Role of a Chartered Accountant in Business Transformation

CA KiranKumar.K , Last updated: 27 January 2020  

'Transformation' is the fundamental shift in the way we feel, think and act. I am trying to deal with this in relation to business organizations in my article here. Transformation is beyond normal change or a simple alteration - Transformation starts with ideation and ends with a real tangible benefit. Transformational objectives are not very different from organization policymaking and thereby materializing and having clearly measurable outcomes through implementation. Transformation often complemented sometimes by integrating Information technology and it should not be misunderstood that it only relates to IT and Automation of routine business aspects. 

Role of a Chartered Accountant in Business Transformation

CAs' and their relevance in Business Transformation

It's well-known and agreed fact amongst business communities that Chartered accountants and their equivalents are well respected in their understanding of finance, accounting, reporting, and taxation matters to name a few and their sound advice in respective areas be it strategic to match the vision of the organization or managerial to run the daily business. Logical and analytical thinking coupled with fact-based data that a CA effortlessly brings to the table in any discussions and meetings proves this. I give one caveat as always, it's not just the understanding of the domain but the articulation of it to a non-finance leadership to achieve a common goal.

Before stressing upon the areas that CA's help in Business Transformation projects, one must understand the broader scope of Business Transformation and related Finance Transformation as a subpart of the overall strategic agenda. CA's have the ability to demonstrate the required capacity in doing transformation in finance and accounting, including reporting and related sub aspects like tax where they show their deep domain expertise.

Transformation is not a one-off job and it's just not related to information technology, it's the daily breath. The Transformation strategy normally tackled as a top-down approach in any organization where it means the strategy agreed at top management/board levels is driven by the execution or implementation managers through a deep project management approach.  

Transformation may start with problem identification in the business and preparing a business case, strategy formation, and implementation. Leading transformation needs leadership qualities to drive the change and people involved. Future belongs to those CAs who are good at being curious, few ideas below -

End to End understanding of the Business Processes - including financial, operational and some non-financial aspects and know them beyond that is not clearly visible.

Deep Industry knowledge and advanced economies in which the business operates - i.e., macro to micro.
Supply chain knowledge specific to the industry - upstream-backend and downstream-front end.
High-level knowledge of reporting, taxation and commercial laws specific to the industry - both direct and indirect and at global and local levels - when it comes to “tax focus of transformations' (example of GST compliance to potential blockchain strategies for greater transparency of commercial contracts and payments)
Understanding the outside world of the business (like competition, public/private funding, ongoing research & development aspects related to the industry in which the business operates)
Always see the big picture linking with the lowest level of detail. Highly analytical yet emotionally intelligent in the application.

Business Challenges

Doing business and making money is not always linear, especially when the business dynamics are volatile, uncertain, complex and ambiguous (VUCA). There are many issues one needs to focus on for resolution or firefight daily. Planning, Analysis, Reporting, Compliance domains are normally recognized as a back-end to the business but no one can ignore the value addition that it brings for right and informed decision making and taking corrective action wherever necessary, and probably this is the best area to understand the business thoroughly. As there is no finance without business and no business without finance.

There is a huge exchange of ideas going on worldwide in various forms on big data, blockchain, AI or robotic process automation and data visualizations for quick decision making. Take the example of Big Data, what is “big' for one organization may be “tiny' for another. Big data analytics, business intelligence using ERP or beyond are some of the key “Information Technology related transformations' if supplemented in “finance transformation', the results are many. Chartered Accountants dealing with transformations should understand a bit of everything that goes under the name of big-data and decision analytics. For that matter finance leaders should also be very proactive having an eye on the trends that can impact their transformation journey in the organization.

Old generation CAs are equipped with the knowledge in their traditional areas like Accounting, Tax and Auditing the manufacturing or service concerns but for more than a decade, most of the industries are tied up with IT and ITES in many different ways. Transformation is not driven by external forces, but it always starts with making the job easier for everyone.

As mentioned before, functional finance areas are only a subpart of the overall agenda of the business. CAs can better understand the customer side and vendor side of the business in the supply chain. ERP related business analytics have a greater impact on risk assessment and data analysis. Transformational thinking helps double the benefits if focused on these areas. Co-ordination within the company and cross-functional dialogues would help expedite achieving the transformational goals.

Challenges to Opportunities


Top Management that can drive the transformation objective depends on the need of the organization. Simply adopting the best practices from the market or the industry may be fatal as the importance is on business requirements rather than copying someone's best practice. A pure “Information Technology Transformation' can be monitored by the Chief Technology Officer. And for sure the “Finance & Tax' related transformation is and should be monitored by Chief Financial Officers in the organizations. Transformation is not a one-off job but needs to bring people, processes, and technology together for achieving synergy.  CFO's may need to take tough decisions on his team's job rotations including hiring and firing people if required in this journey. Transformation is not just to endure but to flourish.

CFOs and Finance head better know the risk and rewards of transformation strategies in the F&A domain and they are good at balancing tight rope walks. Their experience in these areas is always in demand.

Transformation is a mindset. It's not easy for a traditional mind. One should be challenging the status quo and have a very clear vision and strategy in place. It cannot be co-equated only with technological changes or automation of routine tasks, it is tapping the unprecedented. Finance and Tax transformation normally go hand in hand, unless the specific requirement triggers only finance or an only tax requirement.

Let's take an example of a new legal requirement (tax) in a country that also causes to reshuffle the pricing of a product (finance) and also dealing with the supplementary finance and accounting issues, which in-turn has modifying effects in sales & marketing departments as required. A single internal idea or an external force can cause to set up a transformational goal that needs to be implemented well in time.


Way forward  

CA's (specific to the finance leadership in an organization) are facing challenges in their day to day activities (compliance - the least said the better); they should seek support from Owners of business and negotiate or communicate well on their ideas for value delivery. Gone are the days where they sit alone on their desks to complete an excel file or a computation; gone are the days working in silos and contributing individually, they should think and learn from cross functions - starting from procurement, production, and sales & marketing departments to better align their planning strategy and implement it better to tackle change resistance and a comfort zone mindset.

CA's must question themselves and their peers, if they completely know the in-outs of their organization, business, and the industry. It's high time to think about the change and disruption that's fast coming. CA's have to note down what is stopping them and their teams to think beyond and challenge the status-quo thereby chalking out a strategy for implementation, it can be as minimal as a small business process improvement in their own areas to start with and then trying to align with other departments goals to ultimately achieve the overall corporate strategy.

All the Best!!!

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CA KiranKumar.K
Category Career   Report

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