CFOs’ roles changing in new tech, economic environment

Companies call the custodians of their cash chief financial officers (CFOs). But CFOs’ roles are undergoing transformation. Such are the changes that experts believe that by 2019 India will have a new breed of CFOs.

The technology too is playing its role in the transformation. The most of CFO’s traditional functions and responsibilities are now being taken over by robots and automated systems, which are supported by artificial intelligence (AI). Also, a major chunk of CEO functions and parts of CTOresponsibilities are now being passed on to CFOs, concurred experts at a CFO Conclave here recently.

The role of CFOs has evolved from mere number guys to catalysts and strategists in their organisations. Today, they are increasingly being made responsible for business expansion, revenue push, employment and most importantly, creation of wealth, said Porus Doctor, CFO programme leader at Deloitte India.

Doctor said, “CFOs have to come out of their comfort zones and be mentors for their organisations. A CFO should play key role in shaping the future of the company and making the company future-ready.

“CEOs and CTOs are passing some of the critical responsibilities and roles to CFOs today. They need to understand the digital revolution and its potential ramifications to anticipate a trend accurately and manage effectively. It is important for them to be nimble-footed.”' He said for a CFO, it’s important to identify the skill sets required for the future and he should have a finance-talent strategy that supports the broader finance and corporate strategies of the company.

According to him, CFOs should play a vital role in ensuring the presence of robust talent base in the organization, ready to evolve with the changing needs. “A major chunk of traditional CFO functions can be automated while he would require some talent in his department to execute the rest of the job, so that he is free to get into high-value engagements for his company,’’ added Doctor.

Modern CFOs are expected to know stuff around cross-boarder deals, M&As, market expansions, industry-specific regulations, changing tax structures and all kinds statutory requirements. To meet these emerging challenges, the CFO community in particular and finance professionals in general need to undergo a comprehensive re-skilling, said Madhusudan Rao, chief convener, CII Karnataka panel on economic affairs, taxation and finance, also CFO at Ingersoll Rand.

Cognitive automation, supported by robotics and artificial intelligence, is increasingly getting into the finance departments of global enterprises. Entire functions around the management information systems (MIS) and creation of reports are already being handled by robots in certain companies.

For instance, Infosys generates some 30,000 invoices a month and it used to take months to complete the work. “Now a robot does it for us, in just six hours,’’ said Jayesh Sanghrajka, deputy CFO at Infosys. Most speakers at the CII-hosted CFO Conclave felt that GST was not a tax issue, but a serious technology and compliance issue that companies are still struggling to get it fixed.

However, Narendar Pani, economist at Indian Institute of Advanced Studies, said, “CFOs cannot focus entirely on strategy at a time when we have demonetisation and GST. There is pressure on the CFO to look at the immediate. Today there is so much discussion on demonetisation and GST that we have shifted our focus from the structural changes that have taken place in the Indian economy.’’

With two biggest back-to-back reforms, demonetisation and GST, the Indian economy is witnessing unrest and demanding high level of preparedness by organisations and government agencies to manage changes in the IT systems and the taxation process.