There’s no doubt finance leaders have had to adapt to change during the last year at a faster pace than many thought possible before the COVID-19 pandemic. The latest survey of global chief financial officers, conducted by the Association of Chartered Certified Accountants (ACCA) in partnership with PwC, tracked the shifting landscape for finance functions around the world. Asked about key changes from the pandemic, participants—including 99 Canadian CFOs—cited remote working (64%), technologies used (55%) and the mix of skills needed (37%) as areas where they expect to see particularly long-lasting impacts.
Which of these aspects of the finance function do you think will be permanently impacted by the lessons learned from the pandemic?
The survey found many Canadian CFOs are embracing the possibilities created by the latest wave of change. They have big plans, for example, to do more across the technology spectrum after the pandemic, with cyber risk, scenario modelling and cloud-based solutions topping the list of their investment priorities. Robotic process automation is becoming table stakes for finance functions. Many are also focusing on increasing their data analytics capabilities by upgrading to cloud-based enterprise resource planning (ERP) solutions. Other CFOs, who may not be ready for a large-scale ERP upgrade, are adopting more accessible data visualization and analysis tools.
But as the survey showed, the scale of change goes deeper than technology adoption or even addressing the long-standing need to deliver more insights to the business. The rise of environmental, social and governance (ESG) issues as a key factor in business performance, for example, requires a significant shift for finance teams. They’ll be critical players in helping their organizations assess where they stand on ESG matters, determine which aspects matter most to the business and link plans and actions to long-term strategies. They’ll need to do all of this while navigating constantly changing frameworks and standards and helping their organizations increase trust in their ESG metrics through proper governance practices.
All of this adds up to higher expectations for CFOs and the finance functions they lead. We’ve been talking for some time about how rising expectations are putting pressure on finance functions, but the survey shows how this has accelerated even further during the pandemic.
While this is a challenge, it can also be a good thing. As the ACCA/PwC report suggests, the uncertain environment during the pandemic has elevated the role of finance teams, with some organizations giving greater prominence to baseline measures like cash-flow analysis, revenue forecasts and budgeting and others looking for more strategic insights based on a range of potential scenarios. This has made the finance function even more relevant to the businesses they serve, with a large number of Canadian CFO respondents (37%) saying they’ve been able to capitalize on opportunities created during the pandemic to increase the influence of their teams.
Many CFOs will welcome this elevated role, but it’s likely a strain for their finance teams. As the survey showed, they’re now facing not only rising demands for up-to-date insights but also an increased compliance burden to ensure operational resilience and even more pressures around transaction processing and efficiency. Canadian CFOs participating in our survey made it clear they can see the strain, with large numbers citing mental health of the workforce as a key issue.
The good news is this changing environment offers many opportunities for finance leaders. In many ways, this is their moment to play the more strategic role many have been looking to have. But as the report suggests, navigating this shift will require finance functions to be more effective and efficient in how they operate. Now more than ever, they’ll need to embrace operating model changes focused on new ways of working, new technologies and the power of data to drive better processes and insights.
While the survey showed change has accelerated in some areas of the finance function because of the pandemic, the responses also suggested there’s room to do more. While a large number (29%) said they’ve made changes in response to the pandemic that they expect to continue, others have had a different experience. Only 6% said they’ve accelerated previously planned changes, while 25% have slowed them down.
25% of Canadian CFOs say finance function changes planned prior to the pandemic have now slowed down.
While the survey shows some Canadian CFOs may be hesitant to proceed with changes to their finance functions, the findings only highlight the benefits of finance transformation. With a shifting business environment creating even more demands on the finance function, CFOs have an opportunity to meet these rising expectations by accelerating efforts to harness the power of their people and transform processes to drive performance excellence.
It’s both an exciting and challenging time for finance leaders, and I invite you to explore the opportunities ahead in further detail by reading the ACCA/PwC CFO survey report. And please stay tuned for further perspectives on the changing landscape for Canadian CFOs in the coming months.
National Assurance Markets Lead, Future of Finance Leader, Partner, PwC Canada
Tel: +1 905 815 6432