Embodying the CFO of Industry 4.0
GONE are the days when the chief financial officer (CFO) was the glorified controller who makes sure the books are right and the treasury is in robust health. In recent years, the role is increasingly being redefined in order for companies around the world to survive and stay sustainable in the Fourth Industrial Revolution.
Industry 4.0 is a tough place to navigate. It’s rife with smart technologies that redefine business models, automation that’s fast displacing manual work while creating new jobs, and huge amounts of data generating invaluable insight into the marketplace. CFOs are at the crossroads of this transformation and have to quickly hit the reset button.
In the Ayala-FINEX Finance summit held on August 15, 2018, various speakers invited by the Financial Executives Institutes of the Philippines (FINEX) shared their thoughts on how CFOs can stay ahead in this highly challenging environment. One of them, Mr. Yu Ming Chin, executive director of Viventis Search Asia, cited critical things that CFOs need to brave this new world.
One is to apply strong and agile management skills. Agile is everywhere, and it has turned into a true buzzword being talked about from the C-suite to the project management level. Its textbook definition is to move quickly and easily; in the CFO role, it entails having a strong sense of perspective sensing, able to observe as well as react to exogenous changes in the organization and industry.
“We, as CFOs, embody the body of inertia. We ourselves are the pillar of resistance to change,” Mr. Chin said, highlighting the need for a profoundly new a personal and professional mindset to develop agile thinking.
He explained that from merely presenting balance sheets and income statements, finance leaders are entering “a critical chasm” where they need to take a certain amount of risk to be a true partner in guiding the company’s strategy and direction. Mr. Chin encouraged a balance between risk taking and risk management, and worrying less about making a misstep than taking a leap of faith.
Another interesting suggestion is for CFOs to invest in ABC — for artificial intelligence (AI), Big Data, and the cloud. Indeed, as explained by the other speakers from IBM and KPMG who were all experts in the field of technology, much of their true potential and applications are still to be fully realized, but AI, blockchain, and similar new technologies are likely to have a huge transformation impact on the finance function today and in the coming years.
Closely tied to investment in ABC is planning and managing workforce transformation by building a future of finance road map, which involves training and re-centering the intelligence of finance professionals to succeed in Industry 4.0. The success of any finance leader is built around a strong team so the CFO needs to employ people, not just for their technical know-how, but also their ability to strategize, problem-solve, and infuse rigorous technology into finance work.
Of course, the old-fashioned value of integrity is here to stay. CFOs are the de facto vanguards of integrity in the organization, whose failure is often a failure of its integrity. Thus, in a very unpredictable environment, they need to apply a strong leadership to maintain a cohesive team of the right people with the right solutions, right infrastructure, and right values in place.
Indeed, with robots and rapid digitalization already crossing over from science fiction to our industries, the CFO is better positioned to add significantly more value to the business in real time, at lower levels of risk and cost, and with greater levels of automated control.
There are more exciting times ahead. FINEX, together with ING Bank, continues to shine the spotlight on the country’s outstanding CFOs through the 12th ING FINEX CFO of the Year Award. The annual search, which is open to all qualified CFOs from the public and private sectors, publicly listed or unlisted companies, is accepting nominations until August 31, 2018. For those interested to nominate excellent CFOs they know, I invite you to go to the Search website, www.ingfinexcfooftheyear.com.
Ma. Victoria C. Españo is the President of the Financial Executives’ Institute of the Philippines (FINEX) and the Chairperson and CEO of Punongbayan & Araullo Grant Thornton, one of the leading Audit, Tax Advisory and Outsourcing firms in the Philippines.
marivic.espano@ph.gt.com
