The digital skillset: Noel Tagoe, FCMA, CGMA, Ph.D.

Executive vice-president – Management accounting, research and curricula

Noel Tagoe, FCMA, CGMA, Ph.D.

‘Much work that finance does will remain in place — the question is whether it will be done by humans or machines.’

Change is happening fast, and it affects both individuals and organisations. Those who fail to adapt will be left behind. For management accountants, the skillset needed to be effective and successful is also changing.

Employers who get the right balance of skills win the talent war; those who don't will fail to get the performance they need to thrive within their environment.

For learners, newly acquired skills now have a short shelf life, and they need to know at what point those skills cease to be relevant and be scanning for new skills to learn.

To go forward in the digital age, we will be introducing an updated CGMA Competency Framework that defines the knowledge and skills needed for people within an organisation. This will be one of the outputs of our Future of Finance research, which involved interviews with 300 people in 130 organisations in 14 countries, roundtables in 20 countries, and a survey completed by more than 4,500 members and students.

While there is change, much work that finance does will remain in place — the question is whether it will be done by humans or machines. For example, in our research we found a large business that improved a process that took 16,000 working days a year; through automation that now takes four working days. Although the displacement of people from tasks by automation can be staggering, it need not necessarily lead to a displacement of people from their jobs. Finance professionals need to find new tasks and roles that add value to their organisations. The transition to new roles will require learning new skills.

There are three ways to look at automation from a skills viewpoint. First, there is work that is most effectively done by machine — transactional or repetitive work and those tasks involving some prediction. Management accountants need to be aware of what the machines can do and also make sure that the work is carried out. A second set of skills relating to automation is where humans rather than machines have the ability to carry out tasks — such as those that require leadership, empathy, creativity, and judgement. People need to understand and develop high levels of proficiency in these areas.

There is then the hybrid situation where humans and machines work together. Skills in this third area are split into two — where machines make humans more productive and where humans make machines more productive.

This requires a Competency Framework that incorporates new skills whilst maintaining the existing ones that remain relevant. It should continue to be underpinned by ethics, integrity, and professionalism. Large parts of the existing categories of technical, business, people, and leadership skills will remain relevant. What is needed are new digital skills. As Joe Kaeser, the president and CEO of Siemens AG, stated: "Digitisation is transforming all industries. That is why digital skills should be conveyed at all levels and in all forms of education."

So, for example, one cannot study strategy without paying attention to digital strategy — strategy to achieve digital transformation and to enable the organisation to operate with a digital mindset.

Management accountants increasingly need such digital skills — ranging from a basic digital literacy to a deeper expertise in cloud computing, cybersecurity, data analytics, and new digital business models. And to succeed in a digital environment, finance professionals today need a new mindset and behaviours to deal with complexity, work in an agile way, be creative, and be committed to lifelong learning — to learn, unlearn, and relearn.

Impact of digital transformation on educating finance professionals

The rise of digital transformation presents professional accounting bodies with the opportunity to develop exciting curricula that are relevant to both finance professionals and employers, based on rigorous research, and which address the need for lifelong learning. Kaeser again stated that "education and training is particularly effective in this regard because there is a more direct link between education and employment. But we cannot stop there. The pace of change is so fast that learning must be lifelong." Given recent developments in education, such curricula should be designed to be studied over a reasonable period of time.

They should evolve from existing curricula with three types of changes — some new topics should be added, some old topics taken out, and some existing topics moved within the learning framework.

At the earliest opportunity, finance professionals need to learn how to manage the finance function in a digital world, with a deep understanding of the technologies, data, and organisational structures that are emerging in the digital age. In addition, new areas like digital costing should be included.

One area that most organisations require knowledge from financial professionals is business models. This is to enable finance professionals to understand how different parts of the organisation connect to one another and also how the organisation connects to its operating environment. This understanding can provide insights into the drivers of organisational performance.

Narrating how organisations perform is a key task for finance professionals. The ability to combine data, narratives, and visuals to explain, enlighten, and engage stakeholders to create an impetus for change is highly valued. Learning systems for finance professionals usually address this need through data analytics and visualisation.

The study of risk management in the digital world will be incomplete without looking at cybersecurity. This is primarily because an organisation's information flows and activities run through technology, which opens up new risks. Recent incidents of cybersecurity breaches have been costly to firms both in terms of their finances and, probably more importantly, their reputation. Finally, due to the significant shift from tangible value to intangible value in organisations, finance professionals need to gain deep understanding of intangible values, their drivers, and how to calculate them.

To summarise, the digital world calls for changes to the skillsets of finance professionals if they are to remain relevant to organisations that are experiencing disruptions to their activities. These skills can be gained through lifelong learning based on curricula that combine new knowledge areas with existing areas that remain relevant.

Noel Tagoe, FCMA, CGMA, Ph.D., leads the Association's Future of Finance project.