beyond bottom line - pwc...effective strategic finance through data-driven insights the finance...
TRANSCRIPT
Beyond bottom line: The role of CFOs and the
finance function in 2020
2 | PwC
In the era of technological innovation,
disruption is the new normal. The
disruption, however, isn’t limited to
ways of doing business or approaching
customers and markets. Functions and
jobs within organisations are being
disrupted too. Indeed, the role of the
finance function itself is being
reshaped.
“
Digitalisation in times of change
Technologies like AI, RPA and Cloud Computing are
redefining how a number of routine finance jobs have
been done in the past, driving efficiency and freeing up
more time for higher quality reporting and analysis. In
the future, the finance function will no longer just be the
gatekeeper but a strategic partner to the business
providing real time information and key market insights
to improve the quality of decision making.
Implementing a change of this magnitude is never easy.
Identifying the right solution is key as putting in place a
wrong solution can be extremely counterproductive.
Significant time and resources need to be invested
upfront to properly identify pain points, propose the right
solution, and ensure smooth implementation geared
towards the desired outcomes. Buy-in is needed from
the whole organisation and early stakeholder
management is critical.
Effective strategic finance through
data-driven insights
The finance function needs to move up the value chain
so that it can help shape, and reshape, the company’s
strategy. Traditionally, the finance function processes
data for transactions that has already taken place.
Being part of the company's strategy execution and
achieving operational efficiency is not good enough in
today's digital era.
CFOs need to move from reactive to being more
proactive. They need to digitise the work flow, alleviate
and upgrade the workforce to work on more value-
added areas. CFOs need to transform data into 'useful
information' in real time. Such information includes both
financial and non-financial information that is obtained
from internal and external sources.
The evolution of the CFO’s role in 2020
will be driven by four trends:
2
3
Over
60% of respondents see the potential in
data analytics, RPA, and AI in the
next 2 – 3 years for the treasury
function.
Bracing through FX risk
With the continued uncertainties, currency volatility will
remain high on both treasurers' and CFOs’ agendas.
With globalisation, currency risk management has
become both dynamic and complex. To manage
currency risk effectively, treasurers need to understand
changing supply chains, manufacturing locations and
customer power. Most often, inaccurate FX forecasting
is the root cause of FX gains and losses.
CFOs should provide treasurers the necessary support
to look at technology. Some treasuries have already
applied data analytics to FX forecasts and FX markets
and used robotic process automation to automate FX
execution and forecast consolidation. The next step for
more advanced treasuries is looking at layering
algorithmic trading into the execution and FX forecast
processes.
Managing growth in times of
uncertainty
Geopolitical risks, trade tensions, technological
developments, shifting demographic/customer
behaviours/preferences are presenting CFOs with
unprecedented challenges. At the same time, they still
need to strive for growth to create value for
shareholders.
In order to ensure profitability, CFOs need to
understand how the supply chains will be affected by
the changing geopolitical and trade environment. By
having a clear understanding, they will be able to work
with other departments to assess the impact on
profitability and revenue from the changes, and agree
on solutions to mitigate potential risks.
This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
© 2019 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal
entity. Please see www.pwc.com/structure for further details.
Kennedy Liu
Partner, Head of Capital Markets
and Accounting Advisory Services
PwC China
T: +852 2289 1881
Digitalisation is transforming the CFO role.
Just making sure the numbers in the ledger
are balanced is no longer enough. CFOs
must equip themselves with the right tools
and integrate the use of technologies and
mine data to deliver growth.
To know more about our services and how we can help you, please contact us.
Anuj Puri
Partner
Accounting Advisory Services
PwC Hong Kong
T: +852 2289 2705
Ian Farrar
Corporate Treasury Leader
PwC China
T: +852 2289 2313
Jonathan Chen
Accounting Advisory Services Leader
PwC China
T: +86 (21) 2323 3791
Yvonne Kam
Partner
Accounting Advisory Services
PwC China
T: +86 (21) 2323 3267
Simon Cheng
Partner
Accounting Advisory Services
PwC Hong Kong
T: +852 2289 1522
“
About PwC’s Capital Markets and Accounting Advisory Services:
We are a team of highly experienced professionals who provide independent and objective advice on
acquisitions, capital raising, IPO, divestiture, restructuring, and complex accounting and financial
reporting issues, turning financial and regulatory challenges into opportunities.
Together with the help of trusted advisers to assist in
making sound and timely decisions on investments,
financing and operations, and managing regulatory and
financial risks, CFOs will be able to lead their company
into the digital future with confidence.