IR 4.0 – Is The Malaysian Workforce Ready For It?

2 October 2019

Dato' Faris Yahaya

Recently, I was invited to partake in a panel session organised by the Malaysian Institute of Accountancy (MIA). With my past experience working in the Audit, Banking, Financial Advisory and Consultancy industry, the topic “Strategic Financial Management for Strategic Decision” struck a chord with me. I found that many finance professionals are still not fully aware of the Industrial Revolution 4.0 (IR 4.0) and how it affects the workforce – or specifically, their finance functions.

With the rapid adoption of digital technologies, organisations are transforming not only their structures, but also their workforce capabilities (Frost & Sullivan’s “Global Workforce Transformation in the Era of Industry Revolution 4.0”, May 2018). Also known as Workforce 4.0, today’s pervasive disruption requires finance professionals to invest further in enhancing their cognitive abilities, digital skills and technical aptitudes, complemented with problem-solving abilities and proficient resource management.

Finance 4.0: Ready or not?

While IR 4.0 has consistently made the papers over the past few years, what does it really mean for finance professionals?

Undeniably, technology has changed how businesses work and it is no different for the finance industry. As technology and globalisation trends continue to disrupt organisations, industries and the world, finance professionals’ role is morphing from what it once was – a predominantly reporting function to now a data-driven decision-centre.

IR 4.0 technologies like Internet of Things (IoT) have impact on the financial function of businesses and the industry as well. For example, devices that can be connected through the internet can facilitate accessibility and sharing of real-time financial data – saving time and money for the department as well as the company. Technologies of IR 4.0 can also benefit businesses in the following ways:

• Improved productivity: enables more work to be done at a lesser time while ensuring resources are allocated more cost-effectively and efficiently
• Improved efficiency: reduces decision-making time, enables business to conduct faster and more accurate business decisions
• Flexibility and agility: when there is space to allow for more customisation, a business is able to collaborate with customers and suppliers over their specific needs and to accommodate any constraints
• Reduces Costs: High levels of automation in IR 4.0 result in less wasted materials and more efficient operation, with the effect of a direct lowering of operating costs

Simply put, IR 4.0 enables finance professionals to access data easier, predict the profitability impact and analyse the return-on-investment. Finance professionals would be able to help companies with pricing analysis for a product that improves in functionality and can determine how the company’s production can be more effective and efficient.

These changes calls for finance professionals to adapt – and always be open to improve their way of working.

Skillsets for finance professionals of the future

So how does the role of a finance professional change, you might ask.

Finance professionals will play a central role when leadership transitions from being workflow-complacent to innovation-driven. Technology will play a significant role in executing many traditional finance tasks while at the same time generating greater insight.

According to EY’s The DNA of CFO study (2016), in order for finance professionals to meet the challenges of a changing world, they not only need to re-evaluate their own competencies and reshape their teams to help deliver wider digital transformation, but also equip their function with the right level of tools.

Technical capabilities can be trained but it takes strategic leadership to manage behavioural changes and nurture finance professionals to future-proof themselves. As the tools of tomorrow begin to arrive and play a role, the importance of finance people will not abate, but the skills they require will evolve. Finance professionals need to keep up with technological trends, not just within the finance industry, to identify the right skills needed for today’s digital-driven nature of work.

I’d like to highlight the example of how Verizon, a global MNC had successfully enhanced the skills of its finance team – so that they may be able to adapt with the digital technologies that they are enrolling in the market. They promoted strategic thinking with an emphasis on digital skills including:

• Training on digital skill-building as well as more traditional technical ones to build digital literacy and analytical prowess, especially since the two are growing more inextricably linked.
• Leadership training for employees as soon as they enter management roles. Technical expertise and strategic thinking are the fundamentals.

As we tackle on a changing business landscape, finance professionals not only need to deliver work faster, but they also must be more flexible, work with less certainty around outcomes, and work more effectively in teams than ever before. New skills around understanding and being able to use new digital technologies have become critical to success. But more importantly, finance professionals also need a different approach to work – often referred to as the digital mindset.

As part of our own journey towards inspiring change at ORANGEBEAM, we are fully prepared to work together with relevant parties in advocating the need to create intentional disruption and ensure our talents are IR 4.0-ready.