Reem Al Anbari, Chief Financial Officer, Finance Division of ADNOC
What are the current top 5 challenges faced by CFOs today in the Middle East?
I believe that the current top 5 challenges faced by CFOs in the Middle East are:
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How to constantly come up with business innovations, strategies, balance the need for efficiency with smart investments and pursue creative approach to partnerships that will unlock substantial value and free up cash within our business to increase our global competitiveness.
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CFOs also need to challenge themselves and other key players in the business to keep abreast with the radical technological revolution and disruptive innovation to maintain cutting-edge advancements in running the business.
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How CFOs play a critical role not only in ensuring finance and accounting functions but also perform a variety of roles in interfacing with other business players such as IT, HR, Procurement, Investments Controllers, etc.
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CFOs, as key strategists, will be required to continually come up with ways on how to maximize use of our capital- both human and monetary to create added-value to the company. We are expected to be not just the accounting experts but also as communicators, leaders and partners who are involved in all aspects of the business to maximize profit and optimize cost and pursue business growth with adherence to the international regulatory and compliance framework and with the least risk exposure for a healthy business practice.
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And to do all these with limited or tight resources/budget, is definitely a big challenge, as well.
What would the practical applications be to the aftermath of VAT implementation?
We need to be technically well-versed on the VAT implementation otherwise we could face some issues for filing wrong returns, which our companies can be penalized for.
Businesses should have a Taskforce or Implementation Committee led by the chief financial officer and Corporate Governance which have jurisdiction over all business departments, not just finance to oversee the VAT issues. Sales and Marketing, Human Resources, Procurement, and others will need to modify their systems to become VAT-compliant.
How can CFOs today take up the challenge to staying relevant in the digital age?
I believe that to learn selling skills would be an advantage for CFOs. Another crucial skill for CFO is to have strong understanding of technology and how to leverage it because it keeps on changing fast and we need to keep abreast with it to make us more functional and pro-active.
Aside from this, to go for international assignments and secondments are really good exposure to learn more technical and leadership skills and great depth and scope of business knowledge. CFOs need to be on the frontline to speak the language across the business so they are always informed and prepared which will help tremendously in enforcing their influencing and leadership skills and added-value to the company.
CFOs need to be effective interpreters. We need to be able to translate numbers into meaningful information and story so we can relay more effectively the key insights to all players to fuel sustainable growth in the organization.
How can CFOs and CEOs align further together with regards to the mission and organizations’ objectives?
In my experience, the role of CFOs nowadays has become more multi-faceted and demanding than before.
Previously, CFOs were only “accountants”, so to speak, who ensure that the organizations finances are in order and all accounting procedures are adhered to. Today, CFOs have taken a broader spectrum of responsibilities. We are now also expected to be:
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Key strategists and leaders helping the CEO and other executive teams in decision makings
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Effective communicators promoting results and convey business successes and growth both internally and externally
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Catalysts of Change ensuring we adapt to latest global business trends
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Business advisers, operators and partners ensuring that business run smoothly and according to the strategic direction and innovations the company would like to implement
CFOs should now be expert on Enterprise Performance Management (EPM) process including strategy and business planning and management reporting. We are also expected to cover the full spectrum of risk and associated risk management frameworks, processes and systems of internal controls, treasury functions and oversee and understand the impact of International Financial Reporting Standards (IFRS) and accounting changes on existing and future models and metric. Likewise, CFOs must play the lead role in capital management which includes identifying and prioritizing investment opportunities and understanding the various financing options available.
What is your best advice for CFOs to guide their finance teams through times of uncertainty?
I would advise CFOs to continually learn leadership, technical, communication and influencing skills. They also need to constantly upgrade their technological know-how, to be more focused and engaged on people management, risk management, change management, project management and development of effective business strategy and innovation to be able to call themselves successful CFOs.
They also need to broaden and strengthen their networking with other CFOs and share experiences with them regarding their business involvement. Sharing of knowledge I believe is very important to know and understand the best practices and new trends in the business.
Rizwan Chowdhari, Chief Financial Officer, ADSB
What are the current top 5 challenges faced by CFOs today in the Middle East?
1. Uncertain macro conditions as a result of oil and political volatility
2. Attracting & retaining talented employees
3. Identifying and implementation of continuous improvement initiatives
4. Transforming traditional “accounting” organizations to “finance” organizations
5. Vision alignment of what is best for the Company between other members of the Senior Management Team, the Board and the Shareholders
What would the practical applications be to the aftermath of VAT implementation?
I think organizations in the Middle East at this point in time are just doing the bare minimum to comply with VAT regulations. This is because certain aspects of the regulations are expected to change and there is still a level of unclarity and so called “grey areas” in the regulations. Once these issues are all ironed out and all the countries in the Middle East are at the same level, we will only then truly be able to assess the practical applications
You will be presenting at the upcoming event. Which topic in the event (other than your own) interests you most? Why?
“Era of Digital Finance” – CFO’s and their organizations are yet to fully embrace this in the region. This is the future in my opinion and the more we talk about it and share stories of success and learnings
How can CFOs today take up the challenge to staying relevant in the digital age?
Have the willingness to take a risk, try pilot projects and if successful then go for larger implementations
What are your views on the strategic approach to transfer pricing?
I believe that having an effective internal transfer pricing in an organization is essential. This increases accountability, enables decision makers to focus on the real issues at hand, which in turn should increase overall corporate performance
How can CFOs and CEOs align further together with regards to the mission and organizations’ objectives?
To me this alignment is of utmost important. As a strategic partner to the CEO, the CFO should have a say in what the organization’s objectives should look like. The CFO should have a seat at the table when these objectives are being discussed and finalized with the Board / Shareholders. Once corporate objectives are finalized, it’s extremely important for an organization’s leaders to cascade the objectives to their individual teams so that everyone is working on the same page and as such the chance of success is higher.
What is your best advise for CFOs to guide their finance teams through times of uncertainty?
Don’t settle on just “how things are”.. be motivated and always look for opportunities to become better and be open to change… whether it be something as simple as taking an online course to upgrade a skillset or recommending a new way of doing something which in the long run will save time and effort for an organization
Marta Wronska, Former Head of Finance – Hala Group, Etihad Airways
What are the current top 5 challenges faced by CFOs today in the Middle East ?
Middle East is a very dynamic region and so the main challenges faced by the CFOs today relate to this dynamic. With the implementation of VAT many organizations face challenges such as technology changes to facilitate the VAT compliance, access to qualified resources who can drive the process internally but also building a general understanding of VAT concept across the organization.
Innovation is always one of the key focuses for the Middle East Companies and therefore in the era of global digitalization it is more than ever important to not only keep up to day with new technologies such as blockchain or AI but to stay ahead through continuous investment in innovation. At the same time, finding the right, balanced level of investment in R&D and innovation is one of the challenges faced by the CFOs these days.
More global challenge faced also by Middle East CFOs is managing the data – both in terms of GDPR compliance as well as being able to quickly and accurately use the big data capabilities developed in the recent years. With many Middle East companies investing heavily in technological capabilities to collect and store data – being able to use databases proficiently and leverage them for the daily business decisions is key to the modern CFOs.
Another global challenge faced by Middle East CFOs is the cybersecurity. Within the businesses where the reliance on technology is high, cybercrime and fraud preventive framework is the key focus. With the global cost of cybercrimes increasing almost 5% YoY, organisations must ensure they have complete framework for detection, prevention and mitigation of the cybercrimes.
Last but not least, careful observation of the global macroeconomic trends has always been high on the Middle East CFOs agenda but it is now of the utmost importance. With the domestic economies being very sensitive to the oil price fluctuations, it is no longer only oil and transport industry which are monitoring the trends regulary but any CFO operating in the Middle East markets.
What would the practical applications be to the aftermath of VAT implementation ?
VAT implementation in UAE was a very smooth process despite initial concerns whether the timeframes are too tight. The change is always challenging and building the tax awareness among the organization takes time but the authorities ensured that the filing process is straight forward.
You will be presenting at the upcoming event. Which topic in the event (other than your own) interests you most? Why?
I am especially looking forward to the “Chief Future Officer: Era of Digital Finance” session which will focus on the blockchain technology. Working with the Loyalty businesses under Etihad Aviation Group I have been watching the blockchain technology very closely and assessing it’s application to the loyalty business.
What are your views on the strategic approach to transfer pricing?
Many multinational Middle East companies already adapted transfer pricing framework and developed internal policies but the big challenge is yet to come. Often, introduction of the transfer pricing is perceived as extra cost but if applied correctly it can benefit the organization by reducing tax burdens.
What is your best advise for CFOs to guide their finance teams through times of uncertainty?
A management guru Peter Drucker said “Culture Eats strategy for Lunch” and I strongly believe in those words. In times of uncertainty the winning organizations are the ones whose teams stick together. Building strong corporate culture and creating bonds between team members is the key. Removing silos through open communication, feedback culture and reduced hierarchy structures is a good foundation for the strong teams.
These esteemed speakers among other industry experts will be present at the 10th Annual MENA CFO Conference Dubai 2018. For more details, contact BernardineM@marcusevanskl.com or log on to http://www.marcusevans-conferences-middleeastern.com/marcusevans-conferences-event-details.asp?EventID=24454&SectorID=2#.W2wojCj-jIW