The business world is changing. Robotics and artificial intelligence are set to revolutionise our work as management accountants, and virtual and augmented realities will have a role, although experts differ on their relative benefits. In many ways, technology is rewriting the rules of business and will continue to enable new business models to flourish.
As management accountants, we have a pressing need to identify the drivers — globalisation, geopolitics, and consumers' empowerment, to name three — that will impact businesses. Many organisations look ahead only 18 months, but we need to be on the cliff tops scanning the horizon five, ten, and even 15 years out. We must understand that events that seem way into the future, for example, global warming, might have a much more immediate impact on consumers, a company's suppliers, or people's choice of employer.
Our CGMA Competency Framework includes risk management as a key part of making strategic decisions for long-term business success. According to our 2017 Global Risk Oversight Report, risks are increasing in volume and becoming ever more complex. There is across the globe, however, a mixed picture of preparedness for these threats. In Europe and the UK, around one in five organisations has complete enterprise risk management processes in place; in Asia and Australia the figure is 30%, and in the US it's 26%.
Businesses also have some way to go in integrating their risk management efforts with strategic planning — and only a small proportion (less than 20%) of organisations in Europe, the UK, and the US say their risk management is providing them with a unique competitive advantage, our research shows.
Central to an enterprise's success are the building blocks of skills, knowledge, and processes. Companies still have further to go on making capability development an integral part of strategy; they either don't build it into their plans or are too prescriptive about what people should do differently. This is the view of consultants and authors Ron Ashkenas and Logan Chandler, set out in a recent Harvard Business Review article, "Your Strategy Won't Work if You Don't Identify the New Capabilities You Need". They conclude that leaders should identify opportunities for teams to create or strengthen capabilities while actually executing some aspect of the strategy.
Strategic thinking also involves having the right conversations. We have all observed the trend for companies to outsource their IT and, to a lesser extent, their HR services. While cost savings can be made, the downside is that boards often fail to have the necessary strategic conversations in these areas. However, according to KPMG research carried out as part of the UK government's annual Cyber Governance Health Check, boards are now more likely to debate and agree on their tolerance for cyber risk than in previous years. This is a positive change, although more can be done to inform this decision-making: According to KPMG, only 31% of boards receive comprehensive management information on cyber risk.
The Association's work on cybersecurity is an example of how we give you — our members and future members — access to new and expanded learning resources. To keep up to date on news and insights, you can sign up to a daily newsletter, CGMA Advantage. These resources — and others — will help keep you up to date with current trends, take advantage of business opportunities, and prosper in the years ahead.
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