Archives For CFO

Jamie Lyon

By Jamie Lyon, head of corporate sector, ACCA

To my eternal dismay I don’t really get much time on the iPad these days. I don’t have to look far, however to find where it is – invariably it’s in the clutches of either my seven year old daughter (worrying), or my three year old boy (worrying, but for different reasons). Their relationship with this sort of technology however seems very intuitive, dare I say almost hardwired. Technology will be even more coded into their future daily existence, probably beyond the realms we can imagine right now. It’s fascinating to watch, and it’s an extraordinary time to be alive.

Today’s rate of advancement in technology is exponential but I can’t help but think the technology we are becoming accustomed to in our private lives isn’t quite reflected in our business lives. There is no greater example of this than what’s been happening (or not happening) in corporate finance organisations over the last decade or so. If the finance organisation is serious about driving value and supporting the business in its strategic imperatives, one of the things it has to get serious about is the technology it has at its disposal. I don’t, however, subscribe to the view that technology is the panacea to all of finance’s problems, the one-stop solution to deliver the sorts of financial and operational insights the business is crying out for… but it would be naïve to underplay its growing importance, particularly with the digitisation agenda.

So what’s stopping finance technology delivering on its promise? The obvious one is investment costs and multiple legacy ERP systems not being fit for purpose; too much manual workaround, too much time trying to get to the number rather than understanding and explaining to the business the implication of the number. Where we have seen investment in finance technology, typically the investment is focused on streamlining and driving down cost, rather than investing in the sorts of capabilities that are predictive and insightful. But there are arguably other issues too. Has finance shown the necessary finance leadership in the technology agenda? Does it truly understand and can it explain the business case for finance technology investment? Does a typical finance function “culture” present challenges to really embrace the opportunities that technology provides? Is it because finance is too risk averse? Why isn’t it adopting the cloud much? Is the payback on technology that creates insight rather than headcount reduction just too hard to quantify? Is it a capability issue with finance playing “catch up” on the skills it needs to make technology truly deliver?

Lots of questions, not many answers. We explore all of these issues and more in ACCA’s latest CFO report Is finance function technology delivering on its promise? 

I’ll leave with you a final thought – I think the corporate insight agenda offers CFOs and the finance organisation a great opportunity for internal influence and moving the dial on the corporate reputation of the finance department. I also think embracing and making the case for technology and tools is essential to achieving this. My observation is this: if finance doesn’t take this opportunity to lead the insight agenda, perhaps someone else will…

This blogpost first featured in CFO World, February 2014

Helen Brand video-8656

By Helen Brand OBE, Chief Executive, ACCA

The second ACCA and IMA CFO Month starts today, and this year we are focussing on all things digital.

Today we live in an era of ‘digital Darwinism’, a time where technology and society are evolving faster than many organisations can adapt to the changes. This is one of the many underlying factors that led to the demise of stores such as Blockbuster and Borders. Yet technological advances continue to drive economic growth.

As trusted advisers to business, accountants and finance professionals around the world are expected to lead, not follow. The profession has historically been quick to identify and then exploit the huge potential of emerging technologies – from the earliest known records of commerce, to the earliest commercial computer systems.

Accountants’ enthusiastic use of the first programmable computers and widespread adoption of the spreadsheet helped to turn accountancy into the profession it is today; embracing of emerging technologies will turn it into the profession it aspires to be tomorrow.

Many new technologies have the capacity to influence the future of business and the accountancy profession, over the next decade and beyond.

ACCA and IMA’s latest report Digital Darwinism: thriving in the face of technology change, focuses on 10 technology trends with the potential to reshape the profession and business landscape significantly. These are developments that will change the way people live and work, and responses to them will determine the future success of individuals, organisations, and even countries.

The 10 technology trends that will have the potential to significantly reshape the business and accountancy landscape are:

  1. mobile;
  2. big data;
  3. artificial intelligence and robotics;
  4. cyber security;
  5. educational;
  6. the cloud;
  7. payment systems;
  8. virtual and augmented reality;
  9. digital service delivery;
  10. social.

Over the coming weeks during CFO Month 2014 we will be looking at some of these trends in a little more detail. In the meantime, to find out more about the technology trends impacting on the accountancy profession, please read the full report.

Jamie Lyon

By Jamie Lyon, head of corporate sector, ACCA

There’s a new kid on the block for business service delivery and it could be a threat or a major opportunity for finance chiefs. We’re all pretty familiar now with the advent of finance shared services and outsourcing, but Global Business Services goes one step further, leveraging sourcing methodologies, organisation structures and operating locations to create a cross-functional business support operation across HR, IT, Finance, Procurement, delivered under one governance framework. In theory it should mean greater business efficiencies, better visibility on end-to-end processes across the organisation, better insight into organisational data, and greater organisation flexibility and scale. There are, however, few examples where all support functions are wrapped around this new delivery framework – it’s an aspiration rather than a reality for most right now, with some but not all of the “GBS” boxes ticked, and it could be that GBS is more of a marketing term to signify a major business transformation, when it reality what we’re talking about is still finance transformation for many….

So what’s the implication for CFOs of GBS aspirations?  There’s plenty of evidence that those organisations which have GBS aspirations are typically putting CFOs in charge. With functional silos broken down, and processes managed end to end, the real prize for the finance organisation is that they should have access to a scale and scope of corporate data being brought together that they have previously unknown. This enhanced data visibility across the organisation, combined with new technologies and business partnering capabilities could help finance chiefs deliver the sorts of insights that truly make a difference to the strategic direction of the organisation, or which impact directly on bottom line performance.

But do many CFOs care about GBS or indeed want ownership? Are some likely to see it as a major political headache, riddled with enormous organisational complexity and logistical challenges. Could GBS be seen as a significant diversion from all their other responsibilities? CFO’s don’t have to “own” GBS to get the potential benefits, and it can be someone else’s problem. Maybe it should not sit within the CFO domain at all, perhaps the CIO or indeed the COO is better placed to ensure it has an appropriate seat at the corporate table.

One final note – if GBS aspirations are realised, moving finance operations and finance “service delivery” into a cross-functional structure and reporting model is likely to impact on the skills needed; it will almost certainly impact the career paths that finance professionals have access to.  These are some of the issues we have been raising in ACCA’s latest report. Co-authored with Deborah Kops of Sourcing Change: Global Business Services – a game changer for finance? we explore some of the questions which aren’t necessarily being asked. GBS has enormous potential for many businesses, but there remain a lot of unanswered questions.

This blogpost was first featured on CFO World website, November 2013

Jamie Lyon
By Jamie Lyon, head of corporate sector, ACCA
What will the future career path of a CFO look like? It is common knowledge that the role has been evolving for some time. However, much less discussed is what the implication might be for ‘where’ the future talent pipeline of finance leaders would come from?

There are a number of huge issues likely to shape the debate. In some quarters, we have seen more CFOs come from non-traditional finance and accounting backgrounds, particularly those with banking and deal-making in their career history.

Then there are regional trends as to the likely backgrounds of CFOs. One could also ask if the changing footprint and focus of business operations (more on emerging markets / less on western mature markets) might raise the longer term possibility of an increase in Asia-based CFOs leading western organisations in the future.

There are also other significant factors shaping the talent equation. For instance, the growth in shared services, outsourcing and the increasing trend towards global business services may significantly change the geographic footprint of future finance talent pools.

Another question is whether technological changes would lead to exponential changes in the face of finance operations rendering traditional CFO / finance skills less relevant? One could also mull over whether finance functions are likely to reduce their headcount more generally and the finance talent pool shrinks as a result (the more for less idea)?

All of these things are quite possible, but I am bound to say that I still think there is a bright future for traditional finance and accounting training in the face of all these developments.

A core grounding in finance essentials is always likely to be beneficial, but also other attributes that can be gained through training towards a professional accounting qualification – a critical mind-set, being able to exercise professional judgement, and above all else the “independence” that finance professionals can bring to decision making that is enshrined in their training.

From me, these qualities should always stand the test of time. Do you agree/disagree?

This blogpost first appeared in CFO World, April 2013

By Barry Patton, finance director Ireland, Intel

The finance organisation at Intel is very much an influential finance operation in the sense that we report directly through the finance organisation to the CFO, and we have a key role to play in continuously challenging and helping drive value for the operations – so we are very business and operational impact focused. However, with the advent of our shared service operation, both transactional finance plus ‘higher value’ finance roles moved across.

From a retained finance function perspective this has created specific talent development challenges for us because many of our entry roles to develop our talent were lost, resulting in a retained finance organisation structure which had small numbers of finance personnel at more junior roles, small numbers at very senior roles, and too many roles in the middle – so essentially a circular shaped, rather than pyramid shaped organisational structure impacting on traditional career development paths. There may be very rational reasons why, from a cost and standardisation perspective, shared services makes sense, but it has development and succession implications for the retained finance team which are not always thought through.

Solutions – creating development paths in the retained function

  1. Carve out new roles to facilitate development. We have systematically carved out roles, creating for example two junior roles rather than one senior post. This starts to rebalance the retained finance organisational structure and open up more career paths but critically it also allows us to intervene at the junior level and give people opportunities to develop the skills they will need upwards – we can take them on the journey and these are skills you can’t learn coming straight in at a senior level. It’s cost neutral but of course there is a headcount implication and we get measured on both – so we have to make the case consistently.
  2. Support development opportunities through rigorous talent identification programmes. We have a talent identification process in place called ‘repeat high performers’ – each year one-fifth of our staff will be given this performance rating and if they meet this two years in a row, this categorises you as high potential which helps drive mobility because hiring managers become interested in you and from a corporate standpoint at a manager level it puts these individuals on everyone’s ‘radar’.
  3. Create influence in the business and maintain finance ‘connectivity’ by exporting finance talent. We try and give finance people business operational experience. This allows us to retain finance staff outside of the finance function so that if we have a major capability issue in the function we can reach back out to the business and bring people back. We also adopt the same approaches across our geographic regions, monitoring which finance people are where and fitting them into the overall succession planning cycle. This is also critical in creating a strong finance reputation within the business and ensuring we are truly connected to the operation.

This case study appeared in an ACCA report on Talent and capability in global finance functions. As part of ACCA’s qualitative research leading organisations shared their approaches.