In our Finance: 2022 and Beyond series powered by Qapita – CapTable and ESOP Management Platform, we spoke with Gaurav Agarwal, a CA, and Partner for Finance Transformation at PwC India.
He delves into his career at the Big 4 firm spanning 18 years and provides insights into the Finance Transformation Practice at PwC, automation in finance functions, and the changing role of CAs.
Excerpts from the conversation:
Q. Can you share snippets of your journey at PwC, and in particular as a Partner on the Finance Transformation team?
A. Right from my articleship days till 2015 at PwC India I was mostly doing internal audits. I guess, I became extremely comfortable with it.
However, 15 years into the profession, I started asking myself, “Am I learning enough?”
“Is it time for me to change things up?”
Without wasting any time, I asked a few seniors at PwC for a different role.
There were three different positions available that were best suited for me. Given my passion for finance, I leaned more toward finance transformation.
The big change was that in the finance transformation role, you cannot just recommend something and leave. You have to implement your recommendations for your clients, which is sometimes challenging but very satisfying.
I think getting to be a management consultant and helping clients in transforming their finance functions was a big driver in my transition. But it was risky as well.
When I made the transition, I was at a certain stage of my life and position in the organization.
On top of that, I was probably one of the very few Chartered Accountants in the team that comprised engineers and MBAs at that time. I did question my ability for the consulting engagement roles.
But in the end, I told myself, “Let me just try my hand at it once,” and that is how it started.
Q. Does your team consist of technologists or a mixture of different professionals?
A. People have realized that CAs do bring value in terms of auditing, understanding business processes, and evaluating them.
We work very closely with a lot of technology consultants, or clients where we must use cloud-based tools, RPA, etc. Therefore, the finance transformation team consists of a healthy combination of chartered accountants, engineers, and technocrats.
So, it is all about working closely with technology because transformation in the finance function is occurring rapidly.
Q. What is automation in finance functions? It is transformative in many ways. Does RPA make an impact in the transformation also?
A. The big automation shift in finance started taking place around four or five years ago.
When the business grows significantly it reaches a stage where doing things manually is just not an option.
They can keep hiring more people for these manual tasks, but that does not sound so efficient.
That is why automation has become prevalent across different sections of finance.
ERP software such as SAP HANA, Oracle, Microsoft Dynamics, etc is at the core of digital finance functions. And also central to the financial transformation.
In a procure-to-pay process, the main question that arises is, “Do we have a vendor portal in place?” (vendor portal is an interface between the organization and its vendors).
Earlier, when people received the invoice, they would just type in the data.
Now there is an Optical character recognition (OCR) engine, built into the robotic process automation (RPA) solution. From there you could go to approvals, then to a three-way match, and ultimately the payment goes to the vendor.
The idea is to make this whole process touchless and seamless.
There are tools now that are using natural language generation, a subfield of artificial intelligence (AI), to create the first cut of that system.
It truly helps to close your books faster and push out your disclosures. And again, these are happening across different functions.
Q. Should CAs fear automation? Do you see a lot of Chartered Accountants being aware of the benefits of the cloud, AI, and other associated technologies?
A. Yes and no.
Some of the CAs that I interacted with are still very focused on regulatory tasks.
The smarter ones use their free time to upskill themselves. I have seen them pursuing Python, R, Blockchain, or data analytics courses from Udemy, Coursera, etc.
They understand that today it is fundamental for a Chartered Accountant to be aware of those technologies and their real-life applications.
Though just knowing certain things is not good enough. What matters is how you apply the technology to real-life situations, how you innovate, and how you do things differently.
Instead of spending 15 days creating an MIS Presentation Deck, they would spend their valuable time evaluating the data, creating scenarios, and helping the business make the right decision.
Finance professionals and CAs would have to upgrade their skill sets to be able to partner with the business better and leverage technology to become better business partners.
Today, it is very important that you understand the business environment and the technology landscape in addition to the regulatory aspects.
Q. Do you see the current generation leaning more towards joining startups or SMBs? Or do you see them being attracted to the Big 4?
A. From what I have observed, newly qualified CAs are extremely attracted to the Big Four.
I mean, why not? Big 4 firms are a great place to learn about different businesses.
The diverse range of knowledge you are going to acquire at a Big 4 is unmatched.
I am not suggesting that you ultimately become a Big 4 partner.
Having said that, if you stay at a Big 4 firm in the formative years of your career you would get exposed to a variety of companies, and business models.
You would get to interact with a diverse range of professionals which would help in personality development, and gathering knowledge.
And then make an informed decision; be it going for a job in the industry, joining a startup, or even continuing with the Big 4.
Q. What are your views on ESOPS?
A. I think ESOPs are creating many opportunities, and not just for finance professionals, but across the board.
Even a few of my team members have jumped on the bandwagon and joined startups.
ESOPs are obviously a great tool for retaining talent. Employees can make a disproportionate amount of wealth while they stay loyal to the company.
But employees would only reap the benefits of ESOPs once they reach a certain stage.
Q. What are your financial predictions for 2022? Are there any new areas of practice that CAs should be aware of?
A. More and more finance functions will become virtual. I believe that is going to be one of the most popular trends in finance post-COVID.
Gone are those days when you could say, “I need to have a physical paper to be able to approve a transaction.”
Another biggest trend in my opinion would be outsourcing.
Many companies have already started adopting the trend. They do not want their finance team to be bogged down with transactional processing work, there are specialized agencies for that.
And last but not least, the trend that we are going to see is the triangle model flip.
Historically, we had 60 percent of the people in finance doing transaction processing, 15 -25 percent doing compliance, and 10-15 percent doing reporting and analytical work.
That triangle, ultimately, will flip.
Now 50-60 percent of people in finance will handle analytics, and business partners, 20 percent of people will handle compliance, and 15 percent will do the transactional work.
The trends were slowly catching up, but COVID came and accelerated the process.
