INTERVIEW OF THE MONTH
INTERVIEW WITH MR. SUSHIL KEDIA,
Head Finance Centre of Excellence, Tata Steel
In your opinion how has the finance function evolved over the last few years and what are some of the key drivers of this change?
- Before we understand what has changed, it is important to look at what has not changed but has only increased with time i.e. the need to understand the business inside out and command understanding of the business drivers. The expectations have shifted from being one of the passengers to being a co-pilot to the CEO and providing insights to enable informed decision-making.
- Finance holds the key to the digital transformation agenda by striking the right balance between investments that bring RoI (Return on Investment) and those which are pivotal to organizational readiness for the future.
- The speed of change in the external environment has pushed finance to be nimble and agile.
- Focus on ESG has never been as high and brings in a cultural shift to look at a profit with an impact on the stakeholders. This is changing the capital allocation process driven by Finance.
How will digital technologies have an impact on the finance function of the future? In what ways can the finance function leverage these technologies to drive business performance?
Digital has become the lens for looking at business drivers bringing in the speed of execution with accuracy supported by in-memory computing. Routine tasks get automated using Robotic Process Automation (RPA) freeing up resource availability aided by Process Mining which allows us to automate the right processes. With a focus on data, finance functions can move up in their data maturity and leverage analytics by moving from descriptive to predictive to prescriptive. This will happen over a period of time by building a culture of data-based decision-making.
There are several examples of digital transformation initiatives failing. Is there any ‘rule book’ or equivalent that when followed increases the chances of success
Each organization will have its own playbook for driving digital transformation. Based on my experience of having led digital programs, some differentiators could be:
- Fail Fast – When you embark on change initiatives, failing is always a possibility. Where we go wrong is that we do not fail fast. There is often a tendency to drag projects even though they are not delivering the right results because you have committed cost and resources on the same. The more you delay the decision to abort such projects, the more damage you cause. The decision is difficult, but you need to take it.
- Getting carried away in the Digital Carnival – As board room discussions bring digital to the center stage, organizations get carried away with the count and variety of technologies deployed. For e.g. focus shifts on an increasing number of BOTS than looking at processes getting automated and outcomes achieved, getting the 1st blockchain project, etc.
- Getting ahead of the organizational culture – Sometimes the speed of transformation does not take cognizance of the organizational culture. We need to move from being “Best in Class” to being “Best in context”
- Get a dedicated team – Often organizations want their teams to drive transformation along with their day job which de-prioritizes the transformation agenda
- and last but surely not the least, communicate, communicate & communicate.
Do you believe there will be a significant skill gap in the future as a result of such transformations? What if any, will be the kind of skill gaps?
We have traditionally hired people with accounting & tax backgrounds to handle finance functions. With the increased use of digital technologies and increased focus on data, organizations will slowly need to change the blend of resources by hiring for technology skills. If we do not bring in this change, finance will struggle to keep pace with the change. CFOs need to take this up in their hiring agenda and drive this change as they work on upskilling their existing resources on technology skills.
As RPA developers and data scientists become core members of the finance team, some behavioral skills that will gain abnormal focus will be:
- Business Storytelling with the ability to narrate the story behind data and explain it in a lucid manner
- Problem Solving as the external environment gets complex
- Be comfortable with chaos as change becomes part of everyday life