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Making headway in a volatile world - Focus on growth, people, risk and business transformation - EY - Australia

Making headway in a volatile world

Focus on growth, people, risk and business transformation

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What are the biggest challenges facing your business?

What are the biggest challenges facing your business?

Base: All (247) ANZ (211) Asia (136)

How much of a priority are business transformation programs compared to three years ago?

How much of a priority are business transformation programs compared to three years ago?

Note: Thirty six percent of Asia-based CFOs see business transformation programs as more of a priority than three years ago.

77% of Asia-based CFOs agreed or strongly agreed that the shift from focusing on financial performance to being able to manage a complex stakeholder universe is one of the most difficult challenges for financial managers.

Across the region, CFOs highlighted four key focus areas to address in order to respond to the macro-economic environment and ensuing challenges for business. According to the survey, CFOs are addressing the growth challenge, attracting and retaining talent, managing risk and ensuring that the business transforms to achieve competitive advantage.

Achieving growth

CFOs believe there are opportunities in rapid growth markets. This organic growth is a key opportunity to leverage over the next few years.

CFOs are selecting more conservative growth strategies while stakeholders are expecting evidence of forward cash flows that match the aggressive 5-10 year growth rates achieved before the global financial crisis.

“The biggest challenges are achieving growth and increasing shareholder value.”
Lawrie Tremaine, CFO, Woodside Energy Ltd

Managing risk

Uncertainty is driving demand for higher quality risk information but CFOs struggle to make a business case for investing in this often intangible outcome. Risk management will continue to be a key priority for CFOs while it remains high on the board’s agenda.

CFOs are also better aligning treasury risks with the risk appetite of the board and senior management contributing to stronger governance and controls.

“Speed to market is critical to business success. Our risk management approach is dictated by the size and nature of the project.”
Richard Murray, CFO, JB Hi-Fi Limited

Attracting and retaining talent

Challenge to find savvy, commercially astute individuals. Uncertainty is also changing the required skill set from technical to more commercial skills. Good financial controllers are also required for the CFO to take a more strategic advisor role.

Many companies are paying premiums particularly in regional hubs such as Hong Kong. Employers need to tap the broader national talent pool and build the capacity to draw on and integrate critical skills from the global market.

“Talent is out there. The issue is finding the right talent, the right attitude and fit — skills can be developed.”
Paul Anderson, CFO, Ten Network Limited

Business transformation

CFOs need to lead business transformation to help their companies adapt to changing market dynamics. They need to transform their cost structure to be more flexible to take advantage of growth opportunities.

Four main inhibitors to transformation are: cultural resistance to change, lack of board support, internal politics and lack of a formal process to support transformation.

Another key challenge was the finance function is not traditionally at the forefront of business transformation which often prevents programs being supported by the proper metrics.

“Increased volatility in financial markets, competition and thinning margins are making it extremely important for the organisation to build a sustainable business model to enable the business to deliver the financial results expected by stakeholders.”
Asia-based CFO

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Erin Thomson
Marketing Leader – CFO Program
+61 3 9288 8439
For the full report, please submit your details here.

Making headway in a volatile world: the challenges of achieving sustainable growth

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