The Future CFO

Innovative new IT can boost the
CFO’s performance and results
THE CHIEF FINANCIAL OFFICER IS
NOT JUST A NUMBER CRUNCHER
SIX TECHNOLOGIES
CHANGING FINANCE
THE MAN WITH THE
DELL CHEQUE BOOK
Dell’s financial chief Tom Sweet
on the mega-merger with EMCA successful CFO supports the chief executive with company strategy
INSOMNIA TOP TEN
FOR SLEEPLESS CFOs
The key issues keeping leading
financial experts awake at night
03 05 06 14
THE FUTURE CFO
06 / 12 / 2016INDEPENDENT PUBLICATION BY #0422raconteur.net

I
f you want proof of how far the
role of chief financial officer or
CFO has evolved from number
cruncher to strategic adviser,
talk to a headhunter about the briefs
they get from chief executives.
“If you look at a job specification
from ten years ago, everything that
was on there then is still on there to-
day,” says Mark Freebairn, partner
and head of the financial manage-
ment practice at executive search
firm Odgers Berndtson. “But there
are two more pages that weren’t
there before and are there now.”
The pressure on companies to
innovate and compete in an in-
creasingly complex, fast-moving
and transparent world has led to
the chief financial officers of large
businesses becoming more in-
volved in driving the commercial
activities of their organisations.
So they are helping to improve the
business, manage margins, assess
potential new markets, make in-
vestment decisions and oversee
mergers and acquisitions.
These are activities that all con-
ceivably fall under the umbrella of
strategy and require chief financial
officers to possess a wide set of skills.
The scale to which the chief finan-
cial officer’s strategic remit has been
expanded is clear from the briefs
that Mr Freebairn gets, which often
request what is essentially a “mini
chief executive”. “CEOs say, ‘I need
a CFO who will second-guess me
because that will make my deci-
sion-making more robust. I need a
commercial equal in that role’.”
A good example of where the
chief executive and chief financial
officer make a strong commercial
team is FTSE 250 recruiter Hays.
“In big, complex businesses, what
tends to happen is that the CEO and
CFO roles become interchangea-
ble,” explains the company’s chief
financial officer Paul Venables.
“The consequence of that is as
the CFO you spend more time on
the operations of the business and
more time with the people. There-
fore you can influence strategy. At
Hays, we have two
executive direc-
tors and we look
after 33 different
countries between
us. As we oper-
ate a fast-paced
sales business, we
have to spend a lot
of time in those
countries.”
Mr Venables de-
scribes his job as
being akin to a
deputy chief ex-
ecutive role. He is
heavily involved
in strategic decisions, such as
whether the business should go
into a new market, open a new spe-
cialism or deploy its skilled staff
differently.
Sarah Willows, chief financial
officer and head of operations at
professional services giant KPMG,
says strategy is about how a busi-
ness allocates its resources. “The
CFO is incredibly involved in al-
locating resources,” she explains.
“They must also produce the evi-
dence to help the rest of the board
make decisions.”
Like Mr Venables, she emphasis-
es the need for a close partnership
with the chief executive. “The CEO
tends to focus on the opportunities
and the CFO more on the risk of
those opportunities. That’s a great
partnership as long as both do a lit-
tle of the other side. But it's difficult
to be the person who both brings
the opportunity and considers the
risk,” she says.
In her own role, Ms Willows has
responsibility for leading all KP-
MG’s non-client-facing operations
and making sure
they are as good as
they can be since
they represent part
of the firm’s “shop
window” to clients.
Her remit spans
facilities, finance,
human resources,
IT, knowledge, le-
gal, learning and
development,prop-
erty and procure-
ment. She is able
to manage such a
broad role because
she surrounds her-
self with “very good people who are
the experts in what they do”.
Adam Akbar, founding partner
of Bronzegate, an executive search
firm dedicated to finance lead-
ership, highlights how corporate
chief financial officers have become
change-agents since the financial
crisis struck. “Many are driving full-
scale transformation projects, while
all are improving business perfor-
mance through efficiency meas-
ures,” he says.
The chief financial officer’s
more prominent role in commer-
cial decision-making is reflected
by another notable trend, accord-
ing to Mr Akbar. That is chief ex-
ecutives preferring to hire chief
financial officers who have sector
expertise. “If you are a digital CEO
and you have a choice, you would
want a CFO who understands the
digital industry,” he says. “That’s
partly because they can hit the
ground running if they are from
the sector.”
The chief financial officer’s influ-
ence might have expanded, but to
what extent do they have a say in
the vision, which continues to be
the domain of the chief executive?
While Alistair Cox, Hays’ chief ex-
ecutive, takes the lead in setting
the company’s long-term vision, he
encourages other members of the
management board to express their
views and challenge his assump-
tions. “As well as shaping the deci-
sion, a great CEO helps to shape the
debate,” says Mr Venables.
Although chief financial officers
are increasingly expected to act
as strategic advisers, their tradi-
tional score-keeping role has not
fallen by the wayside. Nowadays
they are simply expected to fulfil
both functions. “You can expand
the role as much as you want, but
if the CFO does not guarantee the
financial information that the
business is using to run itself and
do its external reporting, they
will be a hopeless CFO,” Mr Free-
bairn concludes. “But if that’s all
they’re doing, they won’t be a good
CFO either.”
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No longer just a
number cruncher
A successful chief financial officer now has to support
the chief executive in developing company strategy
as well as taking care of finance
OVERVIEW
SALLY PERCY
Share this article online via
Raconteur.net
The chief financial
officers of large
businesses are
becoming more
involved in driving
the commercial
activities of their
organisations Bloomberg/GettyImages
DAN BARNES
Award-winning
business journalist,
he specialises in financial
technology, trading
and capital markets.
IAN FRASER
Author of Shredded:
Inside RBS, The Bank
That Broke Britain and
former business editor
at The Sunday Times
in Scotland.
CLARE GASCOIGNE
Formerly on the staff of
the Financial Times, she is
now a freelance journalist
specialising in City and
financial features.
ANTHONY HILTON
Author, journalist and
broadcaster, he is a former
City editor of The Times
and managing director of
The Evening Standard.
JAMESHURLEY
Enterprise editor at The
Times and award-winning
journalist, he was formerly
enterprise editor with the
Telegraph Media Group.
ROB LANGSTON
Editor of MENA Fund
Manager, the monthly
title for the Middle East
and North Africa asset
management industry.
SALLY PERCY
Freelance business and
financial journalist, she
is editor of The Treasurer
and former editor of
Accountancy magazine.
EDWIN SMITH
Writer and editor, he
contributes to publications
including The Guardian
and The Sunday Telegraph.
PUBLISHING MANAGER
Misha Jessel-Kenyon
RACONTEUR raconteur.net 03THE FUTURE CFO06 / 12 / 2016
THE FUTURE CFO
Hays chief finan-
cial officer Paul
Venables says the
chief executive
and CFO roles
tend to become
interchangeable in
big, complex firms

COMMERCIAL FEATURE
RACONTEUR raconteur.net 2XXXXxx xx xxxx
CFOs
TACKLE NEW
CHALLENGES
WITH THE
CLOUD
Chief financial officers face tough economic
and competitive challenges, but using the right
technology, they can get ahead of the game
C
FOs face a wide array of
challenges. On the economic
front they’re worried about
continued uncertainty, while in
politics they are confronting the
potential impacts of Brexit, the US
election result and geopolitics in
the Middle East.
More directly the digital economy
and technology innovation is creating
new competitive threats as well as
exciting opportunities. In addition,
the response of legislators worldwide
offers a constant challenge.
For many organisations it is
up to CFOs to respond to these
challenges, and they can only
succeed by making their companies
lean, agile and responsive.
Cloud computing is essential
here. A recent study by Frost &
Sullivan shows that more than two-
thirds of businesses using cloud
believe it has given them substantial
competitive advantage.
Now a daily reality in finance, the
cloud enables large companies to be as
nimble as smaller firms. Some 56 per
cent of businesses use the cloud for
some part of finance and accounting.
Equally, smallercompanies can gain
the flexibility and agility from cloud
to scale quickly without significant IT
resources and make a major impact.
“Smaller companies want to act big,
developing their product rapidly and
commercialising it quickly, globally,”
says Mark Woodhams, senior vice
president and managing director,
Europe, Middle East and Africa, at
cloud enterprise resource planning
software specialist NetSuite.
One such business is DWA Media,
a London-based media agency which
expanded rapidly into seven countries
and struggled to get the visibility and
control needed. After implementing
cloud technology, the CFO was able
to ditch the company’s mass of linked
spreadsheets and reduce financial
close from weeks to a day.
DWA worked with NetSuite to
unify its entire business on to a
single cloud platform and the agency
is continuing to grow rapidly around
the world.
The reality for many companies
attempting this with traditional
on-premise systems is that
software deployments are slow and
problematic. Such firms then end
up relying on spreadsheets instead,
risking many more errors and
providing little control or visibility.
Larger companies, attempting to
be agile and adapt to new business
models, often turn to substantial
technology deployments to help
manage the change.
But such systems can be a
barrier. Mr Woodhams says: “Large
businesses are often restricted by
systems that are high cost, take
months or years to roll out and are
impossible to upgrade. There is a risk
that the technology actually stops
them from effectively entering a
new business area or responding to
competitive threats.”
Smart enterprises turn to the
cloud and PageGroup is one such
firm. After growing organically for
40 years, this £1-billion turnover
recruitment specialist had multiple
accounting and business systems
worldwide. The set-up created a
headache for the finance team and
restricted the agility, scalability
and flexibility needed to enter new
markets, expand operations and
grow revenue.
PageGroup is now implementing a
single cloud system from NetSuite that
will allow it to manage critical business
processes better, including accounting,
global financial consolidation, reporting,
budgeting and analytics.
“We’re intent on simplifying and
modernising our global financial
system to better support our finance
team,ourrecruitmentconsultants,and
ultimately our clients and candidates,”
says Mark Hearn, group services
finance director at PageGroup. “We
recognised that only a cloud-based
system could achieve this for us.”
Such examples in both small and
large businesses demonstrate just how
the cloud is enabling CFOs to have the
agility, visibility and control they need.
And there is yet more potential
as cloud transformation enables
businesses to overturn their very
business model. “Services companies
are looking to create products and
product companies want to create
services,” says Mr Woodhams.
“Cloud software is enabling this
agility and change in a way that
traditional systems struggle with.”
Product companies are shifting
from selling one-off items to either
delivering added services such as
maintenance or creating recurring
subscription revenue. “Companies
such as Rolls-Royce no longer just
sell aircraft engines; they rent them
by the hour of flying time,” explains
Mr Woodhams. “Think of mobile
phones being given ‘free’ with line
rental or a monthly subscription for
disposable razors. It’s a whole new
way of selling products.”
These changes create complex
new financial demands around
invoicing, and recognising recurring
and service-based revenue. With
constantly evolving regulations
worldwide, a cloud-based system
gives the flexibility and continuous
functional updates to keep on top
of these complexities.
Likewise, services companies are
using the cloud to help sell products,
such as packaging their intellectual
property as a downloadable “how-
to” product, or offering a previously
one-off service on subscription with
recurring billing. The right cloud
software can help them process
the payments and handle new
legislation on revenue recognition.
There is no doubt that CFOs face
incredibly tough economic, political
and competitive challenges. The
difference now is that cloud
computing enables them to adapt
and grow when, where and as
quickly as they need to, while
maintaining proper control of their
finances and operations.
Indeed, CFOs’ common
conversation around cloud has
shifted away from simply cost-
savings to this ability to adapt and
grow, with proper visibility and
control, even overturning business
models in the process.
“For these businesses, using the
cloud means technology powers
growth rather than holding them
back,” says Mr Woodhams. “It is
enabling true agility, visibility and
control, so that they can operate
and adapt as they need.”
For CFOs, making the simple
transition to cloud computing is
essential for their business’s survival
and growth.
To find out more about NetSuite
and how it can help CFOs visit
www.netsuite.co.uk/cfo
The cloud is enabling CFOs to
have the agility, visibility and
control they need
COMMERCIAL FEATURE
ABOVE
Cloud events
attract finance
and business pro-
fessionals in their
hundreds
RIGHT
Mark Woodhams
Senior vice
president and
managing director
Europe, Middle
East and Africa
NetSuite
BELOW LEFT
PageGroup is
using cloud to
drive financial
transformation
THE FUTURE CFO raconteur.net04 RACONTEUR06 / 12 / 2016

INSOMNIA TOP TEN
IAN FRASER
01APPRENTICESHIP
LEVY
Many chief financial of-
ficers view the apprentice-
ship levy, which debuts
in April 2017, as an unfair
“payroll tax” that will have
dangerous unintended
consequences including
devaluing apprenticeships
and causing companies to
axe other forms of training.
Thelevy,designedtotackle
skills shortages and broad-
en young people’s careers,
will be paid by English
employers with payrolls of
more than £3 million and
charged at 0.5 per cent of
wage bills. However, the
government, after refusing
to delay the scheme, insists
employers too small to pay
the levy – around 98 per
cent of the total – will have
90 per cent of their training
costs paid for.
08OTHERS
LEAVE EU
If populist parties build
further support in France
or Italy, causing either
country to leave the EU,
it would lead to a full-on
banking crisis, accord-
ing to Financial Times
columnist Wolfgang
Münchau. He believes
such a move would trigger
the “biggest default in his-
tory”, as foreign holders of
Italian or French euro-de-
nominated debt would be
paid in the equivalents of
lira or French francs. How-
ever, these local curren-
cies would have sharply
devalued. Since banks are
not required to hold any
capital against sovereign
debt, the losses would
cause many continental
banks to go bust. “There
is a lot of German wealth
waiting to be defaulted
on,” said Münchau.
04DONALD TRUMP
President-elect Donald
Trump has confirmed
that, on becoming US
president in January, his
first act will be to tear up
the Trans-Pacific Part-
nership and instead pur-
sue bilateral trade agree-
ments with individual
Asian nations. This is bad
news for British export-
ers. Theresa May’s gov-
ernment is committed
to reaching post-Brexit
trade deals with countries
including China, India,
Australia and Japan. But
Mr Trump’s move puts a
spanner in the works as
it means these countries
will be preoccupied with
pursuing deals with the
United States. If Amer-
ica stops underwriting
global trade and military
security, as Mr Trump
has signalled, race-to-
the-bottom protectionism
not seen since the 1930s
could ensue.
02BREXIT
The UK’s decision to leave
the European Union is
expected to bring height-
ened complexity and costs
to corporates, as regu-
lation diverges between
countries, international
labour markets seize up
and export opportunities
evaporate. Politicians en-
tering Brexit negotiations
ought to be aware that
non-tariff barriers, in-
cluding regulation, matter
as much to businesses as
tariffs and migration, ac-
cording to Deloitte’s most
recent survey of chief fi-
nancial officers. Currency
volatility can be expected
to increase as Brexit talks
commence and intensify,
requiring finance chiefs
to learn better hedging
skills. Research from the
software company Oracle
suggests Brexit will put
chief financial officers
centre stage to help their
companies navigate pit-
falls and opportunities in
the post-Brexit world.
09STOCKMARKET
CRASH
Stockmarkets have per-
formed more strongly
than expected since the
Brexit vote, and Donald
Trump’s election victory
gave impetus to the Dow
Jones and other US indi-
ces, prompting them to
reach simultaneous re-
cord highs on November
22. Investors have been
cheered by the presi-
dent-elect’s determina-
tion to slash both taxes
and regulations, while
pumping billions into US
infrastructure. Markets
were further bolstered
by a massive transfer of
wealth from bonds into
equities, driven by infla-
tionary fears. However the
last time all four leading
US stockmarket indices
reached simultaneous re-
cord highs, on December
31, 1999, this presaged the
dotcom bust.
07INFLATION
The fall in sterling since
the EU referendum, plus
the oil price rebound, will
inevitably fuel UK infla-
tion, as the higher cost of
imports gets passed on to
consumers. The former
Sainsbury’s boss Justin
King recently warned
that supermarket pric-
es will rise by 5 per cent
over the next six months,
while the National Insti-
tute for Economic and So-
cial Research predicts 4
per cent inflation for next
year, ahead of the Bank
of England’s 2.7 per cent
forecast for the fourth
quarter of 2017. Higher in-
flation could lead to an in-
flationary spiral, in which
tit-for-tat inflationary
pressures on wages and
prices feed off and rein-
force each other.
05CYBER ATTACKS
Recent cyber attacks
on TalkTalk and Tesco
Bank have illustrated
the vulnerability of large
companies to hackers de-
termined to steal data,
syphon off customers’
cash and trash reputa-
tions. Chief financial of-
ficers have a pivotal role
to play in ensuring such
risks can be minimised
both by channelling in-
vestment into appropriate
cyber security, and foster-
ing a culture where infor-
mation security and data
management do not get
neglected. According to
EY’s The DNA of the CFO
report: “A data breach can
lead to a disastrous dom-
ino effect on enterprise
value. Therefore, it’s criti-
cal for CFOs to understand
the cyber security [and be]
prepared to respond to a
breach at any moment.”
03PENSIONS
The Pensions Regulator
recently said that, if he ig-
noreslegaldemandstoplug
the £571-million deficit in
the BHS pension scheme,
the company’s former own-
er Sir Philip Green could
have his yacht and other
assets seized by the courts.
Against this backdrop, one
in seven chief financial of-
ficers see defined benefit
pension schemes as one
of the biggest risks facing
their businesses, according
to a report by Hymans Rob-
ertson. The consultancy
says finance chiefs should
work alongside trustees to
cut back risk and prevent
deficits from widening.
It adds that some chief
financial officers are pur-
suing the more radical
solution of full buyouts of
their schemes, removing
them from their balance
sheets altogether.
10WEAKER UK
ECONOMY
The UK’s decision to quit
the EU is wreaking hav-
oc with public finances,
growth prospects, and the
plans of many chief finan-
cial officers. This became
clear when chancellor Phil-
ip Hammond admitted in
his autumn statement that
the UK faces entrenched
problems, including poor
productivity and an addi-
tional £122 billion of gov-
ernment borrowing. On
the same day, the Office
of Budget Responsibility
slashed 2017 growth fore-
casts from 2.2 per cent to
1.4 per cent, blaming weak-
er consumer demand and
higher inflation. Looking
forpositives,MrHammond
said: “That’s equivalent to
the IMF’s forecast for Ger-
many and higher than the
forecast for many of our
European neighbours, in-
cluding France and Italy.”
06BORROWING
COSTS
After slashing UK inter-
est rates to a record low of
0.25 per cent in August,
the Bank of England has
since held them steady
as the post-Brexit vote
Armageddon scenari-
os failed to materialise.
Nearly three quarters of
chief financial officers
now expect UK rates to
stay at or below this level
for 12 months, according
Deloitte’s research. But,
if sterling were to plunge
or UK inflation to spike,
interest rates could rise
dramatically, in line with
what some forecasters
are predicting for Donald
Trump’s US. Were that to
happen, in a worst-case
scenario, it could lead to
swathes of personal and
corporate bankruptcies.
Top issues keeping
CFOs awake at night
Being responsible for an organisation’s finances is stressful
enough, but there are a number of issues which may cause chief
financial officers to lose sleep
RACONTEUR raconteur.net 05THE FUTURE CEO01 / 12 / 2016

The man with
the merger
cheque book
Computer technology giant Dell’s
chief financial officer Tom Sweet tells
how he sees his role as a “co-pilot”
to the company’s boss Michael Dell
I
t started with Michael
Dell and Joe Tucci,” says
Tom Sweet, referring to
the $63.4-billion merger
between Dell and Tucci’s storage
company, EMC. “Joe and Michael
go way back. They’re business
colleagues and they’re friends.
They’ve had an active dialogue
over the years about the industry,
how the companies might work
together. And you know that EMC
had a number of
activist investors
who had been
advocating for
change in the EMC
structure over the
last few years. So
EMC was under
some pressure to
maximise share-
holder value.”
Now, thanks to
the biggest merg-
er in technology
history, some of
the pressure is off
EMC. The highly
leveraged deal,
which leaves Dell with almost $50
billion of debt to pay down, was
made possible by the creation of
an unusual “tracking stock” tied to
VMware, an EMC subsidiary, which
allows the newly formed Dell EMC
to keep control of the business,
despite owning less than 50 per
cent. Having taken his eponymous
company private again in 2013 in a
$25-billion deal, Michael Dell has
made no secret of how much he has
enjoyed being free from the tyran-
ny of the “90-day shot clock” that
comes with being a public concern.
“That allows us to take longer-term
views around investment decisions,
strategic decisions and opportuni-
ties,” says Sweet. The hope is that
the consolidation of Dell’s hardware
business with EMC’s cloud storage
capabilities will combine with the
scale and expertise of its sales force
and supply chain to drive a success-
ful long-term strategy. But it’s worth
noting that some in the industry
aren’t so sure. The chief executive
of one of Dell’s big-
gest rivals told the
Financial Times
(anonymously) that
the merger merited
the description in-
famously bestowed
upon the ill-fated
Hewlett-Packard
purchase of Com-
paq of “two garbage
trucks colliding”.
For his part as
Dell’s chief finan-
cial officer, has
been working hard
to make sure that
doesn’t happen.
When he speaks to me from the
company’s headquarters in Round
Rock, Texas, he says the weeks
since the finalisation of the merg-
er have mostly been spent on inte-
grating Dell and EMC as smoothly
as possible, “spending time on
policies, processes” and working
out “how do we integrate to go to
market?” Beyond that, Sweet runs
off a list of responsibilities that fall
INTERVIEW
EDWIN SMITH
have the strategy team underneath
me and we’re tackling a number of
issues about how we play in certain
areas and certain markets. So I do
think the role has expanded from a
classic ‘close the books, report the
results and manage the capital’ to
a much broader, quite frankly more
interesting, dynamic job, which is
what interests me about it.”
Some financial chiefs’ remits, of
course, have swelled more than
others. Mark Evans joined the list
of former chief financial officers to
have taken the top job when he was
installed as chief executive at tele-
coms giant O2 earlier this year. An-
thony Noto hasn’t done the same,
yet, but has managed to accrue
power and influence at Twitter af-
ter buying more stock while other
senior executives were only sell-
ing, taking on more responsibility
and working alongside a part-time
chief executive in Jack Dorsey, who
splits his time between Twitter
and payments company Square.
But even the chief financial of-
ficers who are content with the
co-pilot’s seat are influential; it’s
their hands on the purse strings,
their say-so governing wheth-
er projects get the green light or
are sidelined.
As you might expect, Sweet, who
has been with his current em-
ployer for just shy of 20 years, the
last three of them as the financial
chief, is full of praise for his boss.
Mint/GettyImages
The weeks since
the merger
have been spent
on integrating
Dell and EMC
as smoothly as
possible, spending
time on policies
and processes
DellTechnologies
under his “classic CFO role” such
as financial reporting, account-
ing, business support, back-office
transactional systems, investor re-
lations, treasury and tax.
But he also heads up Dell Finan-
cial Services, which offers leasing
and other forms of finance for cus-
tomers, is taking control of a di-
vestiture process that will see the
company shed some of its assets
and is in charge of a strategy team,
which “helps Michael and the busi-
ness leaders think about position
in the market and the strategic di-
rection of the company”.
If it sounds like Sweet has a lot
on his plate, then he may not be
alone. In a report published by EY,
the role of today’s chief financial
officer was described as “a job that
may be too big for any one indi-
vidual to do well, given all the re-
sponsibilities and the incredible
contrast between the day-to-day
tactical controllership functions,
and the very long-term, strategic,
executive functions”.
Perhaps unsurprisingly, Sweet
doesn’t go that far, but he does
echo a view, which has gained cur-
rency in recent times, that the role
of the chief financial officer has
become more strategic, rendering
its holder a sort of de facto “co-pi-
lot” for the chief executive.
“I do think that I’m providing
inputs and thoughts, and my ob-
servations, helping Michael think
through some of the strategic deci-
sions he has to make and that we’re
making as a company,” he says. “I
01
Tom Sweet has
been with Dell
for almost
20 years, the
last three of
them as chief
financial officer
02
Chief executive Mi-
chael Dell following
the completion of
the newly formed
company
02
01

I’m providing inputs
and thoughts, and
my observations,
helping Michael
think through some
of the strategic
decisions he has
to make
raconteur.net
He cites Michael Dell’s knowledge
of the industry, its trends and his
thoughtfulness, and says: “I love
working with Michael. He’s willing
to debate points, he has a point of
view, generally, as do I, generally.”
He laughs. “I view my job as the
CFO here to help enable his vision.”
Asked what he’s like as a boss
himself, Sweet jokes that it’s prob-
ably a “dangerous question” and
good naturedly inquires whether
I have any inside knowledge from
his team. A little more seriously,
he admits to being demanding, but
says he avoids micro-management.
“I have an incredibly talented or-
ganisation and part of what I try
to do is put the best people in the
right jobs so they can maximise
their capabilities,”
he says. “So we lay
out expectations –
the stuff they need
to get done to sup-
port the company
and where we’re
headed – and then
turn them loose to
let them run their
function. It’s gen-
erally been a good
formula for me.”
Sweet says that
he “learnt the bal-
ance of driving a
finance organisation within the
context of enabling a business
model” from two of his predeces-
sors at Dell, former American Air-
lines chief executive Don Carty
and Tom Meredith. Of his peers,
he picks out Microsoft’s Amy Hood
and Intel’s Stacy Smith, who re-
cently took on a broader operations
role, as operators who embody the
strengths needed in a modern
chief financial officer.
“I think you’ve got to understand
the business – your own company
and the industry,” he says. “So, do
you understand your business? Do
you understand the business model?
Do you understand the levers that
you have available to you? Do you
understand how your business fits
into the trends that are happening in
the industry and the environment,
and can you shape and influence the
company to move in the direction
that you think is appropriate?”
But he adds: “To become that stra-
tegic partner, you’ve got to do the
basics well. Because if you screw
up and you’re not filing your tax re-
turns properly, or have a reporting
issue or a recording issue, then the
other stuff doesn’t really matter.”
Looking to the future, Sweet says
that using data and analytics to
make predictions is likely to be-
come more important as the com-
pany invests resources and uses
developments in the technology,
even if limitations are likely to re-
main. “As you might imagine, the
technology sector can be relatively
volatile. So it’s not a case of saying
‘we’re going to grow at 1.5 per cent
for the next 20 years’, it depends
on demand and macro-economic
circumstances. But trying to do a
better job of predicting business
performance and enabling busi-
ness decisions is something that
we’re pretty focused on. I think us-
ing predictive ana-
lytics is a huge win
for us, but we’re
just in the infan-
cy of trying to do
that,” he says.
Another of
Sweet’s chief con-
cerns will be man-
aging the teams
under his com-
mand and trying
to ensure Dell’s
global finance
workforce of 7,500
people is enriched
with the right talent, wherever it
comes from. “Technology is ena-
bling our people to work anytime
anywhere,” he says. “So the work-
force dynamics around my finance
team are changing. You think
about flexible working, work-life
balance and things of that sort –
I’m looking for the best talent, even
if it’s not necessarily located some-
where I have an office. Workforce
productivity tools are changing
the shape of our finance function
pretty rapidly.”
Sweet acknowledges that there
have been times when this idea has
been counter-productive. Marissa
Meyer’s decision to completely axe
flexible working at Yahoo! in 2013
is the most notorious instance of
“modern” attitudes to such flex-
ibility back-firing, but it’s not
unique. Best Buy and Reddit are
among the big names to have done
the same. Sweet, though, believes
it has a place at Dell.
DELL-EMC MERGER FACTFILE
ANNOUNCED
October 12, 2015
COMPLETED
September 7, 2016
DEAL AMOUNT
$63.4 billion
NEW COMPANY NAME
Dell Technologies
W
hen you think of a big
organisation, the natural
inclination is to focus on its
core product oroffering.This is entirely
warranted, after all they act as the
engineofrevenueandbusinessgrowth.
Such is theirimportance that the teams
who deliver these offerings to market
– sales, marketing, engineering and
design – are often heralded for the
work they carry out.
However, it’s important to
rememberthere is a critical, less lauded
functionto anyfirm –the financeteam.
Much like the human aorta, theyusually
work away quietly, ensuring the rest of
the body can function.
Despite their importance, their role
is often taken for granted. This means
the critical role the finance team
play can be overlooked and, in some
instances, be the last to benefit from
new technologies, often being stuck
with processes that inhibit them from
performing effectively.
It’s a sentiment that is backed up
by a survey of 500 senior finance
leaders across 300 smaller businesses
and 200 large enterprises in the
UK, commissioned by Concur and
carried out by Vanson Bourne. The
results paint a mixed picture – one
of increasing pressure, a yearning
to implement modern process and a
desire for less admin.
WE’RE IMPORTANT, BUT…
The finance team know they are
important. Ninety-six per cent of
respondents said their team played an
important role in influencing business
strategy, while 84 per cent said their
role had become more important inthe
last five to ten years.
Despite this feeling of importance,
there is an underlying frustration
that the finance team can’t perform
to the best of their ability due to one
underlying factor – admin.
According to respondents, 18 per
cent of their team’s weekly time was
spentongeneraladmintasks,compared
with just 8 per cent on providing
strategic insights to their rest of their
business.This means less time was spent
focusing on important issues, such as
internal and external compliance.
Spending such a large amount of
time on admin processes, has led to a
feeling of despondency, with 64 per
THE UNSUNG
HEROES: WHY YOUR
FINANCE TEAM NEED
MORE SUPPORT
Automation of business functions can free up the finance team to thrive,
says Chris Baker, UK managing director, enterprise, for Concur
cent of respondents admitting to a
feeling of disconnect between the
important tasks they need to carry
out and what is taking up the majority
of their time, while three-quarters
said they believe other departments
underestimate the value of their work.
HINDRANCE OF PROCESS
In short, finance teams feel they could
bedoingbetterandarebeingheldback.
Much of the reason for this is complex
processes, which are hindering finance
teams from doing better and, if
automated, could improve their job
functions considerably.
Forty six per cent of respondents
said their department didn’t have a
large amount of freedom to implement
efficiency solutions as they see fit. This
is despite many saying the ability to
execute new technology had improved
over the last ten years, enabling them
to focus more time on getting a
better view of cash flow, becoming
more productive and optimising other
processes in the business.
A classic example of this are two
banes of many a finance team – the
expense and accounts payable. In
the survey, 38 per cent of businesses
described their expense process and 32
per cent their accounts payable process
as mostly or entirely manual. Only 35
per cent had automated more than
three quarters of theirexpense process,
with the numberrising to 39 percent of
accounts payable and receivable.
Such statistics show just how much
the finance team are left to take on
manual tasks. It also goes a long way to
showthatinmanycasesthisdepartment,
which provides one of the most critical
services to any organisation, needs
more support and more freedom to
improve the waythey work.
Yes,theymaynotbethedrivingforce
that is sales or possess the innovation
of the engineering team, but without
finance there is no revenue, profit,
expenses, invoices and pay cheques –
and without these, there is no business.
For more information please visit
concur.co.uk
COMMERCIAL FEATURE
Chris Baker,
UK managing director,
enterprise, Concur
COMBINED ANNUAL REVENUE
$74 billion
FACT
Biggest merger in technology
history; now world’s
largest privately controlled
technology company
COMMERCIAL FEATURE

I
n his high-profile November
lecture in memory of the dis-
tinguished economist G.L.S.
Shackle, the Bank of Eng-
land’s Andy Haldane lamented
the fact that economics in general
and finance in particular had been
particularly slow to learn from
other disciplines. It was, he said,
the worse for it. Other sciences had
gained great insights by applying
thinking developed in other fields;
finance was only now coming to
recognise that psychology and oth-
er human behavioural issues often
played a huge part in successful
business outcomes.
Interestingly another economist
Andrew Smithers made a similar
point in his 2013 book The Road
to Recovery in which he lamented
the decline in the levels of busi-
ness investment in the UK and
United States not just since the fi-
nancial crisis but for ten or more
years before that.
Smithers’ thesis was that a ma-
jor structural problem was lurking
unseen. He argued that changes in
the way executives were paid had
made them excessively risk averse.
It was now commonplace for them
to collect big pay bonuses if they
hit certain short-term financial
targets. Accordingly they would
not take the routine risks associat-
ed with investment for the longer
term if they thought the costs
might mean they fall short of their
short-term goals. And the doubly
interesting thing is they might
not even be aware they were influ-
enced in this way, and might not
even have calculated those invest-
ment risks correctly.
These words should strike a
chord with finance directors as
they struggle to shake off their
“scorers” label – that they should
confine themselves to the numbers
and nothing else. Modern technol-
ogy has taken much of the drudge
out of their traditional role because
it is now possible to get fast and ac-
curate information rapidly from
even the most far-flung and com-
plex operation. This frees them up
to apply their financial awareness
and facility with numbers over a
wider canvas.
It is time for those who have not
already done so to raise their sights
to become an in-
tegral part of the
team alongside
the chief execu-
tive. They need to
be in there helping
to implement busi-
ness strategy, not
simply measuring
and monitoring
their outcomes.
American author
Daniel Kahneman,
surely the only
winner of the Nobel Prize for Eco-
nomics to describe himself as a psy-
chologist, has shown one way this
might work. He has written that if
investment risks are assessed indi-
vidually, the outcome is different
from what you get if they are as-
sessed collectively. It is summed
up in the phrase “you win some and
you lose some” and Kahneman’s
view is that this is the approach
companies, and indeed private in-
vestors, should take because the fu-
ture is inherently uncertain and no
one can ever be sure how an invest-
ment will work out, however much
homework they do beforehand.
The way to cope with this is to
accept some will fail, but they
won’t all fail and to design strate-
gies accordingly.
RISK AND REWARD
ANTHONY HILTON
That means in effect the busi-
ness will be advanced if it puts in
place a portfolio of investments
on the understanding they will
not all pay off. This is where the
chief financial officer is impor-
tant. If the finance department
continues to insist that each of
these investments is assessed in-
dividually on its
own merits, the
odds will be tilt-
ed against each
in turn because
of the executive’s
p s y c h o l o g i c a l
fear that this will
be one which
turns out to be the
loser. The result
overall will be the
business will not
invest as much as
it could or it should.
Alternatively if the chief finan-
cial officer insists on a portfolio
approach to risk assessment, the
result will be different.
However, it does mean the finance
chief has to raise his or her game. It
goes against the grain for them to
say “too much detail”. It takes them
out of their comfort zone to say “ig-
nore the individual losers because
it is the average performance which
matters”. But if they cannot do
this the business will be more risk
averse than it should be and perfor-
mance will suffer.
This thinking has implications
for the whole economy, not just
individual companies. It is inter-
esting to look at what it is that has
driven profits growth in recent
years in UK companies to compare
this with the drivers in other coun-
tries. Anecdotally, what you do
find is that the recurring source of
margin improvement in the UK has
been from cost-cutting, plant clo-
sures, streamlining and rationali-
sation, so there are finite limits in
what can be achieved. By contrast
in Germany growth has come from
investment, raised productivity
and expansion, so theoretically the
sky is the limit.
Business in the UK is dominated
by finance, while in Germany it is
dominated by engineers – and it
shows. For UK business to optimise
its future, finance needs to rethink
its attitude to risk.
‘Companies are limited,
not liberated, by finance’
Businesses in the UK tend to be risk averse, resulting in a lack of
investment which is hampering economic growth
Business in the
UK is dominated
by finance, while
in Germany it is
dominated by
engineers – and
it shows
The great challenge facing
any life assurance company
is knowing who owns what
policies. Insurance company
records based on policy
numbers have one real
handicap. The number can
identify who holds a life
policy or an annuity, but it
does not work in reverse.
Starting with a name, it does
not produce a reliable list of
all the products an individual
might hold. So the company
cannot quantify its risks at an
individual level.
Therefore, traditionally
insurers have managed risks
by looking at the aggregates
of their life assurance policy
book and their annuity book,
and then allocating capital
separately to back these and
other lines.
Capital is needed in effect to
guarantee that it will have the
necessary funds to pay out on
its policies when they fall due.
But this method of risk
control is expensive. Capital
has a cost and the more capital
an insurance company has
to set aside, the more cost it
carries. Finding ways to reduce
capital brings an immediate
boost to profits.
This is where, according to
chief executive Mark Wilson,
Aviva’s finance team have
broken new ground. They have
devised a way to interrogate
legacy systems which should
enable them to produce a
comprehensive list of what
an individual customer owns.
For the first time, Aviva can
properly understand its risk
exposure at an individual level
and begin to manage it.
The key insight is to
understand that the company
cannot be at risk to pay
out on an annuity and a life
policy at the same time as
the policyholder has to be
either alive or dead. So at an
individual level, these risks
can be offset, which sharply
reduces the need for capital
and cuts costs.
CASE STUDY: AVIVA
raconteur.net
CORPORATE RISK APPETITE
PERCENTAGE OF UK CFOs WHO THINK IT IS A GOOD TIME TO TAKE
GREATER RISK ON TO THEIR BALANCE SHEETS
Source: Deloitte 2016
Bloomberg/GettyImages
Q32007
70%
60%
50%
40%
30%
20%
10%
0%
Q12008
Q32008
Q12009
Q32009
Q12010
Q32010
Q12011
Q32011
Q12012
Q32012
Q12013
Q32013
Q12014
Q32014
Q12015
Q32015
Q12016
Q32016
ABOVE
Andy Haldane, the
Bank of England's
chief economist,
says finance has
been particularly
slow to learn from
other disciplines

COMMERCIAL FEATURE
THE FUTURE OF
PURCHASING
AND BUDGET
HOLDER
MANAGEMENT
Powerful software can eliminate paper,
unite finance, procurement and budget
holders, and provide a real-time picture of
company finances
I
n a world where the chief financial
officer is expected to play an
increasingly strategic role, the
corporate finance function is more and
more beset by the challenges – and
opportunities – posed by the speed of
advances in technology.
While finance chiefs are keen to
contribute to the performance and
growth of their organisation, they can
be too mired in the complex demands
of their operational, regulatory and
tactical roles to create the impact on
value expected of them.
Chief financial officers are at the
forefront of strategic decision-making
when assessing how their technology
infrastructure, which is so crucial for
business growth, is implemented.
All too often, tactical decisions that
met a specific pain point have led to
implementing multiple applications
which not onlyfail to talk to each other,
but make the financial management
process unnecessarily complex.
Increasingly, the finance function
is understood to operate most
effectively when a “single source of
truth” of relevant data is gathered,
consolidated and shared across teams.
Thisisavitalrequirementforoptimising
organisational alignment, efficient
planning and reporting, and driving the
business forward based on data that all
stakeholders can agree on. Instead too
often departments are using different
software solutions resulting in multiple
sources of data, creating confusion and
ultimately slowing productivity.
A key example is the purchasing
process, usually still paper-based,
slow to progress and with relevant
financial information siloed between
budget holder’s spreadsheets, and
held within inaccessible accounting
software, or filing cabinets, by the
finance department. For most finance
departments,it’senoughthatpurchasing
orders are placed, however undisciplined
that process may be, invoices paid,
monthly management reports produced
and the auditors kept satisfied.
In fact, for budget holders, the
whole process is usually not fit
for purpose with finance failing to
provide information that tracks
supplier relationships, manages
budgets or helps to create and
manage project-related budgets and
spend. The only information they are
likely to receive is a management
report which is between five to
fifteen days out of date by the time
it’s delivered. Furthermore, as most
budget holders are maintaining
their own processes, with data held
on spreadsheets, it is robbing the
finance department of valuable real-
time financial information.
An effective budget holder
management accounting system
provides “the truth” to all stakeholders
by capturing a single, real-time view
of the entire purchasing process.
Budget holders are able to access all
the information on their suppliers’
spend, the status of all current and
past transactions, and capture budget
information and future planned project
spend to manage expenditure against
project budgets.
The finance team gains a disciplined
purchasingprocessthatspeedsupevery
facetoftheprocessandallowsaccessto
future planned project expenditure. A
100 per cent browser-based application
designed specifically to integrate with
existing software can deliver startling
benefits and value at a surprisingly
affordable cost. This delivers:
Fast electronic approvals – a
formal, disciplined and auditable
approvals process, actioned from
any connected device, with all the
supporting information to hand,
features automated reminders and
personal “nudges” to make approvals
swift and easy.
Comprehensive query management
– with every invoice query captured
and tracked in real time, finance and
approvers can work together to keep
suppliers on side.
information that is relevant to them,
and on final approval every invoice
is automatically posted with a full
audit trial.
PAPER INVOICES, YOUR TIME IS UP
With no legal requirement for paper
invoices, their time is up. Most
businesses have changed the way they
deliver their sales invoices to be paid
as soon as possible, generating sales
invoices as PDFs that are e-mailed
directly to the customers, incurring
no expenditure or delays. The data
from PDF invoices can be harvested
with total accuracy, creating an
invoice transaction that is immediately
available for approval.
Unsurprisingly, the use of e-mail
PDF invoices has grown from around
20 percenttwo years agoto morethan
65 per cent and is on track to reach 90
per cent of all invoices generated over
the next 18 months.
AUTOMATED
PURCHASE ORDERING
Simplyautomatingpurchasingordering
may benefit the finance department,
but it fails to meet the needs of budget
holders. An effective budget holder
managementsystemmustreplacetheir
spreadsheets or it is simply duplicating
their work. Budget holders already
maintain their own spend analyses that
reflect their departmental activities, so
any effective purchasing automation
process must replicate this capability,
while also delivering the same
information in the standard profit and
loss format.
As important, the new purchasing
process must enable the simple
capture of planned projects and likely
costs and cash-flow implications,
benefiting both the budget holders
and the finance department with a
single view of “the truth”.
THE SOLUTION
It’s time to overhaul the working
relationship between finance and
the rest of the business with a 100
per cent browser-based application
that extends the functionality of
all existing ERP and accounting
software using API connectors
designed specifically for the purpose
with seamless integration.
This delivers real efficiency,
information and time-savings to
budget holders that drive adoption,
whilethe financeteam gains disciplined
purchasing and approval processes
with a real-time view of commitments,
accruals and budget availability.
Let your business make significant
productivity gains, while providing your
budget holders with the information
that allows them to make the best use
of their budget spend.
www.compleatsoftware.com
COMMERCIAL FEATURE
It’s time to overhaul the working
relationship between finance and
the rest of the business
Single unified overview of suppliers
– budget holders and approvers have
access to all the information on their
suppliers, including turnover, every
invoice awaiting approval or under
query, plus approved invoices and
payment statuses.
Fully automated order
reconciliation – automatic two and
three-way matches with the order
and/or receipt, with successful
matches are passed directly into the
workflow; three-way matches are
posted to accounting packages with
zero touches.
Real-time budget management –
budget holders have instant access to
their available corporate and project-
related budgets, helping them to
manage their departmental spend
proactively moment by moment,
removing all the phone calls and
e-mails every month.
Accounting and enterprise
resource planning (ERP) integration
– tight real-time integration extends
the functionality of every accounting
and ERP solution; users only ever
see the suppliers’ and general ledger

CFO OPTIMISM AROUND THE GLOBE
TRENDS CFOs THINK ARE
TRANSFORMING BUSINESS
CFO OUTLOOK
Percentage of CFOs who think the region will see modest to substantial economic growth over the next year
Region's respondents All respondents
TECHNOLOGIES CFOs
EXPECT TO HAVE A MAJOR
IMPACT ON THEIR FIRMS
2008 20082009 20092010 20102011 20112012 20122013 20132014 20142015 20152016 2016
71%
62%
65% 65%
NORTH AMERICA EUROPE
Source: IBM 2016 Source: IBM 2016
0% 0%
20% 20%
40% 40%
60% 60%
80% 80%
100% 100%
INDUSTRY
CONVERGENCE
RISING
CYBER RISK
THE “ANYWHERE”
WORKPLACE
REDISTRIBUTION
OF CONSUMER
PURCHASING POWER
SUSTAINABILITY
IMPERATIVE
ALTERNATIVE
FINANCE AND
FINANCING
MECHANISMS
SHARING
ECONOMY
CLOUD COMPUTING
AND SERVICES
60%
67% 48%
47% 46%
29% 24%
22%
A
A
B
B
C
C
D
D
E
E
F
F
G
G
MOBILE
SOLUTIONS
52%
INTERNET
OF THINGS
52%
COGNITIVE
COMPUTING
38%
ADVANCED
MANUFACTURING
TECHNOLOGIES
36%
NEW ENERGY
SOURCES AND
SOLUTIONS
26%
BIOENGINEERING
14%

Source: IBM 2016
IMPORTANCE AND EFFECTIVENESS OF STRATEGIES FOR
CFOs TO WEATHER DISRUPTION
Develop talent in the
finance department
Provide input into
enterprise strategy
Optimise planning,
budgeting and forecasting
Drive integration of information
across the enterprise
Identify and track new revenue
growth opportunities
Importance Economic growthEffectiveness Spending/investment
86%
86%
81%
75%
63%
60%
67%
62%
47%
38%
Percentage of CFOs who think the region will see modest to substantial
economic growth over the next year, and the amount they expect to increase
their company’s level of spending and investment
OUTLOOKS MIXED WITHIN REGIONS
Actions CFOs are taking in light of political or economic uncertainty, domestic and
international, over the next year
Percentage of CFOs who believe the following are important or effective
IMPACT OF POLITICAL AND ECONOMIC UNCERTAINTY
Increase our focus
on domestic markets
Increase our investment in risk
management or security
Redirect planned investments
from some countries to others
Reduce our levels of spending
and investment overall
Avoid doing business in
some other countries
None of the above
41%
39%
31%
30%
28%
12%
Source: CFO Research/American Express 2016 Source: CFO Research/American Express 2016
2008 20082009 20092010 20102011 20112012 20122013 20132014 20142015 20152016 2016
73%
59%
65% 65%
Source: CFO Research/American Express 2016
LATIN AMERICA ASIA/AUSTRALIA
CANADA
UNITED
STATES
ARGENTINA
BRAZIL
MEXICO
FRANCE
GERMANY
RUSSIA
UK
AUSTRALIA
CHINA
HONG
KONG
INDIA
JAPAN
SINGAPORE
0% 0%
0%
20% 20%
20%
40% 40%
40%
60% 60%
60%
80% 80%
80%
100% 100%
100%

https//mygide.uk/times
The most powerful and business friendly
financial modelling tools on the market,
at a price that makes sense
f o r w a r d - l o o k i n g s o f t w a r e

raconteur.net
a tax strategy will make business-
es think twice before pursuing any
kind of tax avoidance.”
While complexity has allowed
some companies to minimise their
tax bills, most chief financial of-
ficers crave clarity, says Taxand’s
Mr Wach. “There aren’t any easy
answers. What is certain is that
CFOs and tax directors want con-
sistent and clear guidance as to
what is acceptable and what is not,”
he concludes.
W
hen giant companies
with devilishly com-
plex tax arrangements
are accused of unethi-
cal behaviour, the stock response is
“we act within the rules”. If the pub-
lic and politicians don’t like it, the
argument runs, they should change
those rules.
Presented with the apparent con-
tradiction between
a gargantuan turn-
over and the skinny
profits that can
result in a trifling
tax bill, defenders
of multinational
businesses will
often explain that
it’s their job to im-
prove financial ef-
ficiency in any way
that’s legal, not to set tax law.
Does that hold true? Is it really
the chief financial officer’s job to
reduce the tax bill at all costs? It’s
not quite so simple, says Matthew
Rowbotham, partner and head of
tax at law firm Lewis Silkin. There
is, of course, no obligation for Eng-
lish companies to minimise taxes.
They are, however, obliged by law to
promote the success of the business.
“That specifically requires a
balanced approach to a range of
factors, not a narrow focus on net
profit maximisation,” says Mr
Rowbotham. Listed companies
also have additional considera-
tions under the corporate govern-
ance code that promote “trans-
parency, risk management and
accountability in corporate deci-
sion-making”, he notes.
That sounds like a description of
exactly what some believe is lack-
ing when big businesses establish
elaborate structures to take advan-
tage of the gaps in international
tax rules.
However, following a series of
tax scandals, in-
cluding this year’s
ruling from the
European Com-
mission that Apple
must pay back the
Irish state up to
€13 billion in taxes
after it was found to
have been given an
anti-competitive
“sweetheart deal”,
the mood appears to be changing.
Tim Wach, managing director
at Taxand, the global tax adviser,
says: “The last decade has seen po-
litical and public perception of [tax]
planning change dramatically, with
people seeing any form of planning
as damaging to reputation and a cor-
responding increase in tax audits by
authorities globally.
“Our recent survey found that 77
per cent of CFOs and tax directors
said they have seen an increase in the
number of audits undertaken by tax
authorities in the past year – up from
60 per cent who said this in 2015.”
“The concern might be about the
risk of an HM Revenue & Customs
challenge or the damage to brand
caused by media coverage. There’s
no point shooting for a lower tax
rate if it causes your profits to
plummet when you’re criticised in
the press.”
Legislation introduced in the
2016 Finance Act now requires
big business to publish their tax
strategy. “Affected companies will
need to decide where their own
risk- reward boundaries lie,” says
Mr Rowbotham. “Of course, the
government is hoping that the very
act of formulating and publishing
While the pressure for chief finan-
cial officers to reduce taxes can be
intense, he notes that companies
are becoming increasingly aware of
a “negative view of tax avoidance”.
Taxand’s survey found that 91
per cent of chief financial officers
and tax directors believe that ex-
posure of a company’s tax policy
has a detrimental impact on a com-
pany’s reputation, up from and 51
per cent in 2011.
Laurence Field, head of tax at ac-
countants Crowe Clark Whitehill,
says: “Your job is to maximise prof-
its, shareholders tell management.
In the past this has been used as an
excuse to maximise returns through
aggressive, but not illegal, tax plan-
ning schemes.
“These days the position is more
subtle; your job is to maximise prof-
its at a sustainable level, say share-
holders. With greater focus on the
moral and ethical issues surround-
ing tax avoidance, companies don’t
want their businesses disrupted
through [a taxman] investigation or
adverse publicity.”
The result? Chief financial officers
have stopped asking whether a tax
structure simply works and are now
focused on thinking about what it
could look like, regardless of wheth-
er the law allows it, Mr Field argues.
That can result in a confusing posi-
tion for the finance chief.
“The moral dimension in tax is
now important to high-profile busi-
nesses. Campaigners, the press and
tax authorities have… [discouraged]
businesses from simply follow-
ing the law. They want business to
follow the law as they would like it to
have been written, rather than how
it is written,” he adds.
With the risk of falling foul of reg-
ulators as well as public opinion, un-
derstanding and warning manage-
ment of the potential downsides to
aggressive tax planning has become
as much a part of the chief financial
officer’s role as considering potential
tax savings, Mr Rowbotham notes.
“A director might be in breach of
company law if they mismanage a
company’s tax affairs, but they are un-
likely to be criticised simply because
they considered, and rejected, a plan-
ning opportunity which in their view
presented a business risk,” he says.
Recent high-pro-
file tax scandals
have changed
both political and
public perceptions
of tax planning
Taxing issue
of paying
what’s due
Controversy over giant corporations
paying dwarfed tax bills has put finance
chiefs in the media and public spotlight
TAX AND REPUTATION
JAMES HURLEY
While some multinationals
appear to carry on regardless
in the face of political and
public outrage over their tax
arrangements, others are more
sensitive to being hauled over
the coals.
In 2012, coffee chain
Starbucks faced protests over
its use of tactics like paying a
“royalty fee” of 4.7 per cent
from its UK company to a
Dutch subsidiary for the rights
to use the Starbucks name and
coffee recipe.
It also used transfer pricing,
buying coffee beans from its
Swiss subsidiary at a mark-up,
to help to minimise its UK tax
bill. According to a Reuters
investigation at the time, the
coffee giant paid only £8.6
million in UK corporation tax in
the preceding 14 years despite
£3 billion in sales.
In an attempt to draw a line
under the issue, the company
made the unprecedented offer
of a “voluntary” UK tax payment
of £20 million.
The move was widely ridiculed.
Tax experts described the
arrangement as “commercially
gobsmacking”, politicians said
it made a “complete joke” of
the British tax system and
tax campaigners called it “a
desperate attempt to deflect
public pressure”.
Last year, Starbucks boss
Howard Schultz complained that
coverage of the episode in the
British media “took on a life of its
own” and the company had been
portrayed in “a pretty bad way”. It
just goes to show that it may be
easier to err on the side of caution
when it comes to tax planning,
when avoidance activities have
invited such opprobrium.
CASE STUDY: STARBUCKS
The moral
dimension in tax
is now important
to high-profile
businesses
1000Words/Shutterstock
pio3/Shutterstock
Transfer pricing
Tax litigation/disputes
Indirect tax
Corporate tax rate
Compensation equity
and employment tax
Supply chain/
business restructuring
Mergers and acquisitions tax
Individual tax
Real estate tax
20%
15%
13%
13%
9%
9%
8%
7%
MOST CHALLENGING AREAS OF TAX IN 2015
GLOBAL SURVEY OF MORE THAN 400 TAX PARTNERS AND 2,000 TAX ADVISERS
Source: Taxand 2016
6%

T
he role of chief financial
officer is beset by chal-
lenges, from handling new
accounting standards to
wider regulation and evolution of
corporate treasury in the face of risk-
averse banks. So top finance chiefs are
reaching out to technology partners to
handle these increased demands and
limit the growth of associated costs.
In the 2015 Financial Executives
International CFO Technology Study,
analysts at Gartner found that busi-
ness intelligence (BI), analytics and
performance management were the
top areas for CFO IT interest.
According to analysts John Van
Decker and Christopher Iervolino:
“Most technology constraints con-
cern the lack of business insight or
BI availability, and the inability to
use business applications for pro-
cess efficiency.”
Here are six key issues chief finan-
cial officers face and the technology
that can help them.
INNOVATIVE TECH
DAN BARNES
Six technologies
are revolutionising
finance chief's role
Chief financial officers are able to tap into innovative new
IT to boost their performance and company efficiency
01 GETTING VALUABLE
BUSINESS INTELLIGENCE
DATA WAREHOUSING
Data warehousing is a technology
that lets firms store and retrieve
huge data sets, allowing the user to
get valuable insights from an enor-
mous scale of information. Typi-
cally employed by very large busi-
nesses, this lends itself to complex
analysis of business intelligence
and even real-time BI.
“WithBIthereisstillahighdegreeof
manual operation that tends to cover
basic reporting requirements,” says
Irfan Khan at SAP. “If it is providing
analysis into specific areas of market
risk, credit risk or other nitty-gritty
risk associations within the business,
there is often a long tail of legacy tech-
nology that you have to deal with.”
Rather than using multiple data
bases for business silos, a data ware-
house operates at a scale that can
work across the whole enterprise.
02 BALANCING FINANCIAL
ANDRISKMANAGEMENT
BIG DATA
Chief financial officers increas-
ingly need to balance financial
and risk data to show a single set
of figures. In finance this is often
the case to support stress tests that
regulators use to assess a compa-
ny’s strength. In these circum-
stances, the ability to crunch mas-
sive data sets is of real value. Big
data systems have something of a
misnomer as they not only handle
large chunks of data, they can also
handle high-speed data process-
ing and in some cases tackle pro-
cessing of unstructured data, such
written documents rather than
purely structured numerical data.
Mark Sykes, chief operating of-
ficer at high-performance com-
puting specialist Kx, says: “The
open source movement has made
the cost of entry of this type of
technology much lower than it
would have been historically. If
you just roll back ten years you
would have needed very expen-
sive mainframe or big-iron tech-
nology to be able to run this,
unless you were using a database
like Kx.”
03 UNDERSTANDING
ORGANISATIONAL
COMPLEXITY
BUSINESS PROCESS
MANAGEMENT SYSTEMS
Knowing your business inside out is
no simple matter. For a chief finan-
cial officer, who wants to get to grips
with the assets, costs and process-
es involved in an enterprise of any
size, they will need business model-
ling tools that can create a whole en-
terprise model, from strategy over
business processes to information
architectures, application land-
scapes and services.
Tools such as Software AG’s ARIS
and IBM’s Blueworks Live can be
used to model processes within a firm
and, combined with other analytics,
they can then be used to establish
the technology assets underpinning
the organisation. In Gartner’s CFO
study, business process management
tools were ranked as a top-three in-
vestment priority over the next three
years by 21 per cent of respondents.
06PERFORMANCE
MANAGEMENT
REAL-TIME ANALYTICS
Real-time analytics can allow a
business to keep track of perfor-
mance in an environment that is
seeing volatility in currencies,
commodities and in political
risk. The finance department is
undergoing transformation just
as much as any other part of the
business to streamline process-
es, to improve operational con-
trol and to provide a better level
of information for senior busi-
ness managers to make strate-
gic decisions. Understanding
performance is both challeng-
ing and dynamic.
“Without proper documenta-
tion and insight, organisations
risk failing to deliver the antici-
pated business value,” says Char-
lie Platt, sales director for finan-
cial services at Software AG.
In an increasingly complex
situation, the ability to capture
the current operating model
– the end-to-end processes,
systems, technologies and the
people that use them – and de-
termine a future model is criti-
cal to understanding where effi-
ciencies can be made, analysing
the impact and cost implica-
tions of change, and assuring
successful implementation.
“Utilising real-time and
in-memory analytics can provide
more timely insights without
many of the limitations of tradi-
tional business intelligence tools
and data mining,” says Mr Platt.
05CROSS-BORDER
GROWTH AND
COMPLIANCE
THE CLOUD
As businesses grow they are
exposed to the rules and ac-
counting standards of different
countries, and of the finances
for companies they acquire or
merge with. Using the point
solutions that are already in
place at acquired firms or
buying local point solutions and
trying to integrate them can be
a major challenge.
“Using the same set of finan-
cial data, using the same char-
tered accountants, what we call
a financial data model assists
in the rest of the organisation,”
says Mark Nittler, vice president
at on-demand financial manage-
ment solution provider Workday.
“So things like an aggregate
view of revenue can happen au-
tomatically. That whole process
of supporting a regional opera-
tion as it is getting going, as well
as how that regional operation
or new acquisition folds into the
existing model, means cloud can
be a huge advantage.”
04CYBER RISK
ARTIFICIAL
INTELLIGENCE
The loss of financial informa-
tion, customer information or
actual assets weighs heavily
upon the finance team. Accord-
ing to the Gartner CFO study, IT
security was the top investment
for larger organisations.
Yet defending against cyber at-
tacks is notoriously difficult. In
the UK, 22 per cent of firms have
suffered a data loss in the last 12
months, according to the 2016
Dell EMC Global Data Protection
Index, yet the UK is the seventh
highest country for having busi-
nesses ahead of the curve in
cyber security.
To get ahead of the cyber crim-
inals, firms are turning to sys-
tems powered by artificial in-
telligence that are able to learn
to spot new attacks rather than
relying upon the pattern of pre-
vious attacks, either as specific
deployments of general ma-
chine-learning systems, such as
IBM’s Watson, or dedicated sys-
tems like Cylance.
Scanrail1/shutterstock
chatchaiyo/shutterstock
ESBProfessional/shutterstock

When we talk with
ICAEW members in
business, the diver-
sity of their skills, experi-
ence and aspirations is strik-
ing. Yes they all have a solid
grounding in finance, tax,
compliance and so on. But,
despite the stereotypes, they
can also be charismatic com-
municators, IT whizzes and
canny entrepreneurs.
The accounting profession
continues to attract some of
the brightest and the best.
So far this has provided a
flow of people able to take on
the chief financial officer’s
role required by the varying
needs of businesses and their
boards, but there is always
more to do.
With this in mind we believe
there are three areas to con-
sider in order to ensure chief
financial officers continue to
enhance organisational per-
formance and develop the fi-
nancial leaders of the future.
Firstly, know your busi-
ness, know yourself and know
whether the fit is right. If
there is one consistent piece
of advice we get from chief
financial officers, it is that to
be effective you have to un-
derstand the business. Easy
to say, not always easy to do
given the pressure of the job.
But getting out into the busi-
ness, understanding how
value is created and tracking
competitor strategies have to
be prioritised.
This becomes a lot easier
when self-aware chief finan-
cial officers build an effective
finance team which com-
pensates for their own weak-
nesses. And by delegating
significant responsibilities,
they play an important part
in developing
future finan-
cial chiefs.
H o w e v e r,
even chief
f i n a n c i a l
officers who
build great
teams know
that their
k n o w l e d g e ,
skills and experi-
ence are better suited
to some circumstances than
others. For example, we know
of chief financial officers who
specialise in turnarounds, re-
alise that they are not suited
to running a stable organi-
sation and aim to develop a
successor who can then step
up to the role when the time
is right.
Secondly, be a role model for
continuous learning and devel-
opment. Chief financial officers
learn almost
continuously
through their
day-to-day
work, be
it through
d i s c u s -
sions with
other board
m e m b e r s ,
meeting oper-
ational managers
or reading the latest
market analysis.
But sometimes a more struc-
tured approach is called for to
open up new ways of think-
ing and collaborate with
people from different indus-
tries. ICAEW supports this
through its year-long F-TEN
programme for chief finan-
cial officers and those as-
piring to the position, which
blends mentoring, workshops
and peer-learning sets. Role
models are important for de-
veloping future leaders and
by demonstrating a commit-
ment to self-development,
chief financial officers help
ensure their finance teams
also take learning seriously.
Thirdly, play a part in im-
proving diversity in finance
teams. Organisational needs
will continue to evolve, par-
ticularly given the develop-
ment of new technologies
including artificial intelli-
gence. So it’s difficult to pre-
dict future chief financial
officer career paths, and the
types of people and skills
that will be required.
In addition to continuous
learning, one way of reduc-
ing the risks of not having the
right people available is to in-
crease diversity in the finance
department. We mean diver-
sity in the broadest sense, not
just those nine areas protect-
ed in UK law, such as gender
and race, but also employing
people from different disci-
plines, like data science, in
the finance department. Also
important is the two-way
movement of staff between
finance and other functions.
Chief financial officers
have been fulfilling strategic
roles and leading on IT for
decades. In other words, they
have managed to adapt to
the needs of the time, albeit
some more successfully than
others. Such adaptability
does not happen by acci-
dent and the finance profes-
sion cannot be complacent.
However, we believe today’s
chief financial officers will
continue to adapt and play
their part in developing the
financial leaders of
tomorrow.
Nurturing the financial leaders of tomorrow
Three ways chief financial officers can lead on change and
enhance organisational performance
OPINION COLUMN
RICK PAYNE
Manager finance direction programme
Institute of Chartered Accountants
in England and Wales (ICAEW)
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COMPONENTS
OF S&P 500
MARKET VALUE
1975
Tangible assets
Intangible assets
1985
0%
20%
40%
60%
80%
100%
Investing in inta
Sometimes unquantifiable but often invalua
sheet, despite their importance
I
tems such as corporate cul-
ture, diversity, talent and
brand reputation are difficult
to value, but may play a key
role in a company’s success.
Investment in such intangibles,
therefore, may be difficult for
chief financial officers to recom-
mend to the board when there is
no obvious return on investment.
Yet the long-term investment case
can be compelling.
“The way in which many organ-
isations currently measure value
and returns can often fail to reflect
the social, fiscal and environmental
considerations that are increasing-
ly critical to business success,” says
Malcolm Preston, partner at global
consultancy PwC.
“The public and wider stakehold-
ers now expect organisations to look
beyond the bottom line, both in their
goals and reporting, to get a more ho-
listic view on which to base decisions
and judge performance.
“It’s not just the balance sheet
that’s important to the CFO, but also
the market capitalisation. Thirty
years ago, around 80 per cent of a
company’s market cap was support-
ed by its net assets, but today that’s
flipped to only 20 per cent. So the
rest is made up of ‘intangible’ value,
including brand reputation, culture
and human capital.”
Protection of the brand and promo-
tion of a strong company culture can
help prevent small issues from snow-
balling into larger ones.
Alon Domb, head of corporate at
legal and professional services firm
Gordon Dadds, says the correlation
between underinvestment in compa-
ny culture and poor brand reputation
with a decline in revenues or a rise in
claims against a company can some-
times be overlooked.
“The key for CFOs is to change their
approach to persuading their board to
invest in intangible assets by focus-
ing on what they could lose by not in-
vesting, rather than the returns they
could make,” he explains.
“Inlightofthecurrenteconomicun-
predictability, investing in intangible
assets might be more prudent than
traditional tangible investments.”
Brand reputation should also be
a priority for companies, says Mr
Domb, particularly online where
challenges to intellectual property
rights can sometimes go unnoticed.
“Companies should view legal pro-
tection for their intellectual property
rights and taking action against de-
famatory statements as protecting
their investment in their brand repu-
tation,” he says.
“Managing the company’s repu-
tation, especially on the internet,
requires continual attention. Bad
INTANGIBLES
ROB LANGSTON
COMMERCIAL FEATURE
raconteur.net 2XXXX
C
ompanies of all sizes are
experiencing a shift in the
composition of their revenue
streams, transitioning from traditional
one-time product sales, to business
models where products are provided
“as a service” via subscription-based
purchasing plans.
Today you can buy jet engines, razor
blades and even bacon as a service fora
monthly fee. This shift has been driven
in part by cloud technology and SaaS
(Software-as-a-Service), but also by
investors’ desire for “sticky”, recurring
revenue. Chief financial officers now
need to adjust their business systems
and monitor new key performance
indicators to succeed fully in recurring
revenue-based businesses.
CASH V RENEWAL
Inthetraditionalproductortransaction-
based sales world, a product or service
is purchased, delivered and cash
collected in what is commonly called
the opportunity to cash process. In the
subscription world, companies need to
think longer term because customers
can leave before selling costs are fully
recouped. This has caused businesses
to shift from an opportunity to cash
mentalityto a longer-term opportunity
to renewal approach, where customer
relationships are closely monitored.
Because customers can leave at any
time, the success rate of customers
and the likelihood of renewal are now
leading indicators for chief financial
officers to predict cash flow, revenues
and long-term profitability. Never
before has customer satisfaction and
their ongoing success been so directly
tied to business results.
‘EVERYTHING-AS-A-
SERVICE’ ECONOMY
Finance chiefs must adapt to a new service economy, says Jeremy
Roche, chief executive at FinancialForce
CUSTOMER-CENTRIC ERP
For chief financial officers, this has led
totherethinkingofenterpriseresource
planning or ERP systems. According
to Ray Wang, principal analyst and
founder of Constellation Research:
“Success depends on a system of
intelligence. Digital business models
require a real-time view of everything
from receivables, utilisation, support
ticketing, analytics and revenue
recognition. It’s no longer about how
great your sales pipeline looks, but
rather whether your customers are
happy and your renewal base is robust.”
Most companies are hard pressed
to achieve this comprehensive view
of their customers. Traditional ERP
systems were designed years ago
before the Everything-as-a-Service
economy took hold. Businesses often
cobble together a disparate mix of
subscription billing apps, revenue
recognition spreadsheets and
traditional accounting solutions. They
try to marry up a separate customer
relationship management system to
monitor customer health and services.
Unfortunately, this creates a myriad of
customer records, multiple versions of
the truth and poor audit trails. This is
hardly a system of intelligence.
A new breed of systems is available
that blends the traditional role of
ERP (system of record) and CRM
(system of engagement) across the
opportunity to renewal process. They
include subscription billing and revenue
recognition capabilities built around a
single customer record where every
interaction with the customer can
be seen across sales, services, billing,
receivables and revenue recognition.
Not only does this position the
company to manage the customer
experience more effectively, it gives
chief financial officers the intelligence
they need to predict future cash
flow and revenue based on customer
success intelligence.
CUSTOMER-CENTRIC CFO
For many chief financial officers,
Everything-as-a-Service business
models can instigate a different
mindset and focus. In a study by CFO
Magazine, 70 percent of chief financial
officers reported that more than half
of their revenue is now coming from
services of different types, and 95 per
cent also believe the chief financial
officer’s role must adapt to this new
services model.
Financial managers need to be
more customer facing, more in tune
with the disposition of customers in
this environment. The information
that investors want to know, such
as renewal, customer attrition and
net expansion rates, lie across the
opportunity to renewal process.
Chief financial officers will need to
scrutinise service levels and customer
issues more than they have in the past.
With the right tools and mindset
shift, chief financial officers can
understand the health of their
customer base and, consequently,
their own businesses. In the
Everything-as-a-Service economy,
the lines between chief financial
officer and chief customer officer
are blurred.
www.financialforce.com
COMMERCIAL FEATURE

1995
https//mygide.uk/times
Promo code: 2025
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f o r w a r d - l o o k i n g s o f t w a r e
2005 2015
angibles is hard to grasp
able, intangible assets may be left off the corporate balance
reviews will happen from time to
time and should not be treated
heavy handedly.”
Investment in diversity and com-
pany culture, through regular re-
views of the employee handbook,
can reduce the risk of disputes,
which can sometimes lead to costly
tribunal claims, he adds.
It can also be important in attract-
ing and retaining staff, particularly
in competitive labour markets, says
Peter Richardson, managing direc-
tor and head of Protiviti UK, a con-
sultancy focused on internal audit,
risk, business and technology.
“Investing in intangible assets
shows employees that organisa-
tions care, and they feel higher
value in their work and are more
committed to their performance,”
says Mr Richardson.
“Employee attrition is expensive
and damages morale. Keeping em-
ployees engaged and retaining them
is more cost efficient in the long run.”
Yet for intangible assets to be
taken seriously by chief financial of-
ficers and their boards, a change in
international accounting standards
may be necessary.
Setting out its work programme for
the next five years in November, the
International Accounting Standards
Board removed specific references
to intangible assets, saying: “Any
attempt to address recognition and
measurement of
intangible assets...
would require sig-
nificant resources,
with very uncertain
prospects for any
significantimprove-
ment in financial
reporting.”
Nigel Sleigh-John-
son, head of the In-
stitute of Chartered
Accountants in
England and Wales’
financial reporting
faculty, says: “Few
intangibles meet
the criteria for recognition on compa-
ny balance sheets, except in the con-
text of the acquisition of a business,
and some would argue that as a result
financial reporting fails to provide a
clear picture of a company’s resources
to investors and other users of finan-
cial reports.
“There is, however, some room for
optimism. In the UK, the quality of
narrative and non-financial disclo-
sures in the ‘front half’ of the annual
report by many listed companies
about the business model, strategy
and drivers of long-term value cre-
ation has improved significantly in
recent years.”
Mr Richardson adds: “One of the
key challenges CFOs face is that
return on investment in such things
as culture; brand does not happen
overnight and it often takes months,
In light of the
current economic
unpredictability,
investing in
intangible assets
might be more
prudent than
traditional tangible
investments
raconteur.net
Source: Ocean Tomo 2015
if not years to see the benefits coming
through. It’s also hard to measure
and therefore to quantify.
“So, when faced with demands from
a range of stakeholders – sharehold-
ers, investors, even employees – who
will still be demanding strong finan-
cial performance, it’s easier to focus
on activities that give immediate
more tangible results.
“As measuring the success of in-
vestment in intangibles is more diffi-
cult and without that obvious line of
sight to ‘justify’ the
spend, it’s easier to
focus on the more
mechanical com-
ponents of running
the business.”
While interna-
tional standards
may yet take time to
reflect the challeng-
es of modern ac-
counting practices,
a change in the chief
financial officer’s
approach to the
issue may already
be underway.
“We review the business case
for every investment which also
includes intangible assets,” says
Andrew Merrick, chief financial of-
ficer at law firm Irwin Mitchell. “In-
vestment in intangible assets, such
as people, company culture and
brand reputation, is capable of im-
proving the business and therefore
generating a strong return.
“However, as with other types of
investment, it is essential to be clear
about the outcomes that will create
value, plan to deliver them and meas-
ure the results.”
Indeed, having an investment
plan will often help financial chiefs
identify the value of intangible
assets and contribute to the ongoing
success of a company.
“Too often, CFOs are seen as
number crunchers rather than inno-
vators,” says Robert Held, Americas
regional director of strategy exe-
cution consulting at international
consultancy Palladium.
“But successful organisations are
recognising to maintain success they
must become the driving force of
change.Andtheresultisprovingtobe
the difference between average per-
formance and extraordinary social
and economic results.
“With its in-depth knowledge
across all departments, the CFO’s
office is perfectly positioned to
identify trends and help drive
growth in an organisation. But
to truly become a game-changer,
CFOs must focus on two core ele-
ments – strategy and customers.”
track5/GettyImages

03CHIEF MARKETING
OFFICER
Chief financial officers who think
marketing is just for fluffy bunnies
are the dinosaurs of the business
world. But there can often still be
significant cultural differences that
prevent the financial chief and the
chief marketing officer from form-
ing the best relationship.
Far too often chief financial of-
ficers focus solely on the costs
rather than the value, while mar-
keting chiefs fail to pin down the
metrics that define success. This
relationship can fail because the
foundations are not in place. It is
always worth having a discussion
at the outset about how each meas-
ures success and being gracious
enough to understand this is simply
a different view of the world, not a
question of right and wrong.
Marketing teams can often be
populated with strong and articu-
late individuals, who are not afraid
to present their case directly to the
chief executive, so the canny chief
financial officer will make sure the
relationship is one of partnership.
As a discipline, marketing is un-
dergoing as great a change as any
within the business world, as social
media increasingly drives the rela-
tionship with the customer, and a
good financial chief understands
this is a business reality, rather than
dismissing it as “something teen-
agers do”. Getting to grips with the
many and varied marketing tools is
a prerequisite.
But it is here that the marketing
and financial chiefs can meet. Mar-
keting tools should offer an insight
into customers that any half-decent
chief financial officer will welcome
with open arms. A good relation-
ship here will cement a customer
profile that can be a basic building
block of strategic predictive model-
ling and that’s a core discipline on
which any C-suite executive should
be focused.
Just because chief financial of-
ficers are from Mars and chief
marketing officers are from Venus
doesn’t mean they can’t have a
great relationship.
02CHIEF
INFORMATION
OFFICER
Digital disruption is one of the
key forces shaping our world,
which makes the relationship be-
tween the chief financial officer
and chief information officer
among the most critical. It’s all
about making good use of each
other’s knowledge to drive the
company forward.
In some cases, the chief in-
formation officer reports to
the chief financial officer, but
whatever the reporting lines,
the information chief has valu-
able input about the technolog-
ical threats and opportunities
in this brave new world. A good
chief financial officer needs to
understand how technology will
transform operations and be able
to evaluate the cost implications
of tech investment – and also
grasp the implications of not in-
vesting in security measures,
for example.
Collaboration is the name of
the game. This is not necessarily
about preventing the chief infor-
mation officer overspending on a
new IT system, though that may
be part of the remit. But if the fi-
nancial chief can’t understand the
cost benefits of the new system,
it’s up to him or her to keep asking
awkward questions.
For the chief information officer,
therelationshipisoftentodowithex-
plaining and persuading. The latest
must-have gadget usually comes at a
price, and it is the chief financial of-
ficer’s job to nail that price to meas-
urable and time-limited benefits. A
good information chief has to be able
to explain those benefits and engage
with the financial boss to pin down
the costs.
Given the increasing importance
of data-driven insights to grow a
business, a chief financial officer
needs to be able to understand the
digital tools that can provide es-
sential data. The chief financial
officer’s role is increasingly ana-
lytical and the chief information
officer is the best ally in this.
Getting to grips with big scary
concepts such as blockchain
will be a whole lot easier if the
financial chief has the kind of
relationship with the informa-
tion chief that allows them to ask
dumb questions.
CFO's guide to stakeholder management
An accomplished chief financial officer will maintain a solid and productive working relationship with key
members of the company to add value across all functions of the business
STAKEHOLDER MAP
CLARE GASCOIGNE
01CHIEF
EXECUTIVE
Which cliché would you like? Wing-
man? Marriage partner? Trusted
right hand? The relationship with
the chief executive is all of the
above – and the chief financial of-
ficer might also need a mind-read-
ing superpower.
The relationship between the
boss and financial chief is perhaps
the most important in any compa-
ny, and complementary skills are
a bonus. Traditionally, the chief
financial officer is providing back-
up and support to the chief execu-
tive, putting the numbers under his
or her ideas, reining in the wilder
flights of fancy by pointing out the
cost implications, and acting as a
conduit to other directors.
It’s also about acting as a deputy
because a good chief financial of-
ficer should be able to manage the
day-to-day running of the company.
So the chief financial officer needs
to understand the chief executive; to
understand the individual’s style,
quirks and vision for the company.
But this isn’t about taking a pas-
sive role; today’s financial chief
is as competent as the chief exec-
utive, able to think strategically
and should be allowed to voice an
opinion. Indeed, a big part of the
role is helping the chief executive
future-proof the company and that
isn’t the job for a yes-man or woman.
Instead, it’s about being willing to
challenge, even play devil’s advo-
cate. Trust is key; the chief execu-
tive needs to know that this is not
opposition for opposition’s sake or a
hideous C-suite power struggle, but
a vital opportunity to see the whole
picture and not get carried away
with a bright idea.
Part of the chief financial officer’s
role is to point out aspects that the
chief executive might have missed,
but without being adversarial. Part
of the chief executive’s role is to
listen to the chief financial officer
as an equal and respected partner,
and be willing to accept that what
he wants to hear might not be the
same as what he needs to hear.
A big part of the
role is helping the
chief executive
future-proof
the company
Marketing tools
should offer
an insight into
customers who any
half-decent chief
financial officer will
welcome with
open arms
The chief financial
officer’s role
is increasingly
analytical and the
chief information
officer is the best
ally in this
EXPANDING SKILLSETS
HOW THE CFO CAN MAKE THE MOST OF BOARD TIME
MULTIFUNCTIONAL CFOs
PLAN
CAREFULLY
MANAGE
EXPECTATIONS
USE
OPPORTUNITIES
THINK
CAREFULLY
USE TECHNOLOGY
EFFECTIVELY
BEING EFFICIENT WITH TIME-POOR EXECUTIVES
Activities CFOs think are most likely to be added to the finance function’s responsibilities in five years’ time, if they aren’t included today
IT
RISK MANAGEMENT
HUMAN RESOURCES
MERGERS AND ACQUISITIONS
PROCUREMENT
LEGAL
SUPPLY CHAIN MANAGEMENT
TAX
Secure the time required
to focus on the important
issues, giving priority and
quality time to strategic
discussions
For example, it may
not be possible or wise
to complete a major
strategic discussion in
one day
Use opportunities
for free-flowing
conversation; for
example, at dinner the
night before the board
meeting
Concentrate on
facilitating a meaningful
discussion; don’t
assume the 40-slide
presentation is always
the best approach
Technology is an
enabler to bring people
together; telephone
and video conferences
can often be the best
choice for time-poor
executives
Source: Chartered Institute of Management Accountants
Source: CFO Publishing 2015
35%
30%
29%
28%
27%
24%
22%
21%

05FINANCE TEAM
Having done enough collabora-
tive partnering, the chief finan-
cial officer needs to lead the fi-
nance department, as long as they
do not confuse leadership
with dictatorship.
Unlike relationships with
other C-suite officers, the rela-
tionship with the finance team
requires the direction and pro-
tection of the more junior and
less experienced members. This
is where so-called soft skills
will be most needed, often a
challenge for chief financial of-
ficers who have risen to the top
through outstanding num-
ber-crunching skills.
Of course, there’s a necessary
level of compliance as any finance
department has to be able to meet
the basic requirements of legality
and competence. But for the chief
financial officer, there’s an extra
layer of development needed to
ensure the team grows its skillset
on both an individual and group
level. It’s all too easy for the finance
chief to end up doing everything,
since they are hopefully one of
the most competent people in the
finance department, so they may
need to learn the difference be-
tween being the best person to do
the job and the only person able to
do the job.
Departmental goals should be
made clear; everyone should un-
derstand how the numbers and
reports they are so busily produc-
ing relate to corporate objectives.
Analytical and strategic thinking
should be encouraged; the team
shouldn’t be afraid to ask ques-
tions or point out mistakes. Even
bosses might stumble and make
a mistake someday, and the fi-
nance team must be trusted to
catch them.
So how will the chief financial
officer know when they’ve done
a good job? Often it’s about not
screwing up; if there hasn’t been a
financial emergency, they’re doing
OK. But an even better measure is
how often others in the company
come to the finance department
with questions, confidently ex-
pecting the right answers. Then
finance is really at the heart of
the business.
raconteur.net
04CHIEF HUMAN
RESOURCES
OFFICER
In a Venn diagram of the C-suite,
human resources and finance
have one of the biggest overlaps.
After all, payroll, hiring and firing
are all jobs that need the skills of
both departments.
Most people in the C-suite will
agree that people are a compa-
ny’s biggest asset. It has become
a motherhood and apple pie kind
of statement, and of even more
importance given the increasing
prevalence of service-oriented
businesses. A shortage of talent
can be one of the biggest inhibi-
tors of corporate growth, and it’s
up to the chief human resources
officer to understand why and
what needs to change.
If you want a great finance team,
you need to harness human resourc-
es’ ability to engage and nurture
talent; if you want a great company,
you need to apply human resources
skills to get the best people on board
and plan for future succession. No
company will grow well without
a company-wide strategy to iden-
tify gaps in the talent stream and
plug them.
But all this fabulous talent
comes at a cost, and it is the chief
financial officer’s job to analyse
and evaluate that cost. It can
often seem a brutal job, measur-
ing employees’ worth in numbers,
and this sometimes leads to cul-
tural misunderstandings between
human resources and finance
professionals. But people statis-
tics are as important to success as
any other metric.
A collaborative relationship be-
tween the chief financial officer
and human resources chief can
often be one of the most produc-
tive for a company, with demon-
strable increases in employee
productivity or revenue. In many
companies there is a welcome
sharing of the technology that
does the administrative grunt
work, freeing up employees for a
more analytical role.
As both jobs become more strate-
gic, increased collaboration pays
dividends. The division between
hard and soft skills is increasingly
blurred as both the chief financial
officer and chief human resources
officer need a broad vision to see
the best way forward.
The relationship
with the finance
team is where so-
called soft skills will
be most needed
No company will
grow well without
a company-wide
strategy to identify
gaps in the talent
stream and
plug them

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