INTERVIEW OF THE MONTH
INTERVIEW WITH MR. SANJAY KATHURIA,
Head FSSC- International Operations
What are some of the transformation predictions in the finance function within large enterprises? In what ways are these contributing to better company performance?
Digital technologies are being leveraged to make finance processes more agile, accurate and help management make more informed decisions by providing insights on various KPIs through the dashboards. Some of the key transformation trends in Finance and accounting include:
- Touchless transactions as automation is getting bottomless, includes Cloud-based ERP platform for financial processes (includes AP, expenses management, settlements etc.), processes automation, and cognitive innovation that will continue to enhance, create opportunities to radically simplify processes and free up people. Finance will be a much leaner organization and business partners’ expectations from finance will continue to expand.
- Virtual Finance Function – According to a survey, the majority of CFOs plan to leverage remote working as a permanent option. Whilst providing the right technology tools to their staff and defining appropriate operating models to collaborate among various teams are key enablers, the lack of personal contact may impact employee engagement and motivation adversely. Employees R&R, town halls and other virtual employees’ engagement initiatives should help in addressing the same.
- The emergence of new service delivery model – The pandemic has pushed the companies to adapt to digital technologies more assertively and with AI & robotics implementation, Companies are re-evaluating the finance organization structure and benefits of automation against existing operating models includes what kind of processes no longer require human interactions, work to be performed remotely or onsite and how they are organized.
- Upskilling employees with critical skills – re-skilling of exiting employees by providing the right platform and learning opportunities helps in adding value to the business and financial processes.
- New roles & skills replacing traditional finance roles – a culture of learning to ensure that finance team members have the relevant skills to address the business needs. Bringing financial skills closer to business has created a need for new business techno finance roles and career pathing.
As a result of the above factors, there is a shift in the focus from communicating the results of transactions to providing Business insights and analysis, enabling strategic decision making, which has helped companies, effective credit management, increase operational excellence in turn achieving enhanced customer experiences.
Do you believe there will be a significant skill gap in the future as a result of such transformations? If any, how do we need to address such skill gaps?
Digital transformation has become an absolute necessity for internal efficiency as well as for delivering value to customers. Today’s technology will not be relevant in just a few years. 20 years from now, as many as 90% of technologies in use have not even been conceptualized. So, it is important for companies to digitally transform and continue to upskill their employees to ensure there are no skill gaps. Tactically, this would largely be achieved through the re-skilling of existing employees’ pool to drive the go-forward strategy of digital transformation. Priorities for companies need to be to build strategic talent capabilities, inclusive and purpose-led organisation culture and greater value for their group. Long term, we need to institutionalise the same by introducing such technologies as part of academics because the technologies which are used by children in school will not be in use by the time they would go out for work post academics. This will help in ensuring availability of talent pool with the right skills sets in future.
What is the role of the CFO in the context of such transformations?
Traditionally, the CFO role included the books and records of the company, financial reporting and statutory compliances however now the traditional role no longer exist as tasks have become more automated and a new cross-functional role is emerging where CFO’s have become fearless digital transformation leaders, launching widespread automation deployments and breaking down operational silos to align more teams through digitization. CFOs roles have evolved as new visionaries to their organisations, one where they invest more time and energy into how to strategically transform their operations. CFOs are now not just financial machinists; they are contemporary strategists, technology experts, data interpreters and digital transformation advocates who can look ahead and plan for the future. With predictive analytics, CFO can to make informed, critical business decisions and revenue projections based on current demands rather than relying on past performances.
How do you see the shared service organization of the future look like? What factors will contribute to its changes?
The pace of change will never be as slow as it’s today, arguably today is the slowest day of our life. Shared services organizations have matured over the years to increase the value of the services delivered to the business. The rapid pace of digital deployment, disruptive market forces, new customers and employees’ expectations are driving the shared service industry to focus on key business needs which are creating resiliency and adaptability in their operations to do more with less owing to shrinking budgets. Next-Gen shared services will help to enhance business flexibility and responsiveness to market changes while driving efficiencies. Their model will help in leveraging a common, centralized hub to develop, expand and deploy certain capabilities such as analytics and reporting, intelligent automation and customer experience management across the enterprise.
The Next Gen shared services will leverage enterprise-wide data and brings together cross-functional talent to deliver end-to-end services such as procure-to-pay and order-to-cash to the enterprise, it would also deliver cross-functional capabilities such as automation, analytics and continuous improvement as a service while focusing on customer experience.
How has COVID-19 impacted the shared service operating model? What changes are you seeing?
Shared Services organizations have evolved from the early 1990s of cost reduction to a process-based structure and subsequently to the hybrid model which combines diverse functional activities into a holistic integral unit, reflecting a shift from cost to a value focus agile approach. COVID-19 has presented fresh challenges to businesses across the globe and changed the way shared services need to operate to function optimally. The new shared services and GBS have included operational practices that were previously thought to be impossible. Some of these includes
- Remote working i.e. processes are not location dependent
- Complex processes delivery feasible through shared services organizations
- Addressing risks require more than BCPs and full automation
- Adopting agile technologies possible with the right level of support
Today, as many businesses are operating remotely, an effective shared services model is more important than ever with a focus on the ability to adapt and be agile to opportunities & threats. There is a shift from a decentralised operating model, where teams report into respective chief officers, to a centralised model where all the functional teams report to Centralised Global shared services. Speed, faster time to support customers, economies of scale and clear communications among employees and stakeholders, are some of the benefits of this operating model. Shared Service organizations are working towards increasing virtual work, expanding scope in remote delivery models, revamp BCPs, automate and enhance security, and build greater business resiliency to help be better prepared for any future crisis and thrive.