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In a time of a complex and difficult macro-economic environment, key disruptors are transforming the world of work. To remain competitive, your organisation needs to respond actively to these mutations. This disruption is also a golden opportunity for your finance department to accelerate its changes. From a simple observer often operating post events, the finance function is now becoming a key business partner with a direct impact on strategic decision-making, acting as a true steerer of performance.
Chief Financial Officers (CFO) will be the maestros of this evolution. Relying on their collaboration with various stakeholders (CEO, COO, CIO, etc), monopolising their leadership, utilising the crucial pieces of information they have access to, following a pragmatic and strategic approach, they will lead the path toward the finance of tomorrow. They will be responsible to assess the risk and opportunities created by external drivers, to develop realistic scenarios and to trigger specific measures throughout the firm.
To succeed in this journey, your CFO will need to define a clear vision and strategy, to lead with people, to lead with process and to lead with performance.
At PwC, together with a passionate community of solvers, our goal is to be your trusted advisor and to help you in this fundamental transformation.
There is no one-size-fits-all answer to what the right starting point is in a finance transformation. The specific starting point will depend on the unique circumstances and needs of the company, as well as the goals and objectives of the transformation project.
The right starting point will require thorough planning and coordination to ensure that the project is successful.
The finance function is going through a paradigm shift moving from a reporting function, focusing mainly on past events and legal reporting, to a real strategic business partner position enabling business strategy and decision making.The chief financial officer (CFO) is enlarging his responsibility becoming the “Chief Performance Officer” (CPO)
The role of the CFO is indeed key. Relying on his deep understanding of the business, monopolising his leadership and collaborating efficiently with a wide range of stakeholders (CEO, COO, CIO, etc) the finance function should be an enabler of performance.
At PwC we can support CFOs to transform their finance functions. We help organisations to design together a customised transformation roadmap and develop the appropriate Target Operating Model (TOM) in order to convert successfully the strategy into operations. A good transformation will enable your organisation to make the best of new technologies and innovation, to optimise efficiency and to achieve significant cost savings.
People and culture play a critical role in a finance transformation project. This is because finance transformations often involve significant changes to the way that work is done, including the adoption of new technologies, processes, and systems.
This can be challenging for employees, who may be unsure of how to adapt to these changes and may be resistant to them. To ensure that the transformation is successful, it is important to focus on people and culture by involving employees in the planning and implementation process, providing training and support, and communicating regularly about the benefits of the transformation. This should be clearly defined in a change management strategy. This well help to build trust and buy-in among employees and make the transition to the new way of working smoother and more successful.
The scope of regulations that organisations must comply with is constantly increasing. It is the scope where the finance function must play a key role.
Indeed, whenever a new regulation is coming into force, whether related to accounting, tax or non-financial information (i.e. ESG), the first element that organisations should focus on is data gathering and data reporting.
By default, the CFO and the finance function occupy this unique position and set of skills to identify, capture and report the data.
We are seeing more and more that ESG permeates into finance functions of a business. In leading companies, finance teams have stepped up to play a critical role in an organisation's ESG journey, both in the reporting of the current carbon footprint and also in the decisions and scenarios needed to achieve ESG commitments. CFOs can play a key role in this transformation as they sit at the intersection of processes, data and systems used for internal and external reporting. The finance function also has unique expertise that enables it to deal with complex data collection, processes and reporting grant CFOs the position of non-financial reporting steerer. Thus , for the sustained success of an organisation, ESG needs to be part of all finance processes. At PwC we guide our clients to consider the broader landscape, in order to truly “future-proof” their business.
Pillar Two implementation will not impact Tax only. Many other departments like controllership and Financial Planning & Analysis will be involved. In the interim and upon enactment, companies will need to collect the proper data and build the proper model in order to report in compliance with the new requirements. One of the biggest challenges will be to be ready on time. This challenge will be even more relevant due to the fact that the scope of activities will be wide : understanding the data needed, assessing the current ecosystem capabilities, establishing processes and controls, upskilling resources, meeting stakeholders expectation…
At PwC Luxembourg, we guide organisations from compliance to reporting supported by a wide ecosystems technological alliances (XP&A systems) to guide you through this new challenge.
The complex market environment and the continuous need for growth requires a company to constantly steer potential business opportunities and/or disruptors that could impact the company’s position.
As a consequence, CFOs must develop the capacity to look forward and anticipate rather than adapt late. More than looking at actuals figures and producing the standard legal reporting, CFOs are looking for ways to enable data-driven decision making to support the business and to build the “what’s next”.
At PwC, we have developed partnerships with the best technological leaders providing with eXtended Planning & Analytics (XP&A) solutions that will enable you to perform your legal reporting (i.e. consolidation, statutory reporting), budgeting and forecasting and your non-financial reporting. Those solutions will enable insight and agility into your performance management, by visualising the right data, producing the right KPIs quickly, at the right time for the right decision makers.
Technology switch or upgrade remain among the most important triggers for transformation. However, for a technology-driven transformation project to be efficient, it should always embrace a holistic approach encompassing the different pillars of transformation: strategy, processes, people & organisation on top of technology (systems and data). Sound expertise and a diversified pool of talents will be the key to be able to “glue” the different pillars of transformation together. Additionally, there is usually not “one-size-fits-all” technology that will address all of your transformation needs. Having a clear view of your vision, needs and interdependencies of processes will help you to select the right solution.
At PwC we have developed strategic alliances with technology vendors that can address from the most standardised processes (ex: ERP, XP&A, TMS) to niche solutions (Non-financial reporting, Account Receivable Management) for your more specific needs.
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Data is redefining the role of CFOs: they are becoming strategic advisers, sparring partners, inventors and catalysts of innovation and growth at corporate level. They are responsible for business-critical data that can be analysed instantaneously, allowing extensive forecasts and simulations which open up huge opportunities for the finance function of the future. Now the finance function not only has to foresee financial data but non-financial data too. All of this needs to be based on an effective and efficient data management system.