Role of CFO : “Forecasting and budgeting are more crucial than ever”

http://cfo.co.za/profiles/blogs/bikash-prasad-cfo-olam-international-forecasting-and-budgeting-ar

How do you perceive the role of the CFO has changed in the last five to ten years?
The role of CFOs has changed from a bean counter to strategic business partner, from accounting to decision-support and strategic planning.

Due to emergence of various international financing tools, increased focus on cost control for survival due to cut-throat competition, FP&A for informed decision-making, risk management processes in the most volatile times, stricter corporate governance requirements, investment decisions and M&A due to existence of both opportunities and threats have completely changed the profile of CFOs in and expectations of organizations from them.

How do you see the role of the CFO evolving in the next five to ten years?
The role of CFO has already started evolving from accounting to business support. In coming years, CFOs would play even a bigger role right from designing strategies for the businesses to its full implementations. CFOs may be called as CVOs (Chief Value Officer), being the custodian for preserving and creating values for the organization.  We may also see a time when there would be no month close exercise but online availability of financials all the times through advanced applications and implementations of IT systems.

Would you say that accurate forecasting and budgeting is still feasible for a financial department in today’s tumultuous financial markets?
In the current volatile times with the squeeze on resources (working capital, fixed capital, risk capital etc), forecasting and budgeting would be more crucial than ever. The limited resources will have to be deployed with proper budgeting and allocations amongst various BUs to get maximum returns and productivity. Cash is king in credit crunch scenarios and hence cash flow forecasting would be vital to plan and properly utilize the financial resources.

We deal with volatility in credits, currency and price using the Value at Risk model by putting risk limits in terms of both quantum and tenor. Use of derivatives and hedging techniques are must to handle these volatilities.

Which skill(s) do you think a finance professional should master to be most successful in his work? Please give an example when these skills are an absolute requirement.
I would suggest following skills to become successful in our career –

a)      Domain Knowledge of finance
b)      IT savvy
c)       Full understanding of business models and insights
d)      Stakeholders relationship (internal as well as external) and excellent communication skills
e)      Leadership and People skills
f)       Continuous up gradation of knowledge

Which achievement or project in your business career are you most proud of?
I feel excited about the number of M&A projects handled and closed by me in OLAM, right from identification of targets to project feasibilities to valuation to DD to deal closure and finally post merger integration (PMI). This helped my region to grow exponentially and leave behind the peers.

The other critical achievement was to get my company in Ghana the BEST TAXPAYER AWARD for 2011 by Ghana Revenue Authority through high level of corporate governance, valuable inputs to authorities resulted in increase in their revenues etc.

Please name something – a procedure or process for instance – that was implemented in your company before you were appointed CFO, which you changed after you took the position of CFO.
After I took over as Regional CFO, I revamped the financial closing and business support processes through implementation of new software developed in-house with the help of our central IT division. This ensured standardized reviews (whether a new FC/FM in the organization or a veteran) through defined checklists for financial closing. It further ensured standardized reporting across products and across geographies.

It also had features as group consolidations, web-based applications, central repository, and Excel look and feel with multiple views, process completion attestations, and online business support reports. This was implemented across organization after overcoming the initial resistance to change.

Who is your role model in life and why?
I respect Mahatma Gandhi and Nelsen Mandela for their dedication, focussed approach, outcome orientation, optimism, demonstration of great leadership and people skills, clear communications, politeness but with firmness. If we follow these traits and the approach in our lives, we can achieve what we want to.

What vital piece of advice would you give young ambitious finance professionals?
Take yourself seriously in all the jobs assigned to you, work with integrity and required aggression, develop business understanding, be a good listener with your team and develop mutual trust,keep yourself updated with latest happenings in the finance world.