The role of finance professionals has been evolving for a while as the industry responds to digitalization. COVID-19, without a doubt, has been a catalyst to accelerate some of those changes, and as a result, many professionals today have seen their roles rewritten. This was duly reflected during the CPA Conference 2021 titled: “Transcending Together.”
Panellists and speakers from a range of industries came together to discuss how the finance function has transformed from being a back-office support function to earning a seat at the table as a business-facing function that supports and enables decision-making. Furthermore, they discussed the new environment that is driving an evolution in the roles and skill sets that are required for future accounting and finance professionals.
From left: Keith Chan CPA, Chief Financial and Technology Officer of McDonald’s Hong Kong; Anthony Lin FCPA, Financial Controller of Gammon Construction; and Francis Fong, Honorary President of the Hong Kong Information Technology Federation.
Future of the finance function
Taking part in the third panel, which was moderated by Francis Fong, Honorary President of the Hong Kong Information Technology Federation, were Keith Chan CPA, Chief Financial and Technology Officer of McDonald’s Hong Kong and Anthony Lin FCPA, Financial Controller of Gammon Construction.
Fong opened the discussion by asking the panellists to share their thoughts on what they think were some of the biggest changes that resulted from COVID-19. Both panellists highlighted that their roles as finance professionals have fundamentally changed, and that these changes are not temporary, but are for good. “In the past, we were like historians; we looked at what happened and made recommendations, but now, we are forward-looking. We now help businesses to make forward-looking decisions to better prepare them to move their businesses ahead,” Lin said.
Indeed, one of the key points that Chan highlighted was the fact that digital transformation has given finance professionals much greater depth and insight because of the amount of data it has procured. Turning to McDonald’s as an example, he said that the company serves more than one million guests per day, hence accumulating sizable amount of data across its business. “Because this data translates into insights, we know exactly what to anticipate and we have the speed to get insight. We can then be actionable especially if you analyse the data well. This helps us to anticipate and have the agility to deal with any changes. This is how we have gone from having hindsight to having foresight.”
“A quick win only happens when you can genuinely show how a technology or a new initiative helps with something. That’s the only way everyone will embrace it.”
In other words, the future for finance professionals will be more focused on data, analysis and making data-driven decisions. Moving forward, the fast adoption and evolution of technology and data will need to be married with human judgement in order to make any business decision, according to the panellists. “It’s not about ‘man versus machine,’ it’s about ‘man plus machine,’” said Chan.
As such, what are the new requirements and how can finance professionals advance their careers in this new normal? Fong asked.
The panellists first noted that there has to be a change in mindset and a need to accept that things have changed under the new normal. Resisting this inevitability, they added, will pose additional challenges. “Recognize that these trends are here to stay and that we won’t go back – so either we stay ahead, or you’re left behind. The world is not going to go back to the way it was. This is innovation by default,” Chan said.
Secondly, the panellists said that finance professionals can’t just see themselves as number crunchers anymore and have to embrace roles such as performing analyses and communicating recommendations. “In the past, the finance function in my company was 70 percent transactional accounting and 30 percent advisory, but it’s now the other way around. We are used as a sounding board for making decisions,” Chan added.
As data and technology continue to play a bigger role, Lin said the third thing that finance professionals must embrace is the changing team structures within finance departments today. Rather than simply having finance professionals on a team, other professionals and experts will also make up the finance function. These could include IT professionals, engineers, data analytics experts and scientists.
“There is more data, more IT and engineering and you are partnering more with businesses,” Lin said. “You have to use the numbers and data to tell a story and explain a situation that will lead to a major decision being made, so our roles have a lot more dimension to it today.”
“You have to use the numbers and data to tell a story and explain a situation that will lead to a major decision being made, so our roles have a lot more dimension to it today.”
Knowing this, Fong asked the panellists what the profession needs to do to better prepare for these changes. They responded that change management should come from the top down, and boils down to how you can inspire and influence your people. “Change management must start with the leadership team, and there has to be buy-in at that level. A quick win only happens when you can genuinely show how a technology or a new initiative helps with something. That’s the only way everyone will embrace it,” Chan said.
Turning to the data journey, Chan also suggested that finance professionals consider adopting what he calls the four stages of data usage. “We can summarize it into: the two Ds and two Ps,” he said.
The first “D” is data, which Chan said should be descriptive enough to explain what has happened and what a situation has evolved into. The second “D” is diagnostic analytics, which is used to explain why something has happened. “If you are able to answer this, you’re already one step ahead,” he added.
Moving on to the Ps, the first “P” is predictive analysis, which allows you to make an educated guess about what will happen, and the second “P,” which is prescriptive analysis, uses artificial intelligence to explain what data and areas you can improve upon and make something happen. “At the end of the day, the most important thing you have to show is how something adds value,” Lin said. “Not only do you have to help solve a problem, but you also have to demonstrate the added value and given purpose to get buy-in.”
From left: Teddy Liu CPA (practising), Member of the People Development Management Committee of The Hong Kong Management Association; Kit Wong CPA, Director of Education and Training with the Hong Kong Institute of CPAs; Louisa Yeung FCPA, Chief Executive Officer of KOS Group; Yan Yeung CPA, Partner of Tax Services at PwC Hong Kong; and Adam Wong CPA, Audit Director at EY and a member of the Institute’s Young Members Committee
Skills evolution and the pathway forward
Given these changes to finance and accounting roles, what kinds of skill sets and manpower are required in the profession moving forward?
This was aptly answered during the final discussion of the conference, which was moderated by Adam Wong CPA, Audit Director at EY and a member of the Institute’s Young Members Committee. He hosted a lively and informative discussion with Teddy Liu CPA (practising), Member of the People Development Management Committee of The Hong Kong Management Association, Kit Wong CPA, Director of Education and Training with the Hong Kong Institute of CPAs, Louisa Yeung FCPA, Chief Executive Officer of KOS Group and Yan Yeung CPA, Partner of Tax Services at PwC Hong Kong.
“In our company, we really promote digital skills among our colleagues,” said Yan Yeung. “By default, you have to have technical knowledge, and we actually encourage our colleagues to use programming or coding to improve their own workflow, as this can really help them with their work and efficiency.”
However, embracing technology alone isn’t enough; adaptability is also key. In fact, when Adam Wong asked the panellists what they thought was a key quality that finance professionals today should have, the resounding answer was the ability to adapt.
“These are moments when you realize the external environment has changed so much, that you need to adapt and take quick action. You need to be sensitive to the environment in which you’re working in.”
Kit Wong mentioned how the Institute had to figure out how to safely roll out their examinations during COVID-19. “We had to change the whole way that we did things, and we really had to adapt,” he said.
He was not alone in sharing this sentiment. Almost all the panellists experienced drastic changes to the way their companies operated during the pandemic. Louisa Yeung noted how she was no longer able to travel to her offices in Mainland China and ended up having to delegate a lot of responsibility to her staff in those offices. For Yan Yeung, the entire workflow in PwC’s offices had to change. “These are moments when you realize the external environment has changed so much, that you need to adapt and take quick action. You need to be sensitive to the environment in which you’re working in,” she said.
However, there were also some benefits to the disruption. Louisa Yeung said the company was forced to adapt to the situation rather than shy away from its challenges, leading them to still achieve good results. “We had to delegate a lot of responsibility to the more junior staff, so they really had to take ownership and mature in their roles,” she said. “As a result, in the last 20 months, the crisis forced them to grow up a lot. We were even more efficient afterwards; our business was booming and our staff had upskilled and improved, so it’s been an overall positive experience.”
Of course, change and adaptability comes from having strong communication lines, the panellists went on to say. “When we realized we had to adapt to the situation, we had to communicate a lot more,” said Kit Wong.
In order to get buy-in, every decision was consultative in nature. By engaging and communicating with various stakeholders – from management, to examiners, and down to students – the Institute was able to eventually roll out the exams smoothly. “When you launch something new, stakeholders are much more willing to try it if they were part of the process of coming up with the idea,” he said.
“It’s not that people are born successful, but successful people can overcome hurdles and challenges because they have a growth mindset.”
In fact, communication has become such an important quality that it’s often cited together along with being agile as some of the core competencies that companies are looking for in new hires, Yan Yeung said. Adam Wong agreed, further adding that in order for companies to reach their targets, they have to be able to communicate their plans. Only when everyone is aligned towards a goal can a company achieve anything.
Liu chimed in, agreeing that having a clear purpose and communicating that purpose is equally important. “Make sure everyone is clear on this point. They have to see that the company is also fighting for them. It’s not always about profit, but it’s also about purpose and the people,” he added.
Indeed, the idea that purpose, and environmental, social and governance initiatives are key to attracting talent and retaining them was another resounding theme during the panel discussion. “Young people want to try different careers because they are looking for purpose; they move around to try things to see what suits them,” Adam Wong said.
Louisa Yeung agreed, adding that: “They are not just looking for money; they want to see that a company is contributing to society and what their values are. They want to see tangible meaning in what they do and learn something.”
In fact, this desire to grow and learn is another key quality that companies are looking for in employees today. On this note, Kit Wong emphasized the importance of having a growth mindset. “It’s not that people are born successful, but successful people can overcome hurdles and challenges because they have a growth mindset,” he said. “Of course they are hardworking too, but they have the mindset to push forward, and this is what is needed in this day and age.”
Kit Wong also said he has noticed a change even in the profession’s expectations of its people. He noted that during the CPA exams, they have had to reform exam materials so that they are not just focused on technical skills, and they also have assessment centres to assess professionals’ skills in critical analysis, problem-solving, communication skills, as well as analysis, leadership and business acumen. “That only makes sense,” said Liu. “You can only make an impact if you can communicate, tell a story. And a number can only tell the story if you are a good accountant.”
A social purpose positioned for a better future
Businesses today face the momentous task of having to balance profits, build trust with their stakeholders, while doing good in society. This was the key message delivered by former senior civil servant and government official John Tsang at the CPA Conference 2021.
According to Tsang (pictured above), who was the longest serving financial secretary for Hong Kong and is the Founder of non-profit organization Esperanza, the global environment has changed significantly, and businesses and governments are being held accountable to everything that they do.
“It isn’t just about profit anymore; employees and customers all have an active participation in your business, and they hold institutions to a higher standard,” he said. There is also growing expectation that companies have a strong social purpose that aims to do good for society.
Indeed, Tsang said that corporate social responsibility is no longer something “nice-to-have” but key to a company’s long-term survival. Quoting the 2020 Edelman Trust Barometer, he noted that the study revealed that distrust in governments, businesses, non-governmental organizations and media is at its highest today.
While the cause of this fear is largely because of uncertainties surrounding an unpredictable future, he says it is a wake-up call for businesses to start thinking about how they can effectively rebuild trust. “How can institutions strike a balance and change the environment in which they are operating in, so that they can rebuild that trust in themselves and in society?” he asked.
“The good news is that it’s not mission impossible,” he then said. However, what is required is a change in mindset around social purpose, which, he said, should be the first step. Next, he advised institutions to communicate a clear purpose and mission statement to stakeholders, and then make a consistent delivery on those promises. “If the public can see that what you are doing is going to make the world a better place for future generations, you can win their trust. This is the way businesses are going to have to do things moving forward,” he said.