Collaborating for a connected future Insights from Coalesce

Collaborating for a connected future | Insights from Coalesce: Art of the possible Collaborating for a connected future Insights from Coalesce: Art of the possible 2023 1

Collaborating for a connected future | Insights from Coalesce: Art of the possible 2

Collaborating for a connected future | Insights from Coalesce: Art of the possible Table of contents 04 Foreword 16 Future of the Office of Independent Directors (ID) 30 Future of the Office of the CEO 42 Future of the Office of the CFO 68 Future of the Office of the CHRO 82 Future of the Office ofMarketing, Sales, and CX 98 Future of the Office of Risk, Compliance, and Controls (RCC) 56 Future of the Office of the CIO 128 Future of the Office of Supply Chain and Operations 114 Future of the Office of CISO 142 Future of the Office ofTax 3

Collaborating for a connected future | Insights from Coalesce: Art of the possible Foreword Coalesce was conceptualised on this premise— to get leaders from various industries across business functions, our alliance partners who would bring in the best of their thinking, and Deloitte leaders with strong sector and technology experience to come together and design-think the future. This is what translates into the “Art of the possible”, as we like to call it. It was heartening to know and note that each of us contributed to the discussion. The peer groups engaged in design- thinking, irrespective of which industry they represented, with the single-minded focus to define the future of their respective business functions. The exchange of ideas is what we have captured in this book, as captured by each business function. Any organisation could use the book as a ready reckoner of what their peer groups deem as the future and use it as a start of their journey to define the future. 4

“ 1+1 > 11 When great minds meet, magic happens. Vinay Prabhakar National Sales and Alliances Leader, Deloitte South Asia Following the launch of Coalesce, we have had received requests from several organisations to run similar design-thinking workshops—or “Mini Coalesce”, as we would like to name them—where we have brought the company leadership, select peer group representatives, and our alliance partners together to help define their future. I hope you enjoy reading the book—I would love to see the infographic cut-outs on your softboards! Happy reading.

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ Collaboration is the key to co-create a connected future for businesses and functions. The fusion of great minds has the power of creating magic and ironing out even the toughest of business challenges. Let’s walk together and win together. Let’s find more opportunities to Coalesce. Romal Shetty Chief Executive Officer Deloitte South Asia 6

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ Collaboration is a powerful tool for building better futures together and Coalesce successfully made it possible. The reciprocity of ideas and exchange of knowledge that emerged in the discussions will inspire innovation in solving complex problems of the future. Shefali Goradia Chairperson Deloitte South Asia 7

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ True transformation requires a harmonious balance of innovation, collaboration, and courage to break free from the old and embrace the new. Coalesce from Deloitte is an opportunity for our clients to challenge the status quo and orchestrate a future that is robust and agile. Sathish Gopalaiah Pesident - Consulting Deloitte South Asia 8

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ The pandemic has pushed us to think differently, become resilient, take charge, and shape our own narrative. We live in a world today that requires us to be change catalysts in our own domains, with the propensity to reimagine business solutions. The only way we can drive differentiated value is by collaborating together to be future-ready, in bold new ways. This has been a great opportunity to come together and shape the future. Anthony Crasto President - Risk Advisory Deloitte South Asia 9

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ Coalescing for the future: where collaboration and innovation create boundless possibilities for businesses and clients alike. Coalesce is a marquee Deloitte programme, where we are working with the industry leaders to build a common vision for the future. Debasish Mishra Partner, Chief Growth Officer Deloitte South Asia 10

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ Coalesce is a unique platform introduced to explore future business scenarios. Moving away from the boundaries of our organisations, solutions, and products, we built this programme to nudge our clients to create approaches to navigate a future that promises some extraordinary opportunities. Jehil Thakkar Partner and Marketing, Brand & Communications Leader, Deloitte South Asia 11

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ “ Coalesce was an amazing and powerful event fostering robust conversations around Digital and Cloud transformation. The unique combination of alliances, clients, and Deloitte made this event particularly impactful! Look forward to replicating soon. Coalesce reinforces the unique combined power of Customers, Alliances and Deloitte representing 1+1+1 = >>3 when it comes to the Power Of Ecosystems. Powerful multiplier impact meeting! Asish Ramachandran, Global Chief Commercial Officer, ServiceNow, Deloitte Andrew Vaz Global Ecosystem and Alliances Leader, Deloitte 12

Collaborating for a connected future | Insights from Coalesce: Art of the possible “ “ I attend many regional and global events and Coalesce was the first Indian based client event that I attended. It was great to see so many customers and apart of the expected presentations and such, I loved seeing them spend time with each other and for me to be able to spend some time with them in a relaxed setting (of course while enjoying some Indian food). Coalesce gave an opportunity to business leaders including clients, alliances, and Deloitte to debate, collaborate, and tackle some of the bigger problems of the day. Coalesce is when you have number of things coming together for common good. To me “none of us” is as good as “all of us” and that was proven in the conference. Thomas Galizia, Principal, Deloitte Consulting LLP Jan Waals Global Chief Commercial Officer, SAP, Deloitte 13

Collaborating for a connected future | Insights from Coalesce: Art of the possible India@2047 Executing such a transformation agenda is quite ambitious. Over the next 25 years, India will see many developments, including but not limited to the following: • It will be in the middle phase of its demographic dividend era, housing 20 percent of the world’s young population. To harness the power of such a huge workforce, the country aims to transform its skilling and higher education ecosystem to achieve Gross Enrolment Ratio (GER) of 50 percent and emerge as a global education hub.3 • To insulate itself from risks to global supply chains (witnessed during the pandemic), India aims to expand its manufacturing base. It is also looking to increase the manufacturing sector’s contribution to GDP to 25 percent from current 15 percent.4 Through policy levers viz. production linked incentive schemes, FDI liberalisation, and incentives to sunrise sectors, India aims to achieve its earlier stated vision of “Aatma Nirbhar Bharat — Self-reliant India.” • India is looking to reduce 45 percent emission and 50 percent electricity generation from non-fossil fuel by 2030 to become a destination that produces and uses clean energy.5 On the 75th anniversary of independence, Indian prime minister announced the vision for the 100th anniversary of independence — unshackle from the middle-income trap and emerge as a developed nation.1 To achieve this vision, gross national income must increase at 10 percent per annum for the next 25 years.2 Growth will be balanced with India’s commitments to sustainable and inclusive development. 14

Collaborating for a connected future | Insights from Coalesce: Art of the possible • The country aims to advance its technology supremacy and unlock value through Artificial Intelligence (AI), Augmented Reality (AR), blockchain, drones, Internet of Things (IoT), robotics, 3D printing, and Virtual Reality (VR) to become a technology and economic powerhouse.6 • India plans to reduce gender barriers and create a gender equal society.7 • It also aims to not only achieve the last mile delivery of health services, but also emerge as a global hub for health care and medical tourism through the Heal in India and Heal by India projects.8 The towering vision presents businesses, investors, governments, and citizens a once-in-a-century opportunity to come together to innovate and unlock great value potential. To enable such seamless value creation, governments across levels are putting in place mechanisms through policies and regulations to improve the ease of doing business to make India a preferred destination for talent and capital. 1 https://www.outlookindia.com/business/pm-narendra-modi-sets-sights-on-developed-india-by-2047-news-216496 2 https://www.livemint.com/opinion/online-views/developed-india-by-2047-look-beyond-the-arithmetic-of-growth-11662657171451.html 3 https://economictimes.indiatimes.com/industry/services/education/nep-aims-to-make-education-accessible-to-all-says-education-minister- dharmendra-pradhan/articleshow/93653484.cms?from=mdr 4 https://www.deccanherald.com/content/528729/manufacturing-25-gdp-pm.html 5 https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1847812#:~:text=As%20per%20the%20updated%20NDC,based%20energy%20 resources%20by%202030. 6 https://pib.gov.in/PressReleasePage.aspx?PRID=1830841 7 https://www.hindustantimes.com/india-news/take-five-pledges-to-make-india-developed-nation-by-2047-pm-101660583659914.html 8 https://health.economictimes.indiatimes.com/news/industry/india2047-from-heal-in-india-to-heal-by-india/94337668 15

Collaborating for a connected future | Insights from Coalesce: Art of the possible Future of the Office of Independent Directors (ID) Over the past few years, global developments have challenged the status quo with a widespread belief that organisations cannot ignore the world around them. They should rather engage members of the society and act to address the challenges we face. Now, more than ever, stakeholders expect organisations to do the right thing and do that well. These expectations range fromtaking action on environmental and social issues and trusting organisations to safeguard private data, to requiring organisations to have strong governance and financial reporting mechanisms.In short, stakeholders are holding organisations accountable for being trustworthy. Thus, trust must evolve from being merely a chance outcome to a strategic priority for the management and the board, including Independent Directors (IDs). 17

Collaborating for a connected future | Insights from Coalesce: Art of the possible Please open to see an illustrated tear-away summary of the discussion 19

Collaborating for a connected future | Insights from Coalesce: Art of the possible and relevant for the business, they will have to spend three-fourth of their time on addressing future challenges and developing strategies. Today, IDs play a critical role in the success or failure of their organisations. They are expected to serve as a trusted sounding board and guiding hand for Chief Executive Officers (CEOs). Regulatory bodies, investors, and stakeholders at large and challenges relating to managing their expectations are redefining IDs’ role in real time. IDs will have to take on the role of the stewardship, in addition to the supervisory role that they are expected to play. The composition and agenda for boards are also undergoing a transformation. Future boardrooms will look and sound quite different from what they are today. Forces such as digital, cyber and information security, societal expectations, and climate action, diversity, talent, and future of workforce will result in reshaping boards. In those boards, IDs will be expected to play different roles, such as vision provocateur, guardian, trust torchbearer, culture and talent cultivator, and crisis compass. Although traditional responsibilities of financial reporting, compliance, risk, and regulatory continue to keep the mindshare of IDs, governance through the rear-view mirror will not be sufficient. To be more effective 20

Collaborating for a connected future | Insights from Coalesce: Art of the possible to look at the cost of ESG implementation is consider it a trade-off between the necessary expenditure and potential losses incurred by mismanaging ESG factors. Start-ups have innovative ideas, but do not have the requisite funds. In the future, embedding ESG in their business models/strategies/principles will be a must for companies as regulatory bodies, investors, and civil societies are relentlessly urging companies to act responsibly. Addressing ESG risks demands IDs’ attention. Although some IDs believe that ESG is not a part of their current role, market evidence suggests quite the opposite. There are three key themes (amongst others) that IDs should be prepared to address as they enhance their role to keep up with the rapidly changing business and regulatory requirements: Rising importance of Environmental, Social, and Governance (ESG) In 2022, July 28 was marked as the Earth Overshoot Day. On this day, the humanity’s demand for ecological resources exceeds the resources earth can regenerate within this year. We are living on borrowed resources. This reminds us of one of the most thoughtful and poignant quotes - We do not inherit the earth from our ancestors; we borrow it from our children. In response to current and future demands, IDs will need to expand their governance and oversight responsibilities to include the following: • Define ESG oversight responsibilities across the board itself and its committees, and identify the steps needed to meet them. To set a governance structure, board members should understand how sustainability is linked to strategy, opportunities, and risks. • Set the tone at the top and urge the CEO to play a critical role in underscoring the importance of ESG programme. Management teams should consider forming a formal ESG sustainability management committee comprising cross The idea of investing on the ESG parameter is at a nascent stage in India, however, globally this is a well-entrenched concept. ESG is critical for each business - whether it is a large or small company, matured or start-up, or promoter driven or multinational company. However, ESG is yet to get the desired attention in start-ups, and small and promoter-driven companies where it is essentially considered a cost. A good way 21

Collaborating for a connected future | Insights from Coalesce: Art of the possible • functional company leaders (with assigned responsibility and accountability). • Integrate ESG into the company’s strategic fabric. The ESG strategy should be linked to stakeholders’ assessments, KPI metrices, and organisational culture. • Add ESG to the board’s risk infrastructure and fully integrate it into the company’s enterprise risk management activities. Audit committees should also understand which ESG risks are deemed material and accordingly should be captured in sustainability disclosures. • Conduct a diagnostic study of as-is processes to determine the entity’s current ESG maturity by asking the relevant questions. Are the company’s sustainability efforts embedded in strategic decision making? Has the company defined key elements of its programme? Is the programme aligned to a recognised standard or framework? What are the disclosures currently being made? Has the company engaged internal audit or obtained assurance, etc.? • Assure, disclose, and communicate. Investors have made their ESG expectations known. They will likely continue to use their voting power to hold companies accountable for meaningful progress. With so much riding on the company’s successful implementation and governance of ESG, boards will benefit greatly from continuing education and increasing awareness as they carry out their oversight responsibilities. 22

Collaborating for a connected future | Insights from Coalesce: Art of the possible Addressing risks including cyber risks In the past, many boards were reluctant to take an active role in establishing levels of risk appetite for two main reasons. They did not have the requisite knowledge or were concerned that by doing so they would step on the management’s toes. At present, however, the increasing number of stakeholders want the board to be actively involved in risk management. Boards may consider several steps to integrate risk management from a separate agenda item at board meetings to a topic that is suffused throughout every item the board discusses. Although a one-size-fits-all solution is unlikely to be effective in addressing every risk, boards can use some common approaches. These include consideration of whether a board-level risk committee would be useful in sharing the workload amongst directors, identifying risk management as one of the board’s activities, and creating a process to set or monitor the firm’s risk appetite levels. At present, one of the key risks to manage is cyber risk. The phrase ‘cyber everywhere’ has never been more powerful than it is in today’s world of digitisation. The pandemic led to vast amounts of sensitive data being exchanged digitally, along with the increased use of personal devices and home networks. With the workforce being distributed and distracted, cyber-attacks across platforms are increasing. Cyber breaches have prompted the board and senior leadership to lay more emphasis on cyber risk. Boards need to understand the criticality of every single breach and steps being taken to mitigate it. Simply being aware of cyber risks will not be enough for the board. 23

Collaborating for a connected future | Insights from Coalesce: Art of the possible information on emergency contacts, clearly defined reporting to the board of directors’ mechanism, immediate action points, and a communication strategy for customers and regulators. Boards should focus on enterprise risk management policies and guidelines that are practical to implement. Governance frameworks borrowed from other countries may also be adapted to the Indian scenario, keeping in mind different maturity levels and structures of companies – MNCs in India, promoter-driven companies, listed companies, and start-ups. The board and the management should create and implement different sets of policies to ensure information security, cyber security, and data privacy. In addition to the involvement of the CISO, CEO, and CTO in the governance process, organisations need enough skilled resources to achieve strong governance in each stream. Some large companies, including cyber risk experts, have separate cyber risk management committees that can take the pressure off the board. “Technology replaces technology, but as a cyber economist you have to understand how you can do best with the budget.” To deal with cyber security issues, the board should have a “zero” tolerance approach. IDs will have the enhanced responsibility of protecting the company’s reputation, addressing changing business models, and managing a complex external environment. They should consider cyber security regulations (including those from financial institutions) and global best practices, and encourage the implementation of predictive data analytics and appropriate tools. Additionally, using compliance tools and regularly updating them with the latest amendments, along with organising training sessions for employees and executives, will go a long way in strengthening companies’ risk management. Boards should be pushed to put in place dynamic crisis management guidelines for cyber security that, amongst other things, must include “Future has happened” and “you have to read the tea leaves.” 24

Collaborating for a connected future | Insights from Coalesce: Art of the possible Financial reporting to be made seamless Financial reporting is the link between a company and its investors. Investors use this information to assess whether they trust an organisation enough to put their capital at risk. To maintain compliance with ongoing regulations and exercise effective governance, businesses also use ‘business assurance’ solutions that allow implementing a flexible and effective control framework with real-time monitoring capabilities in which third parties may also be employed to test 100 percent of the controls. This reminds us of a famous quote made by W. Edwards Deming– In God we trust. All others must bring data. A company’s board and management are its stewards. Financial reporting is key to providing stakeholders the information they need to hold boards accountable. The company’s reputation is directly affected by how it and its management act and how accurate its reporting is about those actions. For the board to be successful in meeting its financial reporting obligations, it needs to drive the process, obtain management’s support, engage with auditors, and ask the right questions. The board must give the desired attention to financial information. Many times, the board receives financial information near a board meeting, making it difficult to review data in detail. In addition, the meeting usually covers multiple agenda, including review of financial information; this dilutes the importance of financial reporting. Conclusion There are numerous other items that require IDs’ attention. However, the above-mentioned themes seem to be attaining top priorities in the mind of IDs and require immediate focus. What makes the issues at hand unique is that the solution differs from situation to strategic priorities, and level and type of operations. A model that provides a continuous assessment of actions and results thereof will be a must to ensure that intentions and actions are in sync, and we continue in our journey of corporate excellence. The board is required to determine critical issues in financial statements, such as key accounting policies, significant estimates and judgements, unusual/non-routine transactions, and related-party transactions. These issues should be discussed separately in a board meeting. In this changing time, the company should plan separate a board meeting to review financial information and other matters. 26

Collaborating for a connected future | Insights from Coalesce: Art of the possible The Independent Directors track at Coalesce 2022 attracted very high quality and experienced board members. Interactions and discussions with them across themes were a mutually learning and rewarding experience. Such nuggets of wisdom could only come with vast knowledge and experience. Rajat Jain, Independent Director “This initiative by Deloitte is indeed praiseworthy. The highlight of the programme was not only the curriculum but also the choice of leaders who participated in tracks. The agenda was very well curated for not only facilitating intelligent discussions on operational issues but also covered academic topics. Evening events were also outstanding. All in all, full marks to the Deloitte team for flawless execution. Consistency is the hallmark of champions. The real test will be on how Deloitte carries this initiative forward. Thank you, Deloitte! Ganesh Nayak, Independent Director As leaders, we are equipped with a fair understanding of business chemistry. However, when the spotlight is turned on us that understanding tends to unravel. The most impactful unlearning and relearning that I carry back is from the Business Chemistry session. And my advice is every leader should take the test to rediscover themselves and rework their chemistry. MPV Vijaykumar, Independent Director 28

Collaborating for a connected future | Insights from Coalesce: Art of the possible “While certain attributes of ID role are non-negotiable, the future boards will demand that Independ Directors adapt to evolving situations and act as a vision provocateur, guardian, trust torchbearer, culture and talent cultivator, or crisis compass, or a combination of these as may be required.” Sachin Paranjape, Partner, Deloitte South Asia Alliance Partners 29

Collaborating for a connected future | Insights from Coalesce: Art of the possible Future of the Office of CEO Always-on transformation Discovering the most effective way to stay the course amidst uncertainty and volatility requires executives to decode business disruptions. These disruptions can be broadly classified into two types (a) acute disruptions or one-time events (such as the Suez Canal blockade, labour/talent disruption during COVID-19, the Russia-Ukraine war) and (b) chronic disruptions or ongoing changes (such as climate change, digital shifts, regulatory controls, and fuel and energy price fluctuations). These disruptions not only affect profits but also expose gaps in business capabilities, reducing organisations’ competitiveness. These disruptions prompt organisations to look for new business models better fitted to deal with shifting customer/employee preferences. Overtime, the frequency and intensity of these disasters have also increased; according to the UN, climate disasters almost doubled in 2000- 2019 (6,700 disasters) from 1980-1999 (3,700 disasters). 30

Collaborating for a connected future | Insights from Coalesce: Art of the possible They need an “always-on” transformation mindset to drive enterprises towards becoming an exponential organisation. Here’re the key tenets of an exponential organisation. Executives who have managed to stay ahead of the competition despite these disruptions have adopted the “Respond, Recover, and Thrive” approach. For that, they need to foster an “always on” transformation mindset within their organisations. Such a mindset enables thoughtful changes that help organisations capitalise on new opportunities or alter existing strategy to protect business and ensure long-term growth. These changes may be gradual or drastic depending on the impact on business and the effort required to acquire capabilities. CEOs will be at the core of developing and implementing the response to disruption, while other factors, such as technology and customer awareness enable the effort. 31

Collaborating for a connected future | Insights from Coalesce: Art of the possible • Acknowledging disruptions and developing an agile and scalable response: Exponential organisations have the capability and resources to pre-empt trends/disruptions in their domains, giving them ample time to craft a sound and scalable response. Leadership also often undertakes “pre-mortem” to conduct scenario planning and identify potential pitfalls before going ahead with actual implementation. • Promotes innovation and does not penalise failure: These organisations believe in trying innovative approaches, fail quick, and scale up successful innovations in the minimal time. • Partnerships and collaboration: These organisations provide access to incremental products, services, markets and technology, thereby providing support in crafting and implementing response to disruptions. • Clearly articulated vision and mission: These organisations have integrated their vision and mission into their business strategy and day-to-day functioning. • Consistent connect with customers: To understand their ever-evolving needs, exponential organisations will track industry trends that would help decrease the go-to-market time for new products and services. The increasing volume and value of data is providing asymmetric advantages to organisations that can access, interpret, and act on it. • Empowered and purpose-driven team: It helps manage the immediate response and must believe in the purpose and be the proponents of change. It should have access to disproportionate resources. • Anti-fragile and resilient: These organisations invest disproportionately in the right skill sets and have an agile organisation structure that responds quickly to disruptions. • Analytics-driven insights, and lead and lag indicators: These help exponential organisations take informed decisions. 34

Collaborating for a connected future | Insights from Coalesce: Art of the possible Make the future happen As ever-increasing complexity and uncertainty continue to weigh on CEOs, they expect additional responsibilities on their plates in future. They will have to continue to act as a beacon of hope and optimism during ups and downs in the business and effectively navigate their way through disruptions. Build an exponential organisation Developing an exponential organisation starts with people and culture at the core and gradually moves towards other enabling factors. The following points explain what it takes to build an exponential organisation: Integrated operations centre Run integrated operations centres to respond to disruptions that are time sensitive and require a high degree of collaboration. This would provide end-to-end visibility and decrease the scope of miscommunication amongst diverse teams working on responses. Agility and innovation Develop an operating model that enables enterprises to quickly respond to disruptive events. Bring together people from diverse departments to develop responses to disruptions and drive innovation as a core value across the organisation. Democratise data Empower employees across levels with access to firm- wide data, along with the necessary tools and training, to draw insights. This would enable an expedited informed decision-making process and uncover new opportunities. People, culture, and infrastructure Develop high performance teams and a culture that nourishes experimentation. Create enabling infrastructure to foster such experimentation and scale up in a sustainable manner. Partnerships and collaboration Onboard an ecosystem of like-visioned alliance partners who supplement your organisation across various stages of crafting and implementing responses to disruptions. 35

Collaborating for a connected future | Insights from Coalesce: Art of the possible Use technology to enable transformation As technology continuously creates disruptions and opportunities, exponential organisations need to constantly evaluate their technology portfolios and amplify their offerings. Over the past few years, multiple technologies have emerged to help build resilient and scalable solutions. Looking at each one of them, instead of focusing on one, is critical. Exponential organisations are doubling down investments in technology to enable their growth journeys. These investments are predominantly targeted at the following areas: “Really knowing” the customer: Run integrated operations centres to respond to disruptions that are time sensitive and require a high degree of collaboration. This would provide end-to-end visibility and decrease the scope of miscommunication amongst diverse teams working on responses. Pre-empting responses to disruptions: Use AI-enabled analytics to pick-up the “noise” around disruptions and craft early responses; develop distinct business scenarios to ascertain key challenges and conduct pre- mortem of business concerns. 36

Collaborating for a connected future | Insights from Coalesce: Art of the possible Rethinking workflows: Implement far-reaching platforms to promote collaborations between diverse sets of employees and alliance partners; invest in data warehouses to enable end-to-end visibility within the organisation and predict/detect operational anomalies. Democratising data: Develop leading and lagging indicators to enable informed decision-making, moving from reporting to insights; assess real-time data to capture market trends. Employee as a persona: Develop employee-focused analytics to identify and groom high-performing individuals, predict attrition trends, and take up remediate measures. 37

Collaborating for a connected future | Insights from Coalesce: Art of the possible Conclusion To thrive with the “always-on transformation” mindset, exponential organisations will require pooling in cross-functional expertise. For this, CEOs need to lead from the front, and ensure alignment of internal and external stakeholders working towards a common goal. They should embrace enabling technologies in their journey of building exponential organisations that foster on organisational and technological agility. 38

Collaborating for a connected future | Insights from Coalesce: Art of the possible “I was delighted to be a part of the elite group of CEOs at the Coalesce event. It was a great opportunity to learn about leading-edge technology and management practices, as well as from peers. This should be an annual event.” Vijay Shah, Vice Chairman, PGP Glass “Disruptions can be acute or chronic and the frequency of disruptions is on the rise. Exponential organisations are doing “pre -mortem” and increasing their investment in technology to provide value to the entire ecosystem.” Viral Shah, Executive Director, V Trans India The experience of working with an organisation similar to Deloitte on the formation and release of the Coalesce book has been a very good and enriching experience. The interactions between peers of different companies were insightful. We thoroughly enjoyed knowledge sharing that took place as a result of these interactions. Noushad VKC, Founder, Walkaroo “Insightful exchange of ideas from a broad spectrum of industry CEOs who sat together in a workshop controlled so skilfully by the Deloitte team. We brainstormed on how disruption either sudden (such as COVID-19) or organic can be tacked by organisations. Loved the spirit and environment in which we interacted and coalesced. I am looking forward to many more such events.” R. Om Prakash, Managing Director, Delta Electronics 40

Collaborating for a connected future | Insights from Coalesce: Art of the possible Fostering an “always-on” transformation mind-set helps organisations capitalise on new opportunities and stay ahead of the competition. Viral Thakker, Partner, Deloitte South Asia Collaboration can help exponential organisations demonstrate agility during uncertain times. Onboarding like-visioned alliance partners can go a long way in crafting and implementing responses to disruptions. Anjani Kumar, Partner, Deloitte South Asia 41

Collaborating for a connected future | Insights from Coalesce: Art of the possible Future of the Office of the CFO Over the years, the role of finance has undergone a metamorphosis, with many CFOs aspiring to take on a greater strategic role as virtual co-pilots to the CEO. As of now, traditional fiduciary responsibilities of CFOs take up a significant amount of their time. However, the evolution of their role would require CFOs to free up much more time from the traditional roles of an operator and steward to act as astute “strategists” or indomitable “catalysts”. This evolution has already begun in many organisations. Finance leaders are discussing the need to change the talent structure and adopt “bold plays” to prepare their organisations. Digital transformation of the finance function is imperative to making this shift work, as routine processes get automated and exponential technologies support CFOs’ judgement and decision- making roles. 42

Collaborating for a connected future | Insights from Coalesce: Art of the possible

Collaborating for a connected future | Insights from Coalesce: Art of the possible Liquidity/capital allocation strategy Making sound investment decisions is a perennial top-of-the-mind issue for CFOs, making them constantly weigh return on investments of their business’s time, resources, and human capital for the organisation’s health and shareholder value. To achieve the optimal capital structure, CFOs need to do more than just understanding business needs now and must determine what will likely drive growth in the future – a timeframe extended by challenges related to climate change, market implications, and regulatory requirement. CFOs are often asked – what parts of the business are underperforming and should be divested? Where can we invest our cash? Monitoring internal rate of return against planned investment is quite arduous as paybacks do stretch beyond three–five years. Companies must plan and draw assumptions with greater thoroughness and identify risks and mitigation strategy linked to outcomes. Five key themeswere identified during the design thinking workshop that are in a way ‘areas of change’ or ‘challenges’ right now. However, when addressed adequately, these challenges can transform CFOs’ role into a catalyst/strategist. 46

Collaborating for a connected future | Insights from Coalesce: Art of the possible Data and digital adoption To support their organisations, CFOs need to know what data they have, whether it is the right data, and how they can access it. Successfully getting timely information into the right hands can separate leaders from laggards. For many CFOs, lack of effective data management can be a serious obstacle to growth. CFOs need to deal with challenges related to data authenticity, data ownership especially for upstream data objects, and data security. These challenges consume a significant amount of their time. Building finance talent for the future A rapidly evolving business environment means significant changes in the way work is done, who does it, and what tools and processes are necessary for success. To deliver greater business value, CFOs must improve talent retention and satisfaction across the finance function, accelerate the speed of technology adoption during and after an implementation, improve workforce culture, and reduce costs due to organisational inefficiencies. Developing, retaining, and reskilling the finance workforce remains a top concern for finance leaders. The pandemic has only added to a long list of related challenges, ranging from the “Great Resignation” to increasing instances of burnout. Return-to-work and hybrid workplace models have required immediate attention and enhanced focus on talent mobility. Providing stakeholders a real-time stream of actionable information is not easy. In the past, most of the reporting has been defined by steps required to produce reports themselves: collecting data, and drafting and disseminating reports. CFOs are also beginning to embrace new forms of AI and machine learning but can also overwhelm tech-challenged team members. Cloud represents a fundamental shift in how technology solutions are developed and delivered. It is becoming the new standard and CFOs are seeking guidance on measuring return on investment. 47

Collaborating for a connected future | Insights from Coalesce: Art of the possible ESG for competitive advantage The rise of ESG is linked to companies looking at ESG as a cost-centre, compliance-driven approach to value creation, and performance driven. Financial markets’ structure is changing, massively affecting how companies obtain financing and manage their investor relations. CFOs will have to focus on disclosures that will witness more stringent norms in the future. The challenge CFOs will face is in setting commitments grounded in an organisation’s business strategy. The expertise to make accurate disclosures in India is still evolving and without the ability to track and report sustainability metrics, CFOs will be unable to meet both investor and management expectations. Increasing expectations from board/ regulatory reporting Ensuring compliance with regulations is no longer a domain of just the CCO or CRO. Organisations not just need to focus on penalties levied for non-compliance with existing rules but also stay on top of new rules that continue to come into force. Keeping a tab on evolving regulatory landscape and ensuring compliance have become much more complex tasks requiring cross-functional efforts. This makes it difficult for CFOs to assess costs of compliance and non-compliance and take effective decisions. They who are looking to pursue M&A activity need to be alert to the implications of potential regulatory intervention, political opposition, and even consumer or activist involvement. 48

Collaborating for a connected future | Insights from Coalesce: Art of the possible Make the future happen Here’re a few pointers that indicate how CFOs’ role will evolve in the future: To accelerate readiness to operate in a digital world, there is a need for a mindset change driven from the top. Finance engineers and candidates with techno-functional skills is the need of the hour. Understanding employee expectations is critical to carve out policy interventions to create new opportunities for a broader set of candidates. An interesting shift in CFOs’ role towards “mentorship” is cited as a leading edge and CFOs’ will need to embrace talent as a key performance indicator. 1. Being a coach to employees: To win competition for talent, CFOs may need to shift from managing employees to coaching them on how to refine and apply their skills to create value and influence strategy. That requires a close understanding of the commercial aspects of the business— in essence how it makes money—and how technology can boost efficiencies, drive growth, and support an organisation’s broader strategic goals. CFOs need to be at the forefront of devising a new talent model – one that lays emphasis on the ability to access and interpret data, not just collect and report on it. The talent model should consider inclusivity, job rotation, and competency evaluation linked to new business outcomes. 49

Collaborating for a connected future | Insights from Coalesce: Art of the possible 3. Looking at digital transformation from the lens of finance: Digital transformation is fundamentally human-centric because it is about imagining new ways of value creation. CFOs stand at the forefront of driving innovation and data strategy to managing organisations effectively. They will have to start scrutinising digital in terms of finance metrics, such as return on digital investment, digital cost as a percentage of revenue, and cloud storage as an operational driver. Setting a clearly defined end-to-end data strategy and structure with real-time continuous data is imperative to enable instant insights and alignment of actuals and plan. Reporting will be event- driven, real-time, and relevant compared with the traditional transaction-driven reporting. A combination of technologies that enables touchless transactions and autonomous operations (prompting human intervention only as an exception and using internal and external data sets to generate forward looking insights) will shape up an organisation’s digital transformation journey. The ability to pivot quickly, provide timely insights, and reduce cycle times, is now at the top of the priority list for CFOs. 2. Serving as a trusted advisor with a forward-looking and commercially minded lens: As much as investors, regulators, and others may analyse an enterprise’s capital allocation choices and decisions, the finance function’s core goal is to serve as a trusted advisor not only to the CEO and the board but also to other C-suite executives. By applying a lens that is both forward-looking and commercially minded, CFOs can better identify and understand levers they can use to change course or improve prediction capabilities. Capital allocation seems the ultimate knot to untangle, involving countless stakeholders, competing priorities, and an uncertain timeline. However, this is an opportunity for a CFO to see possibility where others see challenge. The CFO needs to ask hard questions to ensure that your stakeholders are heard, and educate your leadership on the risks and value of each project. Stakeholders must collaborate towards a common goal, functioning as a team in both good and bad times. 50

Collaborating for a connected future Insights from Coalesce