Hitting The Reset Button: Embracing Change And Disruption
The pandemic presented a series of challenges that businesses have had to face in the current times. It has compelled organisations to re-invent themselves and become more open to new technologies, experimentation and quick shifts in crafting strategies.
Traditionally, the role of a CFO was restricted to the finance function, however over the last several months, it has become significantly more complex. They are now involved in efforts across business ranging from business resiliency, talent acquisition and planning for the future.
In a recently concluded roundtable organised by BW Businessworld with some of India’s top finance leaders across industries, a wide range of topics were discussed including the need to secure supply chains, cost-optimisation, digital transformation and the upcoming role of CFOs in the post-pandemic age.
More from less:
Deputy Group CFO/CFO of EROS International Media and EROS Now, Vijay Vaishnav mentioned that the last few quarters have been challenging and the focus has shifted to cost optimisation and rationalisation.
“In the last four quarters, we were keenly looking into the cost elements – cost optimisation, cost rationalisation to keep the P&L floating. Also, on the revenue-generating front, we tried to tap into new opportunities to exploit the inventory on new platforms and widen its reach,” said Vaishnav.
Vijay pointed out that the role of finance has rapidly evolved in the post-pandemic period as finance functions find themselves in a unique position to be at the heart of change across an organisation.
“The role of finance has evolved in the last 18 months, and now everyone is looking at finance functions to keep the cash flow healthy and floating. Revenue maximisation, cost optimisation has been the focus from the last 6 -7 quarters and this will have to continue for lifelong,” Vaishnav added
The need for innovative measures:
CFO at Indiamart, Prateek Chandra described the innovative measures which his business took to survive through the pandemic.
“The smaller businesses were hurt more due to the lockdown induced by the pandemic and the lesser financial strength to bear the loss of shutdown. 10 per cent of our customer base churned from our subscription due to the lockdown,” said Chandra.
Chandra described in length the measures which his company took to successfully tackle the challenges posed by the pandemic.
“Some of the initiatives we took included reworking the product’s pricing, shorter duration packages, lesser pricing packages and providing a series of payment options,” Chandra commented.
The time demanded a shift of operations to the digital.
“The entire effort was on how we can retain these customers. We moved from the physical servicing to the digital servicing and connects, and all these measures helped us to retrieve approximately 60 per cent customers in the subsequent quarters,” Chandra added.
Chandra is a firm believer in the fact that directly interacting with the customers is a must to acquire new customers.
“Unless you go and meet the customer and explain to them the benefits of coming online, they are not going to take the subscription. As a result, in the pre-pandemic scenario, we operated a sales team of 2000 to interact with the customers on the ground level,” said Chandra.
Transforming the finance function:
Director, Sales, India at SAP Concur, Vivek Ganesh sounded optimistic about the future and stated that the sentiments are now upwards. The CFOs are now driving the digital-first approach which has resulted in new challenges and opportunities.
“The biggest challenge which the CFOs will face in the upcoming years will be fulfilling the requirements of the business leaders who are accelerating growth. The role of the CFOs is going to be so important that they will be taking on a pseudo CEO role in terms of ensuring financial transformation,” Ganesh commented.
Additionally, CFOs will ensure that the other processes go on smoothly too.
“CFOs will also have to focus on increasing efficiency, boost business performance and focus on growth. They are currently actively working alongside CIOs and building a roadmap for the future,” Ganesh added.
Chief Financial Officer at India and Director on Board Persolkelly India, Sanjeev Jha candidly mentioned that the biggest transformation due to the pandemic is in the behaviour of the people.
“The biggest highlight of the pandemic was the change in the behaviour of people and the urgency and spirit which they had shown to come out with flying colours,” Jha commented.
No one thought that a series of tasks could be done on the online medium before the pandemic hit.
“It seemed impossible to do an audit report and several other tasks online, but now they have been successful in doing so,” added Jha.
The organisation needs to reset for rapid growth:
Chief Financial Officer at Wipro Enterprises, Raghavendran Swaminathan highlighted that a lot has changed in the past few years, especially, the speed of getting things done.
“Speed coupled with agility is going to be core for any organisation going into the future. Companies need to be much quicker in picking up trends or they will be fundamentally left behind, one cannot rest on their past laurels anymore,” said Swaminathan.
Swaminathan also underlined that the concept of thinking “long-term” is no more sustainable.
“We truly think that the long term is dead, you cannot be thinking many years ahead because you may not even have a business at that point in time. One needs to reorient their thinking process and focus on the disruption which is taking place today,” Swaminathan mentioned.
“We need to make big investments and be able to take more risks. Unless you place your bets on something, you are not going to get any kind of differentiation going forward,” added Swaminathan.
Potential of digital disruption:
Ganesh highlighted that CFOs have yet not utilised the full potential of disruptive technologies.
“The potential for digital disruption is enormous and research shows that more than 60 per cent of the CFOs are increasingly investing in technological innovations to remain competitive,” said Ganesh.
Digital tools are going to play a major role for financial leaders in the upcoming future.
“For finance leaders when it comes to digital tools, it is going to open up a significant opportunity in terms of their new product launches, customer experiences, employee experiences, and vendor experiences,” Ganesh commented.
Ganesh underlined three major aspects that will play a major role in the world of finance – Artificial Intelligence (AI), Data Management and ensuring a unified process within an organisation.
“Artificial Intelligence (AI) will provide greater visibility for cash flow, build better working capital for organisations, and help to make critical decisions. Data Management is required as dealing with data complexity will be difficult. Also, employees would like to work in an organisation where there is a unified process within the organisation,” explained Ganesh.
The future role of CFOs:
The Global Head of Finance/CFO at India Evalueserve, Deepak Batra commented that the role of a CFO is going to become much more important in the upcoming years.
“CFOs of today can easily take the responsibility of tomorrow’s CEOs. Pandemic has only speeded up the process, even if there was no pandemic; there was a natural progression in play,” said Batra.
“This is because of the evolution and journey of the CFOs in the last 20 years. As they used to say, CFOs are no more the bean counter, the definition has changed. Their role has now evolved to that of a strategic advisor. Many functions that are specialised roles like the risk officers, the compliance officers, the legal councils they are already reporting to the CFOs,” explained Batra.
In today’s date, CFOs retain a holistic view of an organisation.
“Imagine four horses are pulling a chariot in opposite directions that do not take any chariot or organisation in any direction. This is where the CFO comes into the picture, as they have a 360-degree view of the organisation. They know where the silos are, where do we need collaboration, how to combine synergies, causes of lower productivity and how to increase efficiencies,” said Batra.
Commenting on the future of CFO’s, Batra remarked, “Though they are not Chief Executive Officers they are indeed the Chief of the corporate staff or may be called so in future.”
The panellists concluded the roundtable by reaching the general agreement on the importance of cost-optimisation, accelerated digitalisation, automation and agility which will play a significant role in how things will shape up in the future.
