Next Generation Financial Executive New Competencies, Converging Disciplines, Expanding Roles

Paul McDonald Executive Director RHI Management Resources

The New Bottom Line in a Changing Profession Shifting Roles –Accounting becomes “knowledge services” –From reporter to forecaster –The new CPA New Requirements –The convergence of IT and accounting –Critical skills –Education essentials

The New Bottom Line in a Changing Profession Expanding Opportunities –Consulting as a career option –Growth areas in finance –Hot specialties Trends and Transitions –Changing demographics –New work environment –Employment outlook

Accounting Becomes “Knowledge Services” The Past... –Compile and present data, conduct audits, assurance work –Debit/credit function –Report on operations –Past-event oriented, historical perspective The Future... –Interpret and convert data into a predictive tool –Information management –Assist with planning and decision making –Forward-looking, visionary, strategic

Accounting Becomes “Knowledge Services” Responsibilities outside the scope of traditional functions will occupy 37% of a senior accountant’s time in five years. Source: Robert Half International survey of 1,400 CFOs

New Responsibilities CFOs were asked, “In which of the following areas do you foresee the role of CFO changing the most over the next five years?” Source: Robert Half International survey of 1,400 CFOs

From Reporter to Forecaster The next generation of financial professionals will: –Analyze existing data and past performance –Evaluate economic and market changes –Communicate financial knowledge and insight to nonfinancial audiences –Provide advice that helps a company position itself for continued growth and success –Influence strategic business decisions

The New CPA From Backroom to Boardroom Must Wear “Two Hats” –CPA credential plus specialization CP “A” as in “Advisor” –Information technology –E-commerce –Assurance services –Investment/asset management, securities

The New Accounting Firm “Boutique” or “Niche” Firms Increase –Investment or asset management, securities –Advise businesses on technology initiatives In the next 5 years, 39% of CFOs expect electronic commerce to be the area of greatest expansion for public accounting firms. Source: Robert Half International survey of 1,400 CFOs

The Convergence of IT and Accounting Automation of A/P, A/R The Rise of Integrated Systems –Implementation of new applications –System integrity and security –Data mining and knowledge management The Internet: Engine of Transformation –Safeguarding assets in the digital realm –New methods of service and delivery –Web-deployable applications

The Convergence of IT and Accounting CFOs were asked, “Which one of the following types of skills training are you most likely to invest in for your internal accounting and finance staff in the next two years?” Source: Robert Half International survey of 1,400 CFOs

Critical Skills “Which skills will be most important for financial professionals in the future?” Source: Survey conducted at IMA 2000 Conference

Critical Skills Technical –Programming languages –Spreadsheet, database, analytical software –Internet engineering –Optics and wireless technology –Application Service Providers (ASPs) –Online assurance and security

Critical Skills Communication –Written and verbal; fluent in foreign languages –Translate data for nonfinancial audiences Interpersonal –Diplomacy, persuasion, negotiation skills –Teambuilding, coaching, mentoring Managerial –Strategic planning, decision making –Manage projects, motivate people

Critical Skills CFOs were asked, “Which of the following interpersonal skills is most valued in accounting candidates today?” Source: Robert Half International survey of 1,400 CFOs

The Value of Soft Skills CFOs were asked, “Other than accounting and finance knowledge, which one of the following qualities do you believe contributed most to your attaining the role of CFO?” Source: Robert Half International survey of 1,400 CFOs

Education Essentials Certification –85% of CFOs said they believe a certification such as a CPA or CMA credential helps professionals climb the corporate ladder. Ongoing Professional Development –52% of CFOs said the most effective way to build nonfinancial skills is through classes and seminars. Source: Robert Half International survey of 1,400 CFOs

Consulting as a Career Option Consultants are catalysts for change, expert advisors, strategic planners Consultants are in demand for: –Systems implementation & integration –Mergers & acquisitions –Business advisory services –Tax initiatives –Business process improvement –International business expansion

Consulting as a Career Option 75% of CFOs consider consulting an attractive career option. Source: Robert Half International Survey of 1,400 CFOs

Consulting as a Career Option Can you manage projects and people? Do you have industry-specific knowledge? Do you have experience with financial systems conversions and upgrades? Do you think on a “global scale”? How are your marketing skills?

The Use of Consultants as a Business Strategy Consultants ease staffing and budget concerns. Consultants provide value-added services. Consultants often help implement the solutions they recommend.

Growth Areas in Finance Strategic Planning and Management Cash Flow Forecasting and Analysis Technology Procurement Tax Systems Business Performance Measurement

Hot Specialties Information Technology Services Assurance Services Forensic Accounting Personal Financial Planning E-commerce Initiatives Environmental Accounting International Finance

Changing Demographics 58% of CFOs believe the number of women who hold management-level accounting positions will increase in the next 5 years. Source: Robert Half International survey of 1,400 CFOs

New Work Environment 50% of CFOs say it is likely they will allow their accounting staff to telecommute by % of CFOs say the greatest source of workplace stress is rising workloads. Increased use of flex-time, job sharing Source: Robert Half International survey of 1,400 CFOs

Employment Outlook The U.S. Department of Labor’s Bureau of Labor Statistics predicts that employment demands for accounting professionals will increase 10 to 20 percent by 2008.

Employment Outlook CFOs at mid-sized firms ($100 to $250 million in revenue) earn average starting salaries in the range of $115,750 - $163,000. CFOs at large firms ($500 million + in revenue) can earn upwards of $250,000 annually. Source: 2001 Robert Half and Accountemps Salary Guide

Next Generation Financial Executive New Competencies, Converging Disciplines, Expanding Roles