Prakash Hariharan: ‘CFOs Need to Have a Good Partner Ecosystem’

"One of the things we see a lot happening now is there is a very strong realization that you need to have a good partner ecosystem."
Prakash Hariharan: ‘CFOs Need to Have a Good Partner Ecosystem’
Photo: Genpact

The role of the CFO over the past 10 to 15 years, amid economic recovery, expansion, pandemic, and now recovery and growth expansion again has had a considerable arc. Chief financial officers who have lived it and led through it have risen to meet myriad challenges. And for others who are outside the CFO world yet work directly with them, a broader perspective emerges. 

Genpact’s Prakash Hariharan is one of those individuals. Consulting for CFOs in a variety of industries over the past decade, Hariharan has had the opportunity as Senior Vice President of the CFO Consulting and Advisory practice to watch the trends and challenges evolve, and the role of the CFO evolve with it. Even as he has performed various roles within his $4B company, the roles have all revolved around finance and accounting. 

Prakash Hariharan

Prakash Haniharan_Genpact.jpg

Senior VP, CFO Consulting and Advisory, Genpact

Leads Genpact’s finance transformation business and growth function. Oversees consulting, digital and analytics, partnerships, M&A, advisor and analyst relations, marketing, and thought leadership.

Previous select roles:

  • Senior manager – account management and business development, Infosys
  • Business transformation manager – transitions and quality, IBM
  • Senior business analyst – manufacturing and logistics vertical, Cognizant

This interview has been edited for brevity and clarity.

ANDY BURT: Has the role of the CFO changed over the past 10 to 15 years? Where will it go next?

PRAKASH HARIHARAN: The short answer is yes — the priorities have changed over the last few years. And they will continue to change and evolve.  

If you look at the archetypes or responsibilities of a CFO, there is the operating excellence part, which is that you need to get the work done. 

What has really taken on a lot of momentum is … the technology and digital transformation part of the role. How should I think about my enterprise resource planning (ERP) given all the advancements in features and functionality and the maturing cloud capabilities? How should I think about robotic process automation (RPA), and then evolve to bringing in artificial intelligence (AI) and machine learning (ML) solutions? And now, how can I be more agile and scalable from an operating model perspective? 

Then there is the element around enterprise decision making. This is, how do I help my CEO and my other C-Suite counterparts make decisions that are fact-based and therefore allow us to make some bets and drive the entire enterprise forward? Hence, on enterprise performance management and forecasting, planning, analysis, and the broader enterprise decision making there is a huge amount of focus, especially as companies are coming out of the pandemic.  

Business and consumer confidence is on the rise. And I think a lot of our discussions with CFOs have started pivoting towards growth, as well as topical issues like inflation.

[Now] it is less about cash for survival, but more about cash for funding enterprise initiatives, the in-organic strategy coupled with how do I drive organic growth within the company, 

We use a term — the “chief growth officer.” We used to have a chief growth officer of the company and now we say that’s okay, the CFO has to play the role of the chief growth officer partnering with the CEO. 

How can one individual have a role in all of those arenas you just mentioned and still be able to excel in each of them, especially around the growth initiative?

HARIHARAN: How can we expect the CFO to kind of play all these different roles? It’s not easy, it is complicated and obviously, there has to be a lot of learning that needs to happen at both the individual and enterprise level. Because you have to lead by example, right? You need to be able to prioritize and adopt the new things which keep coming up. 

But one of the things we see a lot happening now is there is a very strong realization that you need to have a good partner ecosystem. Not only from a perspective of someone who needs to do the job, but I see leading companies now partnering with startups and new academic institutions and collaborating to learn from them. Not just their own industry, but also from a parallel industry, and get inspired. And then bringing that into your company context and industry context and seeing as to what could this perhaps mean for me and my company. 

One of the things we see a lot happening now is there is a very strong realization that you need to have a good partner ecosystem.

I think there is growing awareness that not everything can be done within the four walls of this company, and we will not have all the talent, the time, and the focus we need. Therefore, I think there is more openness towards building a good partner ecosystem. Not only in terms of getting the work done but also to exchange ideas and to inspire innovation. 

What is your assessment of how CFOs are managing their companies through this inflationary environment?

HARIHARAN: Frequently the response to managing inflation has been to pass on the price increase to the consumer, or, in some cases, absorb the cost and take a hit on the margin. 

However, we believe in order for you to be able to manage a problem like [inflation], you need to have the ability to make some forward-looking decisions coupled with a few scenarios. Think about scenario analysis as a method that organizations are now using to make flexible medium to long-term plans. You start with identifying one of your driving forces — it could be around revenue, cost, or margin — and then you identify the uncertainties within this broader objective, and then you develop models. And as the scenarios play out, you get to execute a set of predefined actions. 

All of that requires you to get data insights across the enterprise, and maybe outside the enterprise as well. A few forward-looking statistical models. And as you learn more in terms of the evolving situation, you need to act — you need to hone in on one of the [levers] or scenarios that you can take a set of actions. 

As an example, how should I think about my suppliers and how should I segment them? What suppliers are most important for me versus the others? How do I go to them with benchmark data to say, “Okay, I need to renegotiate my terms and my conditions with you in order for me to be able to better manage my costs.” 

We believe in order for you to be able to manage a problem like [inflation], you need to have the ability to make some forward-looking decisions coupled with a few scenarios.

This can be extended to segment the customer base. You need to continue to deliver a good quality of service, but you can evaluate and change how you service customers. This can provide insights and opportunities to improve cost and cash management. All of this requires a significant amount of automation and a significant amount of data analysis to be able to make some of those calls. 

Or perhaps, how do you forecast better? In a dynamic situation like what we have right now, forecasting anything forward is extremely difficult. Because everything keeps changing by the week. 

For you to do something like this, you need someone who understands the business and understands the data, the analytics, and potential outcomes. We call it the bilingual skill, by the way. Because one versus the other typically will not be able to solve the problem for you.

We also have a trilingual skill now, which is that you need to have a team where there is someone who understands the business context and the process context, the digital and the technology, and someone who understands the data and the analytics aspect. When the three of them are together you’re able to solve a problem in a different sort of way than what you would typically if you’ve got only a single type of skill within the team.

Are there any blind spots you think CFOs might have in 2022? How can they identify and address them?

HARIHARAN: I think “blind spot” is not the way I would phrase it. It is more [about] the possibilities out there. 

There was a time when working with a CPG customer, for example, it was important to ensure that all problem-solving examples shared with the CFO and finance team had to be CPG examples. If not, the client would say, “Guys, I’m in a different industry and my situation is different.” That was a few years back. 

But increasingly now, it is the other way around. When we think about data analytics and we’re talking to, let’s say, an industrial manufacturing company, they’ll say, “What can we learn from CPG companies, for example, who are slightly more advanced in terms of the way they leverage this particular capability?”

I think there are questions of possibilities, the possibilities in terms of what can be done, what could be the use cases, possibilities to observe and learn from other industries beyond your own. 


You can read more of Hariharan’s thoughts on managing through inflation here.