Like many of you, I’m glad to begin a new year that holds the promise of better times ahead. While it remains a challenging period, the rollout of vaccines gives us plenty of reasons for optimism in 2021.
In my role at PwC Canada, I spend a lot of time talking to chief financial officers and audit committee members about their most pressing concerns. What are some of the issues I’ve been hearing about, and what does 2021 look like for Canadian CFOs?
After a year in which many companies spoke boldly about what they stood for, the focus on environmental, social and governance (ESG) matters will continue to grow in 2021.
Creating value for a broader group of stakeholders, including employees, customers and suppliers, while managing larger societal obligations matters more than ever. Investors are also demanding more as they prioritize ESG matters. The momentum continued to build late last year when eight leading Canadian pension funds came together to call on companies to adopt the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework to report relevant ESG data.
As ESG matters become a key part of business strategy, CFOs will need to look at the different implications for their organization, such as the impacts on supply chains. While CFOs can expect more pressure to improve transparency around ESG risks and trends, organizations that lead with purpose are seeing the benefits in many areas, including employee attraction and retention, customer loyalty and brand perception.
Finance functions are highly conducive to remote working, which has helped them navigate the sudden shifts brought on by the COVID-19 pandemic. With so much change thrust upon them in a short period of time, many CFOs are now thinking about what their workforce will look like after the pandemic subsides.
Remote work will likely be a significant feature of that future workforce, something many employees participating in our Canadian workforce of the future survey told us they’d like to continue. For CFOs looking at their own teams, they’ll need to think differently about how to access talent and build engagement and trust in virtual and hybrid working environments.
And with the rapid shift to a digital workplace, many CFOs will be thinking more holistically about the skills and tools they need to thrive, as well as the structure of their workforce. This opens up a fresh opportunity to look at how digitization of the finance function creates new possibilities around automation, developing centres of excellence and enhancing your data capabilities.
As customer needs and expectations continue to shift and organizations look for operating efficiencies, further investments in areas like data analytics, automation and cloud technologies will be critical to success in 2021. CFOs have an important role not only in supporting new digital relationships with customers and tapping into the data they’ll generate but also in navigating the transformation of enterprise resource planning (ERP) systems to the cloud. This includes the ongoing migration to SAP S4/HANA.
Going a little deeper on S4/HANA, SAP has set a deadline of 2027 for companies to migrate from their existing systems, which is leading many organizations to focus on their transition plans in 2021 as they prepare for the biggest change to the SAP platform in more than 20 years. While this is a requirement, it’s also a major investment that presents a significant opportunity to transform the business, including the finance function.
For CFOs planning for the transition, it will be critical to look at this as more than a technology migration. This is the time to improve your processes to work more effectively under your new system and create a data model that supports your digital enterprise. For the finance function itself, the transition is a great opportunity to streamline tax, internal controls and other compliance activities. This will free up your teams to focus on the forward-looking insights the business needs.
While these three topics hint at more change after so much disruption, we’ve already seen CFOs rise to the challenge of helping their organizations navigate uncertainty in 2020. For those looking for support with the challenges ahead, feel free to check out our resources on finance transformation, including our journey guide to help you think through your SAP S4/HANA migration. You can also contact me any time to discuss your needs as we look forward to new opportunities in 2021.
National Assurance Markets Lead, Future of Finance Leader, Partner, PwC Canada, PwC Canada
Tel: +1 905 815 6432
Partner, National Energy Leader, Alberta Energy & ESG Leader, PwC Canada
Tel: +1 403 781 1844