Article By Bhavik Vashi, Area Vice President, Asia, Anaplan | 20 June 2022
Many firms still sorting out their transformation journeys have been held back by their inability to effectively integrate data insights into strategy and operations.
It is astounding that despite ongoing inflationary concerns, supply chain insecurities and rapidly shifting consumer loyalties, Asia Pacific’s digital transformation has grown further at scale and pace since the pandemic first started. In fact, the Asian Development Bank has reported that intra-regional and merchandise trade is on the upswing, and digital services growth in the region has tripled to over USD 1.4 trillion since 2020.
Yet even as transformation continues to empower regional innovation and growth, many organizations across Asia Pacific are still attempting to make sense of the available emerging technologies and vast amounts of data generated as a result. While many businesses are prioritizing adoption of “data-driven models” or pushing to “embed data within every decision and process”, we also see many leaders forming their everyday decisions using outdated or partial data, and limited collaboration withtheir cross-functional partners and the broader value chain ecosystem. These discrepancies between Asia Pacific’s robust digital momentum, and the continued struggle to truly integrate data insights into strategy and operations, has held back the true growth potential of many companies still figuring out their transformation journeys.
An Emerging Beed Of tomorrow’s Finance Leaders
Such reality checks warrant a deeper look at Asia Pacific’s hotbed of evolving digitalization, including questioning the status quo that innovation is often the purview of IT-centric functions and departments. However, given that the finance function truly maintains oversight of performance across all segments of the business, the modern CFO has evolved into the executive that is truly responsible for successfully empowering a connected and data-driven organization. Unlike finance leaders of the past who were often seen as data collectors, using legacy IT and manual documentation and processes to decide yearly budgets, the new breed of CFOs is looking to work nimbly with timely, relevant data at their fingertips – a critical asset in Asia Pacific’s volatile economy. When CFOs evolve their function from keepers of records to orchestrators of analytics and business intelligence, it allows Finance and stakeholders from other functions to collaborate on shared decisions using integrated performance indicators across the business. The shared ownership and cross-functional visibility also provide an opportunity for Finance to truly be an innovation and value driver within an organization.
What has been termed “Extended Financial Planning and Analysis (xP&A)”, or “Connected Planning” in some circles, is perhaps the idealized representation of how today’s progressive finance leaders would love to drive inter-functional digital transformation, by continuously enabling the right data-driven decisions in real-time to anticipate ahead instead of reacting to market uncertainty, and systematically propel revenue, improve margins, optimize resources, and mitigate risks.
Understanding The New CFO’s Transformational Journey
While these concepts are steps in the right direction, there are also CFOs who find embarking on a transformational journey to be daunting. Fully embracing both internal and external data analysis, and consistently evaluating shifting scenarios can be a difficult task without open lines of communication and data sharing. When these limitations are unaddressed within an organization, uninformed decision-making and misalignment to organizational goals and targets is often the norm.
For finance leaders who are looking to leverage the xP&A or Connected Planning approach to become transformation leaders for their businesses, a robust foundation rooted in technology is required. Truly modern and mature financial planning will go well beyond automation and efficiency, with technology now advanced enough to support real-time data sharing, alignment with stakeholders for timely insights, enable machine learning-powered predictions, model “what-if” scenarios for contingencies, and so much more. Beyond adopting new technology, finance leaders must also be strong advocates for a corporate culture that embraces unpredictability and fosters trusted data-driven partnerships with other stakeholders across the value chain where everyone believes that collaboration and federated accountability will lead to accurate, confident decision-making.
Embracing And Adopting New Technology
Often, finance leaders might feel constrained within organizations that are afraid to take the leap and embrace new technology because the legacy systems “still work”. However, such mindsets stagnate the organization’s growth opportunities and the lack of agility to pivot during uncertainty could also jeopardize the company’s competitive position.
To circumvent this inertia, finance leaders need to balance this “case for change” with a deep understanding of their organization’s underlying risk profiles. Answering simple yet important questions like “Why the need for change”, “Why this technology specifically” and “Why change now” will help establish the purpose behind the transformation initiatives. This purpose must then be socialized and aligned across the organization, ideally with executive support, to help address natural resistance from those who are still doubtful about the positive correlation between potential business impact and driving change.
Finance leaders can also further manage their organizations’ risk profiles by leveraging new technology-led business models such as “software as a service”. Such business models allow organizations to put higher impact quick wins on the board early with lower costs and efforts, which will help to inspire buy-in and build momentum as the organization starts its transformation journey.
Maturing Into A Transformational CFO
Once a CFO has established and aligned the right processes and technologies with the various stakeholders, and when the people within the organization have been upskilled to collectively be invested in shared visibility, decision-making, accountability, and success, we are reaching the apex of a transformational CFO’s impact curve.
At this highest performing point of the CFO’s journey, where true connectivity and collaboration across the business are empowered with the concepts of xP&A and Connected Planning, finance leaders will be at their most evolved, bringing their organizations to a new era of decision-making that leads their business to the forefront of the market.
