Evolving Role of CFO in the Post-Pandemic, Inflation-Impacted Business Climate

Fatihah Ramzi, DigitalCFO Asia | 3 October 2022

Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications

In the post-pandemic environment, the chief financial officer’s position is evolving. Without a doubt, COVID-19 has altered how the finance office operates. The pandemic unveiled a new normal in which business conditions change on a daily basis and the CFO’s office is moving toward a more immediate and proactive emphasis. The standard operating procedure, which included monthly, quarterly, and annual planning processes, has been completely altered.

CFOs must now be completely flexible and able to respond quickly to developments in the company. Ultimately, they must look forward, make predictions about what will happen, and guide their companies in the proper direction. The necessity for the CFO to have visibility of the day-to-day operations of the organization and to assume a strategic role in leading those operations will not go away. In fact, the CFO’s function may be expanding even further in the wake of the post-pandemic boom as businesses rely on their knowledge to maximize their recovery.

To find out more about a CFOs role in the post-pandemic and inflation-impacted business landscape, DigitalCFO Asia spoke with Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications.

Key Challenges For CFOs In The Post-pandemic Landscape

1. Preserving Human Capital 

The pandemic has altered workplace dynamics, with many employees now experiencing telecommuting and working from home for the first time. Changes in the wants and views of employees have coincided with changes in workplace culture. With this development, the organization’s capacity to increase employee retention is also reliant on its capacity to meet changing employee demands, whether through competitive pay or a commitment to a healthy work-life balance.

Be receptive to hearing about the requirements of every one of your employees and exploring how you two may collaborate to meet those needs. Flexibility is essential. Whether it’s implementing work-from-home options or reorganizing internal procedures, it’s critical to modify current working procedures to meet the shifting needs of your team and boost job satisfaction.

“The pandemic has shown us that any job (in the corporate world) can be done from anywhere in the world,” says Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications.

2. Too Much Focus On Long Term Plans 

There has never been a better time for CFOs to position the finance function as a driving force for transformation and a source of competitive advantage. They also highlight a glaring perception gap that needs to be closed if CFOs are to dismantle silos and promote the mindset required to be successful in this role.

Despite CFOs’ beliefs that they are starting to generate financial value through unconventional duties, it is nevertheless evident that the majority of their time is still spent on conventional ideas. When the pandemic has demonstrated that long-term plans are ineffective in the face of challenges and disruptions, many CFOs decide to revert their concentration on them now that the pandemic is settling down.

According to Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications, “CFOs need to be very choiceful on the metrics that matter.”

It is important that CFOs prioritise and focus on the goals and objectives that are important in sustaining the business and ensuring recovery. Out of the 20 metrics that they have on the list, about 2 or 3 are the most important ones and it is crucial that CFOs are able to pinpoint those priorities and start curating plans to achieve them. 

Staying Ahead Of Inflation

Inflation makes planning and investment decisions harder, and at a macro level, it may be associated with recessionary tendencies in an economy, leading to cutbacks in consumer spending. When this happens businesses need to be smarter in where they spend their money as such decisions could cause detrimental losses for the company especially during periods of high inflation. 

In light of an inflation-impacted business climate, Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications, says that “We should continuously look at every cost. If the cost is not adding value to our customers then that cost is simply not a value-add and has to be eliminated.” 

A corporation will need to look for alternative strategies if its existing cost-cutting efforts are insufficiently successful. Despite the fact that businesses may not be able to compete on price, they can still attract customers by providing other added value that they are prepared to pay for. Offering a special experience that your rivals can’t match is one method to create value. Make sure the target market will find it appealing and that it will encourage them to choose your company over competitors.

Managing Growth Ambitions As A CFO

Viruses, emerging technologies, and upstart competitors are just a few examples of disruptions. Change is the unifying denominator among them, and this change can have an impact on a strategy’s foundation and viability. A company’s service objective may not change, but its particular plans for achieving that mission should be changed frequently to take into account new opportunities.

Against the backdrop of any significant disruption – product, supply, distribution, marketing, and infrastructure requirements could all change quickly, making this the optimum time to examine business models and prioritize any required reforms. These developments typically come as a surprise, necessitating quick decision-making with little information.

“CFOs need to start getting comfortable with the uncomfortable. They need to start making decisions with less information and less time,” says Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications.

The organizations that establish this normality at the top will endure in the current environment. If you can read uncertainty in a competitive environment better than your rivals, you will be able to advance your business initiatives. Executives frequently ask for the worst-case scenario in these uncertain times and want to quantify it. This demonstrates a level of preparedness especially when they are able to draw a line and see that the company can afford that worst-case situation. If CFOs want to have their business successfully weathering any disruptive period, simply being aware of their priorities and key strategies to navigate these trying times will get them there.