full-time role just nine months into the graduate scheme. Speaking to Yvonne, she was clear in her ambition to become a CFO and ultimately even a chief executive.

 

And that is what the ACCA Leaders of Tomorrow programme is all about – helping finance professionals to reach the top.