Bridging the work-learning divide
‘The updated syllabus is exciting and relevant to both finance professionals and employers, and it is based on our rigorous research.’
Organisations continue to face disruptions due to a variety of factors, in particular digitalisation. Overcoming these challenges depends on the performance of their employees, including finance professionals. This has massive implications for the employability of finance professionals because they will need to gain the right skills to ensure that they can perform at the desired level and thus remain attractive to employers.
To ensure our students are fully prepared for that future, we are launching our updated CGMA Competency Framework and syllabus of the CIMA Professional Qualification. These are also relevant to the CGMA Finance Leadership Program route to gaining the CGMA designation in the US and address the skills needs of employers — to bridge the gap between work and learning.
For members, we will continue to provide learning that keeps them up to date. CIMA members will be equipped with the opportunity to enhance their learning via a CGMA product to ensure they retain their value in tomorrow's workplace.
For the first time we are introducing exam blueprints that show students what is examinable and make learning more effective and efficient. These are widely used in the US and are a new innovation and a benefit of working together as one Association. To create the blueprints, we asked finance professionals working in business at each level of the syllabus or supervising people at those levels to rate work tasks on both their frequency and on how critical they are. Those tasks that are carried out most frequently and are most critical will be examined more deeply. In effect, the blueprints operationalise the syllabus in teaching and exams.
Reimagining finance's role
These changes are driven by the need for the finance function and finance professionals to reimagine their roles in four key ways.
First, the finance function needs to transform itself from a cost centre to a value centre. If the profession is predicated on value, it is likely to grow in size and influence. However, if the finance function continues to be regarded as a cost to be reduced, it is likely to shrink due to cost minimisation.
This requires the finance function to have both "outside in" and "inside out" views of the business. This is challenging because finance people should be able to read their organisation's ecosystem. These ecosystems are often unstable and rapidly changing in contrast to the more stable environments of the past.
Second, finance needs to use its control systems to enable action rather than to stop action. Consider here the analogy of a car brake. Which car would you drive fast? A car with excellent brakes or a car with faulty brakes? From this we know that it is the brake (a control system) that enables drivers to drive fast because they know they have the means to slow down or stop if necessary.
Recently, we worked with a large organisation where a credit control system acted as a brake that stopped rather than enabled action. A change of mindset for the company's leaders meant that financially robust customers were given more credit. This has resulted in higher revenue and cash flows for the organisation. Looking at the issue with fresh eyes led to increasing cash flow.
Third, finance needs to develop its ability to "tell the story" of what is happening in the business: a past, present, and future view. Currently, that story is often told with financial data only. Increasingly, we are seeing visual and narrative elements that can enlighten and engage stakeholders, and then combine to give impetus for change. Our updated syllabus will enable finance professionals to create that impetus for change in their organisations.
Finally, accountants need to be partners for value. As business partners they need to be critical friends who champion the cause of their principals and at the same time challenge their views and assumptions where necessary. This requires that they know the business from end to end. Success in this area will help them transition from navigators who show the way to co-pilots who jointly lead the business.
Skills and competencies: An updated framework
The updated CGMA Competency Framework continues to be underpinned by ethics, integrity, and professionalism, but it moves from the existing four skills categories to five categories. Added to the technical accounting, business, people, and leadership skills is a fifth category, digital skills. Additionally, some digital skills are also now embedded within the four traditional areas.
Technical skills preserve the skills of financial reporting, costing, budgeting, capital investments, and managing cash. However, we now need people who can understand digital costings and can use that to influence decisions and performance in their organisations.
We also recognise, despite increasing automation, that certain human skills are increasingly highly valued. For example, computers are excellent at prediction but in practice provide too many scenarios. Human judgement is often needed to provide wisdom, context, and perspective to make decisions about these scenarios. As a further example, Reuters recently reported that Amazon used artificial intelligence (AI) to sift CVs, but the machine taught itself that male candidates were preferable. The company, according to the Reuters report, saw the gender bias and altered the program. Amazon told Reuters the tool "was never used by Amazon recruiters to evaluate candidates" but declined to comment further. In addition, some companies have also used AI to predict productivity based on postcode for recruitment purposes. Humans identified flaws in this approach — in addition to the inherent ethical problems with it.
New areas in the updated syllabus
The updated syllabus is exciting and relevant to both finance professionals and employers, and it is based on our rigorous research. It has been put together so that it can be studied over a reasonable period of time.
It is an evolution from the previous 2015 syllabus with three types of changes — some new topics have been added, some topics have been taken out, and some existing topics have been moved within the syllabus.
It includes new areas of digital costing, digital strategy, cybersecurity, valuation of intangibles, business models, and ecosystems.
There is no change to the previous three-pillar structure. The Enterprise pillar helps students craft strategy and prepare to influence and implement strategy. The Performance pillar ensures that the strategy is realistic, monitors its implementation, and examines the risks that the strategy might not be implemented properly. The Financial pillar tells the story of the organisation's performance and how the organisation can access adequate and cheaper finance to fund its strategy and operations.
To highlight a few of the syllabus's changes, at the Operational level we have introduced a new subject, Managing Finance in a Digital World, which looks at the technologies, data, and structures that finance professionals use in the digital age. The emerging area of digital costing is also included to provide insights in the changing nature of the structure, drivers, and behaviour of costs for digital assets and enterprises.
At the Management level we have introduced business models and the use of data analytics tools and mindsets to analyse and present the performance of the organisation. We have also given more prominence to integrated reporting to reflect the multi-stakeholder environment in which most organisations operate.
At the Strategic level we have introduced cyber risks and digital strategy. In addition, we have dialled up the area of valuation of intangible assets to reflect their growing importance in the business environment.
For employers, the result will be business success based on CGMA designation holders who are fully equipped for a digital future. The outcome for CGMA designation holders is that they will be better placed to be effective in the workplace, add value to their organisation, and enjoy successful careers.
Noel Tagoe, FCMA, CGMA, Ph.D., leads the Association's Future of Finance project (cgma.org/future-of-finance).