CFOs reveal how they’re approaching 2022

As 2022 unfolds, CFOs are prepping for another year of turbulence, already feeling the impact of Omicron on the workforce, global supply chains and ongoing restrictions.

But this once again provides finance leaders with the opportunity to drive change and transformation in their finance function and broader organisations.

Three leading CFOs in the cut and thrust of it and a finance transformation consultant came together for a CFO Magazine Lunchtime Live panel discussion to share with an audience of over 150 CFOs and finance leaders how they’re each approaching 2022.

The panel includes Fiona Keys, CFO Pacific, CBRE, Rowena Burgess, CFO, Starbucks Australia, Ralph Stein, Finance Transformation Consultant, CCH Tagetik Wolters Kluwer and David Spong, CFO, ANZA, Ericsson. The panel discussion was facilitated by James Solomons, Global CFO at ASX Listed, Xref.

Being an election year for Australians and one where we will see interest rates rise for the first time in over a decade, the panel of finance and technology shared how the finance function is keeping pace in a rapidly evolving world of hybrid workplaces, and an ever-accelerating digital economy.

Fiona Keys, CFO – Pacific | CBRE

Keys reveals that CBRE focused on the style of recovery, using the GFC as a guide, but admitting that crisis was quite different. It’s been a tick-style recovery, she says.

“For us, we’re experiencing tail winds into 2022. We’re going to continue to look at growth opportunities, organic growth and new markets and sectors, and hopefully getting a few M&A deals finalised this year,” she says.

The CBRE finance team will also decommission a legacy invoicing tool and rolling out something new and removing that high level of admin due to clunky systems to capitalise on Salesforce in a more user-friendly fashion to build out our forecasts in the future, she reveals.

Keys was asked about the interest rate rise, which she admits will create some volatility in the property market. That will more likely impact the capital markets, while overseas investors are still expected to favourably consider investments in Australia with current exchange rate considerations.

“An increase in interest rates will impact the residential sector. CBRE Australia has a large residential valuations business, so we are watching that closely. The reality is that affordability of residential housing with an interest rate increase is going to become a little bit out of touch for a number of people, so whether that takes some of the heat out of the market, and impacts volumes is more than likely,” Keys says.

Also keeping an eye on the Federal election, looking back at how previous elections impacted markets. Coupled with an interest rate rise, there could be some volatility, she says.

She adds: “Debt is still quite cheap in capital markets, even though interest rates hikes are likely. But anything is possible at this point, you don’t rule out any scenarios.”

Also keeping an eye on the Federal election, looking back at how previous elections impacted markets. Coupled with an interest rate rise, there could be some volatility, she says.

She adds: “Debt is still quite cheap in capital markets, even though interest rates hikes are likely. But anything is possible at this point, you don’t rule out any scenarios.”

Ralph Stein, Finance Transformation Consultant | CCH Tagetik Wolters Kluwer

Stein has implemented technology and finance transformation for some of the largest companies in Australia and is now consulting to the Office of the CFO. 

He’s hearing that CFOs are wanting to bring in AI and machine learning and take away some of the manual and mundane tasks to step into a better scenario planning role.

ROI on data investment in a company varies greatly, he says. “Also, if you don’t do anything, what does that cost you, if your competitors are doing it? And if you don’t have the ability to data mine your gold and give that gold to management, you’re still going to be that person crunching numbers,” Stein says. 

A common misconception is that education is seen as a one-off thing as a tick-box exercise. “That’s not right. You’ve always got to be offering education for new and existing employees.

The finance function in today’s environment due to the constantly changing environment. Change happens monthly, weekly. For example, the pandemic. You’ve got to be able to offer regular education,” Stein says.

Rowena Burgess, CFO | Starbucks Australia

Burgess joined Starbucks as CFO in March 2020, just as the world went into lockdown, admits she’s been battling curve balls given the pandemic has impacted on the hospitality sector so heavily.

“Lockdowns meant a complete change in the way we had to run our business. Our entire business structure had to change.

“We are renowned for international visitors, so we had to look at what would happen to our team members, government assistance programs,” she says.

Nothing else scares her anymore, and her team is more capable of being adaptable, she admits.

While there were some extreme cost increases on the business, new opportunities in the M&A space and property market also presented themselves. Expansion plans can run a lot faster than what we had anticipated previously, Burgess says.

A war on talent has played out in the market for quite some time, raising issues. Starbucks managed to have all stores and entire teams employed during Covid, which speaks volumes for how employees were treated during Covid, and how they’ve come out of it to date, she says. 

“Understanding how to create a flexible working environment, and showing you where you’re advancing the finance team is critically important. When they’re involved in something that’s growing and up to date with technology creates a really great employee value proposition beyond financial,” she says.

It’s about working smarter, she says. “If the economy isn’t going as fast as the fight on talent, then no one is going to want to pay higher prices on items, so you need to find those efficiencies, working smarter in the back end, or just understanding those pain points, and hopefully most have identified them during the Covid period and are working smarter going forward,” Burgess says.

David Spong, CFO ANZA | Ericsson

Spong also added his thoughts to the conversation, sharing his priorities for 2022.

A key priority within Ericsson right now is contemplating what hybrid working will look like. “Hybrid way of working means different things to different people. We feel it’s important to empower our people and managers to work together to understand what it means to employees, teams and the business”

Currently testing different scenarios across the 1,300 or so staff across Australia and New Zealand, teams are exploring what hybrid work means to individuals and teams taking what they’ve learnt from the past two plus years working virtually from home, but also looking at the role office spaces will continue to play as a place to interact, energise and collaborate.

“Our physical workplaces have a critical role to play in creating a place for our people to interact with each other. They offer tools to collaborate, and we’re excited about the role they will play, together with our hybrid and virtual models, as we look at what the future of work will be.”

Automation and digitisation and continuing to elevate and integrate these tools across the business also opens up another set of discussion of how much further it can go.

“I think we’ve been great getting the tools in place for our teams, but this is just part of the journey; we recognise there’s more to explore and refine in how these are being used to ensure the optimal level of integration and uptake.,” he says.

Sustainability is also a big priority for Ericsson, he says. “Businesses need to understand what their sustainability plan is now and into the future”

This opens up a range of questions for companies around what their fundamental goals are as a company.