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SA CFOs rise to challenges posed by COVID-19


Johannesburg, 21 Aug 2020

Before COVID-19 (BC), the greatest challenge faced by financial decision-makers, including CFOs, was their increasing responsibility in the realm of business strategy. With the onslaught of the novel coronavirus pandemic, CFOs have found themselves having to deal with a whole new slew of complexities including the expanding security, compliance and governance challenges arising from a workforce that has largely moved off-site.

However, recent research conducted by Sage in South Africa – the first of its kind conducted by the global Sage group – indicates that local senior in-house financial decision-makers are not only rising to these challenges, but relishing them.

The research shows they are taking on roles far removed from their traditional financial management focus. For example, of the 311 senior financial decision-makers who responded to the survey, more than a quarter (27%) have embraced the responsibility of managing their organisation’s remote workforce.

Changes in the traditional role of the CFO is not new: for the past decade, the pace of digital transformation has wrought a host of new challenges for financial decision-makers. Because of their position as the custodian of their organisation’s data, CFOs have long been at the heart of efforts to harness emerging technologies in order to enable the real-time decision-making that could drive strategy.

At the same time, however, CFOs have had to balance this transformational thrust with their traditional responsibilities relating to governance, compliance and accountability.

But this does not seem to have bothered them. On the contrary, Sage’s "CFO 3.0 – Digital transformation beyond financial management” research report reveals that almost one in nine (87%) of the survey respondents claim to have more time and freedom to work with other C-suite executives such as the CEO and CIO to help enable digital transformation, shape business strategy and drive growth because of their increasing use of advanced and emerging financial management technology.

However, the challenges and complexities resulting from the pandemic, including expanding security and compliance mandates, and managing a remote workforce, have unleashed what is probably the fastest shift CFOs have ever encountered in their role and responsibilities. These have even pushed business strategy off the top of their list of focus areas.

Accelerated change

COVID-19 has fast-tracked digital transformation and intensified the challenges and opportunities facing CFOs, especially around governance, mobility and remote working, and cyber security.

Prior to the pandemic, the top concern for most CFOs was compliance with evolving and increasingly complex financial regulations and legislation. This complexity has only increased in the face of a remote workforce and an expanded and decentralised network increasing the risk of cyber attacks and employee non-compliance.

Now, the need to manage new data, technologies and stakeholder expectations has to be weighed against the need to ensure the accountability, transparency and productivity of their remote teams.

Interestingly, only 12% of the survey respondents find these challenges daunting. This could be because organisations that were already in the cloud and using financial management solutions have had an easier time of dealing with the changed COVID-19 landscape. Indeed, 90% of the respondents’ businesses have adopted emerging technologies in some form, and over half are implementing advanced or cutting-edge techniques.

Asked what their concerns were, the top five to emerge from the survey were more traditional challenges.

The majority (57%) listed the need to deal with changing stakeholder needs. Half of all respondents (50%) were also concerned about managing fraud and cyber security risk, as well as modernising business processes with technology.

A slightly small proportion of respondents (47%) stated they were concerned with managing team productivity remotely; while 43% said staying formed on changing regulatory requirements was an issue for them.

Some 44% of respondents reported having experienced moderate to strong growth in organisational performance over the past year despite the deepening of the country-wide recession as a result of COVID-19. Even more surprising, however, was the fact that 78% of respondents indicated they anticipated even further growth in the year ahead.

Most respondents also agreed that next-generation financial management solutions had been critical to their success.

This appears to indicate that with CFOs and other financial decision-makers freed from the shackles of number-crunching, data integration and reporting, they can turn their attention to modernising business processes. More importantly, it appears, they have embraced their new roles and challenges with enthusiasm and optimism.

To read more about the research, click here.

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