Time to go beyond numbers

One more traditional finance function has died in the bloodbath of the past few months.

The cause for its redundancy if not disappearance from the Indian corporate landscape is a chronic disease called stagnation. It is survived by a team of accountants who have become commodities with obsolete skills.

It was established with a one-size fits all design philosophy that was programmed to remain isolated from the larger business, operate in a silo and be internally focused. It was characterised by manual processes, fragmented independent systems and inaccessible data that served a useful purpose well before the information age era kicked in.

During its lifetime, it successfully served business in the capacity of a meticulous ‘bean-counter’ and a ‘watch dog’ to ensure conformance to stringent internal controls and regulatory compliance.

It will particularly be remembered as an accomplished ‘number cruncher’ that was remarkably good at providing bad news of past performance.

To its credit, it also helped businesses to overcome many crises over several decades, the last being the liquidity crisis of 2008 and the turbulent times that followed. But it has finally succumbed to prolonged illness.

Changing paradigm

Take a look at what’s happening around you. Finance’s traditional functions are increasingly being addressed by technology and third-party vendors.

Its focus has then shifted more on the strategic aspects while becoming big picture-oriented.

Today, those discharging the finance function are expected to work very closely with the larger business and playing an influential role in shaping its strategy in areas such as acquisitions, product expansion, pricing and market penetration.

As transactional work is increasingly getting automated or moving to shared service centres and third parties, decision support is becoming embedded within the main business and finance professionals are being forced to move away from a purely transactional to a business partnership role.

As a result, it has opened up new career paths and possibilities for the finance professional. These trajectories include:

The Chief Financial Officer moving into the role of Chief Operating Officer or the head of the Finance Discipline reporting to the latter;

Building specialist or soft skills to join the advisory team;

Combining financial skills and business acumen to take on an operational role;

Developing management skills and capitalising on technical background to manage finance shared service centres.

survival game

As Charles Darwin’s theory of evolution has shown, the species that best adapts to its environment is more likely to survive. Finance and accounting professionals will need to similarly adapt to the changing environment or face extinction.

Here is how they can adapt to improve their chances of survival.

Adopt a holistic approach and start looking at the bigger picture to drive the management’s strategic agenda.

Break out of your silo and network with non-finance groups to increase knowledge of the business and develop strong business acumen.

Improve skills such as leadership and change management, apart from analytical, problem solving and risk management skills to provide sound financial advice to managers.

Develop influencing , negotiating and communication skills to help build strong finance acumen for those outside of finance and make them appreciate the value finance can add in arriving at sound business decisions.

While technical accounting skills have never been lacking, adding a portfolio of soft skills and IT savviness are becoming vital for the finance professionals and the function.

Regarding soft skills, some key questions you need to ask are:

Do you demonstrate belief in, or commitment to, an idea through their communication style?

Do you have the ability to deliver difficult messages with an appropriate balance of assertiveness and sensitivity?

Do you demonstrate the ability to lead, or participate in, multi-disciplinary teams and communicate confidently at senior management levels?

Further, just as any finance professional needs to keep abreast of the latest developments in the accounting arena and related laws and regulations, leading employers now increasingly require them to be tech-savvy and contribute to remodelling business processes and systems.

The key questions you need to ask are:

Are you abreast of the latest technological developments in your sector and/or technology enabled solutions that could be leveraged to gain competitive advantage or drive efficiencies?

Do you have the ability to re-design processes with breadth/depth of knowledge about various IT platforms?

Can you converse effectively with IT experts on package utilisation and integration to core systems and functions?

Can you anticipate changes and use the knowledge of the business and operations to communicate potential compatibility, consistency and obsolescence issues?

Can you contribute to system design to ensure that IT controls are consistent with and/or are in compliance with internal controls and regulatory requirements?

There is a growing recognition of the need for finance and accounting professionals to complement their much valued and important technical accounting skills with soft and IT skills.

There is also a recognition that finance and accounting professionals need to integrate with the business functions across all levels to enable them to improve their contribution to the organisation and transition into a larger business partnering role.

So are you preparing for the end or a new beginning?

(The author is Vice President & Head-HR Business Transformation, Reliance Industries Ltd)

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