The TOP 5 challenges facing CFOs

CFOs GRAPPLE WITH THESE TOP 5 CHALLENGES

Deloitte Africa’s new CFO Programme market lead Kevin Black explores the five key challenges CFOs need to think about in a changing world.

CFOs’ importance and prominence in business continues to grow, which means they have to think about so much more than they’ve had to before. We spoke to Deloitte’s new CFO Programme market lead Kevin Black to find out what the five top challenges are that finance professionals are currently faced with. “At the moment, we are encouraging finance professionals to think about finding new growth opportunities in a post-pandemic world, talent acquisition in a world where the way of work has been completely reimagined, further digitisation after a period of massive digital disruption, going beyond ESG and sustainability compliance, as well as continuous efficiency and finance transformation,” Kevin says.

1. Looking for new growth opportunities

In 2020, CFOs’ key focus was responding to the Covid-19 crisis, and in 2021 there was a shift towards recovering from the impact of the crisis. Now, CFOs are focusing on thriving and growing their businesses.

“In the current South African environment, riddled with disruption, insecurities and uncertainty, looking for growth is tougher,” Kevin explains. “While we’re seeing significant growth in developed economies, higher inflation and interest rates in a low growth economy like South Africa poses a challenge to finding growth opportunities.” Having said that, he still thinks there are significant growth opportunities in South Africa.

2. Acquiring new talent

Kevin further states that there’s a war for talent at the moment. “The northern hemisphere is experiencing the great resignation, where more people are resigning because they want to work differently. As a result, the gig economy in that hemisphere has taken off massively and corporates are struggling to bring new talent into their organisations.” With similar challenges on South Africa’s doorstep, organisations must consider what their business looks like and how they manage people who want to work differently. “New talent entering the market choose the organisations they want to work at based on the organisation’s culture, whether they will be working in the office, or whether they will have flexible hours,” Kevin says.

3. Digitising

A lot of businesses are talking about platform IT digitisation. And while Covid-19 has already forced a lot of organisations to rapidly adopt new technologies, now Kevin reveals that the big challenge for businesses is the move to cloud.

“When it comes to working remotely and using the likes of Zoom and Teams, businesses have seen significant cost savings with the move to technology,” he says. “But as we return somewhat to normal, face-to-face interactions with clients and stakeholders are becoming important again and it will be up to businesses to balance their stakeholder preferences.” He explains that CFOs have to consider how they move onto a cloud platform in a way that makes their customer experience even better. “They also have to consider what new markets, risk and cost optimisation will look like as they prepare their organisations for hybrid technology solutions.”

4. Prioritising sustainability and ESG

In the past, corporate South Africa has spoken a good game around ESG, and particularly sustainability, but it’s been small talk compared to the increasing importance of ESG globally at the moment. Because of this, Kevin says, how CFOs build sustainability and ESG into their businesses is going to be very important going forward. “In South Africa, for example, the issues around employment, pay gaps, and the impact businesses have on society is fundamentally important. CFOs have to make sure their businesses are helping South Africa with the massive challenges the country is facing.” He explains that people can’t keep on doing the same things and expect a different result. “So, the private sector has to work alongside the government and the public sector to fix some of the primary issues. Businesses have to step up and do what’s right because it makes good business sense, not just because it’s the right thing to do.”

5. Driving efficiency and finance transformation

Something that isn’t new to any finance professional, but should always remain in the top five things for them to think about, is how they drive efficiency in their organisations while still delivering value as a finance function to the business. “Part of this is managing risk strategically, whether it be cyber risks or operational risks. CFOs have to have their finger on the pulse,” Kevin says. This topic has sparked many conversations about what the role of the CFO in an organisation should actually look like, and what it should be, with suggestions like changing the title to “chief value officer” being brought up. According to Kevin, what the role ultimately comes down to is how CFOs marry their growth, ESG, digital, talent acquisition and transformation agendas. “They have to invest in growth while still managing optimisation and efficiency in the business, and at the same time create a culture where people want to work,” he concludes.l

Deloitte’s CFO Programme offers CFOs bold initiatives and insights for one of the toughest jobs in the world by bringing together a multidisciplinary team of leaders and subject matter specialists to help CFOs stay ahead in the face of growing challenges and demands. To find out more about this programme, contact Sonnika Greyling at sgreyling@deloitte.co.za