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Market pressures accelerate the evolution of the finance function

Digitisation, the pandemic and hybrid working are evolving the skills required from finance directors and their teams

The roles performed by financial directors and their teams are evolving. Once responsible primarily for traditional finance and accountancy functions, modern financial directors have become business partners to the CEO and increasingly play a key role in the organisation’s strategic direction, as well as its transformation.

“The key requirements for a financial director is that he/she should be technically strong and be able to take over full financial control of the business,” says Mark Masson, director, recruitment and search at FD Recruit.

Financial directors must take greater account of regulatory change and safeguard their companies against risks.

At the same time, the finance function can no longer work as a siloed unit within the business. It must collaborate closely with other business functions, according to Masson.

“[A financial director] also now needs to be able to provide commercial and strategic input into the business and help with acquisitions and fundraisings,” he says.

“A typical financial director also cannot work in the silo of finance and needs to be able to work effectively with operations as well as sales and marketing.”

Transformational leadership

The pandemic has elevated the importance of operational efficiencies, increasing investment technology, which, in turn, has broadened the remit of the financial director further.

Financial directors are increasingly expected to manage the impact of digital disruption, according to David Carrick, CFO at Apex Group.

“Today, digital technologies are increasingly forming part of the everyday role of the financial director,” citing APIs, Robotic Process Automation, data analytics, blockchain, cloud computing, Artificial Intelligence, and machine learning as key instigators of change.

“[Financial directors] also need to promote an open book approach to company data, and make data analytics a key priority for the entire organisation,” he says.

“CFOs will continue to be faced with an array of choices when it comes to technologies that will transform how they perform their role.”

Adapting to hybrid working models

The need for greater digitisation has been accelerated by the pandemic, which also brought a seismic shift towards remote working.

However, despite the vaccine rollout helping businesses to bring people back to work, hybrid working models look set to become the “new normal” moving forward, bringing new challenges for the finance function.

“Companies are increasingly considering making their staff roles part-home and part-office based, and this is impacting the role of financial directors,” says Masson. “It calls for financial directors to be flexible in their approach to homeworking, and to have the skills to both manage and develop people effectively when they are working from home.”

Few periods have proven as challenging to all industries as the past 18 months, says Carrick, with CFOs responsibilities moving well beyond traditional finance or accounting.

“Having dealt with business continuity planning in relation to Covid-19 since the original outbreak in Asia, the finance team gained the advantage of some early learnings around how to overcome procedural, operations and infrastructure challenges.”

In line with this, several other financial directors also recognise that their entire teams are in a period of transition, which requires additional skills.

“Our finance team needs to be flexible, proactive and operating as an effective business partner to the wider organisation. Cross-functional communication is ever more essential as is the ability to influence key business stakeholders,” says Danny Chaffer, CFO at pharmaceutical communications company Bioscript.

“There is now a greater dependence upon networks of individuals working in project teams with leaders as enablers rather than dependence on the traditional organisational hierarchy,” he says. “The pandemic also encouraged more empathetic behaviour in order to maintain employee morale, loyalty and engagement.”

Jim Fullerton, CFO at content management solutions company SynApps, echoes similar sentiments and emphasises the need for efficient and effective communication and collaboration skills.

The pandemic also affected the way finance teams collaborate, according to Akito Suzuki, CFO at marketplace software company Spryker.

“As a dispersed team, we made sure to create regular non-work related social encounters to both uphold our team spirit but also look out for one another in this challenging time,” he says.

“What I am particularly happy about is our team development towards a constructive feedback culture. At Spryker, we are developing at such a fast pace that all of us are constantly exposed to new challenges and learning opportunities. To master them, mutual support and guidance is essential.”

New tech, new skills

Modern finance teams, like their leaders, are also expected to be much more technologically literate. Chaffer points out that all finance professionals need to see technology as a key business enabler and not just a bunch of systems that help them to fulfil tasks.

“There is the need for the team to understand how systems can create commercial advantage rather than just using systems for data input and output,” he says.  “The finance team needs to continue to streamline financial reporting, providing real-time data that assists with commercial advantage by identifying opportunities and threats.”

Fullerton also acknowledges that a greater knowledge of IT is essential in the modern finance function. He believes that finance professionals must show a desire to adapt and continuously learn new skills while improving existing ones.

“This includes putting themselves in a position where they can challenge dated technology and suggest improvements,” he says.

He adds that the recent pandemic and increased remote working have called for a heightened understanding of information security and cybersecurity.

“As a digital business incepted in 2014, digitisation has always been part of our DNA,” says Suzuki. “Everybody in the CFO team needs to be comfortable with complex data models. Spreadsheets are of the 1990s – today, I want my team to understand and design analysis in Tableau or similar tools. We are moving from static analysis to real-time models.”

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