In SEA, the concern over the pace of change in the business environment is more acute than the rest of Asia-Pacific. Nearly half (46%) of CFOs and direct reports in SEA report that their biggest challenge is managing unexpected changes to financial forecasts. This figure is closely aligned with the global average of 41%, but higher than the regional average elsewhere in Asia-Pacific (30%).
Finance executives in SEA are aware of their strategic mandate, to steer the business in a rapidly evolving environment—top challenges they cite are identifying how to align strategic, financial and operational plans towards common objectives (38%) and meaningfully analysing data generated across business units and/or regions to develop effective cost containment strategies (40%).
Nearly half (46%) of CFOs and direct reports in SEA report that their biggest challenge is managing unexpected changes to financial forecasts. This figure is closely aligned with the global average of 41%, but higher than the regional average elsewhere in Asia-Pacific (30%).
But a limited understanding of valuable information available in other functions is impeding their attempt to steer the business through more and better collaboration with other business functions. This is similar to their counterparts in India but is a greater concern in SEA than on average globally (28% in SEA v 18% globally).
Building on a foundation of collaboration
The seeds for a collaborative approach to steering the business have been sown. The most frequently used strategy for managing expenditure is negotiating savings on contracts with existing suppliers, a more collaborative approach than just switching to new and cheaper suppliers. This is also the top activity finance executives in SEA are currently involved in with the procurement and supply-chain function.
Working together with different functions therefore provides a better understanding of the business, including intransigent and recurring costs, they say. But more importantly, it provides finance executives with the ability to drive operational decisions that will ultimately improve cost and risk management.
To achieve integrated risk management, SEA CFOs and their direct reports believe managing risks associated with outsourced processes is the most important activity to collaborate on.
To achieve integrated risk management, SEA CFOs and their direct reports believe managing risks associated with outsourced processes is the most important activity to collaborate on. To reinforce these efforts, they want more involvement in vendor selection strategies and fraud/corruption detection, management and prevention with procurement and supply chain.
Opportunities to steer the business
Beyond procurement and supply chain, finance executives have identified priorities for greater engagement with other key functions too.
One department with which there is a desire for more control is human resources. Although about only a third (36%) are currently involved in developing employee retention strategies, nearly two-thirds (60%) want more engagement on this front, higher than the Asia-Pacific average (52%). For conflict resolution management, only a fifth (20%) are currently involved but, again, nearly two- thirds (64%) want more involvement.
SEA’s finance executives lag behind their peers in Asia-Pacific in how much they anticipate the role of the CFO to be automated. Over the next five to ten years, 60% of respondents anticipate that 20-40% of this role will be automated; the same percentage across Asia-Pacific anticipate 30-50% to be automated.
However, this appetite for more involvement is not the same across all HR tasks. Nearly two-thirds (60%) say that they are currently involved in employee benefits and salary negotiation, but just above a quarter (28%) want more involvement. This snapshot suggests a desire among the SEA finance function to move away from the more traditional “facts and figures” HR interaction, towards greater involvement in issues-led tasks, which ultimately have an impact on spend management.
They are keen to drive broader operational decisions through collaboration with the operations function too, seeking greater involvement in facilitating the digitalisation of processes while also focusing on cyber-security risk analysis and strategies.
A spotlight on technology
Technical difficulties with digital systems for remote collaboration is among the top challenges for more and better collaboration, which some emerging technologies directly address. Respondents believe that cloud computing for remote access and real-time information-sharing technologies as having the most potential to enhance collaboration. The use of predictive analytics for strategy development and decision support is also a popular choice, which directly addresses the top challenge to manage unexpected changes to financial forecasts.
SEA’s finance executives have already embraced technology—among the top three strategies most frequently used to manage expenditure is automating activities to reduce costly errors. Despite this, they lag behind their peers in Asia-Pacific in how much they anticipate the role of the CFO to be automated. Over the next five to ten years, 60% of respondents anticipate that 20-40% of this role will be automated; the same percentage across Asia-Pacific anticipate 30-50% to be automated.
Should automation free up their time, CFOs and direct reports can spend more time driving strategic and operational decisions across key functions. More time does not automatically translate into more and better collaboration, however. CFOs and direct reports in SEA who want to steer the business towards its strategic objectives should ensure that any extra engagement opportunities are used to maximum effect.
