CFO = chief future officer?

CFO = chief future officer?

The traditional role of the chief financial officer (CFO) is slowly changing from someone crunching numbers behind the scenes to being in a more prominent position at the forefront, driving the company's future plans.

This was an observation by Koufu's CFO Chua Sher Lin during a panel discussion at the launch of American Express Singapore's Chief Future Officer Survey findings titled "Game Plan 2020: Using change to your advantage".

The survey polled 253 CFOs of small and medium-sized enterprises (SMEs) from across all sectors.

"Increasingly, the CFO role is becoming more strategic. It's being the GPS (global positioning system) to the company by giving a direction or plan for the team to move towards. In doing so, you can influence the business," said Ms Chua.

But while the survey found that SME CFOs increasingly saw the need to plan for the future, most remained mired in day-to-day "fire-fighting" instead of looking ahead.

Some 87 per cent of the respondents said that their immediate priorities were more important than mapping a long-term strategy, while 62 per cent of them did not have a game plan to stay competitive.

When it came to challenges faced by SMEs, tightening cashflow and the rising cost of doing business topped the list at 38 per cent. This was followed by 26 per cent who said that local market economic conditions was their biggest headache.

Not surprisingly, improving cash flow management is the top priority for 39 per cent of SMEs in the coming year, followed by mergers and acquisitions at 35 per cent and selling the business or finding a bigger home for their company at 32 per cent.

To maintain their competitive edge, 65 per cent of SME CFOs identified e-commerce as the biggest factor, followed by agility and ability to adapt quickly at 52 per cent.

Panellist Koh Tat Liang, assistant executive director, SME Committee & Capacity Building Division, Singapore Business Federation, said that e-commerce has yet to gain much traction among SMEs here because they are still "embroiled in their brick and mortar" mindset.

"It's time SMEs look beyond the domestic market. A lot of our retailers are so comfortable with what they are doing, they don't see the loss of opportunity in what e-commerce can bring in terms of increasing market share. I would urge companies to think long term and to get out of their comfort zone," he added.

But not all is doom and gloom - 61 per cent of SMEs were confident about sustaining their competitive edge. They found Singapore an attractive place to do business, with 26 per cent naming its tax environment and business-friendly government support as the biggest advantage.

Nigel Fox, vice-president and general manager, Global Corporate Payments, American Express Singapore, said: "There's no doubt SMEs need a long-term game plan to manage risk during unpredictable times. What's also crucial is an organisational culture adept at being agile, supportive business tools and technology to automate processes, and cash flow management solutions."

He added that local SMEs must constantly seek better ways to manage their short-term needs to free up resources to create a long-term plan. Investing in technology to boost internal efficiency and improving cashflow management are some steps that SMEs can take to future-proof their business.

Amendment: Due to an editing error, an earlier version of this story incorrectly said that 5 per cent of SME CEOs rate agility and ability to adapt as the second biggest factor to maintain their competitive edge. It is in fact 52 per cent. The article above has been revised to reflect this.

This article was first published on Sep 15, 2016.
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