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17 December 2019 10 min read

Turning finance on its head

Jessica Wilson

Jessica Wilson
Senior Consultant | Financial services | London

Mark Glendenning

Mark Glendenning
Manager | Financial services | London

Finance is uniquely positioned to create and preserve enterprise value. A function that used to be characterised as an expensive back-office function is widening its mandate to become a strategic partner to the whole business. However, this doesn’t remove its core accounting and stewardship function. To enable this shift, CFOs need to equip their teams with the tools to move from a transactional and cyclical focused function to a continuous, responsive and data driven strategic partner. Like any leader of a corporate function searching for sustainable profits, it is the responsibility of the CFO to evolve their function to create more profitable channels for their business.

Finance transformation that was once focused on centralising, outsourcing and offshoring is now shifting towards intelligent automation technologies to streamline processes and boost insights while further reducing cost. Robotic Process Automation (RPA), Artificial Intelligence (AI) and Digital Ledger Technology (DLT) such as Blockchain, are just some of the tools enabling this digital shift. As this technology rapidly matures, the automation proposition is ever-expanding, changing both the landscape and shape of finance as we know it.

In the future finance won’t have a single core ERP with a reporting suite layered on top, we’ll have a DLT based ERP system and a suite of AI driven insight and reporting layers to draw from. These will be fully cloud based and cyber security will become even more vital. Decisions will need to be made about how to adopt these technologies into the operating model. CFOs with offshore functions will need to decide whether to bring the function back onshore, automate offshore, or do a bit of both and new capabilities will be required to govern this ‘virtual workforce’.

Not only will the landscape change, but also the shape. The typical pyramid structure of today will look more like a diamond with less human effort required to ‘transact and operate’ and more to ‘drive and control’. This shift will enable the rapid distribution of resources to address the highest priority issues, resulting in a more responsive and agile Finance function.

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Striking the right talent balance is key to unlocking the full potential of these intelligent technologies. Tomorrow’s finance professionals will need to be cross-skilled to tackle multi-disciplinary tasks that fall into their remit. There will be a need for systems, data scientists and change management personnel who understand Finance, to be embedded in the function. We often hear CFOs tell us they need to focus on tactical technology fixes, given the broader strategic change driven by the technology function is not happening quickly enough. These overwhelmed IT departments may be unable to keep up with the pace of change in an automated Finance organisation, so CFOs need to be prepared to lead the continuous automation journey and pioneer new technologies, supported by new capabilities and expertise. As advanced technologies rapidly mature, skills gaps will become more prevalent and talent acquisition more challenging with demand for these skills likely to exceed the supply in the short term.

Talent pathways will also be impacted. The majority of benefits currently arise from automating transactional and operational activities, the core layer of Finance that used to be a training ground for junior staff to understand the fundamentals of Finance. The approach to training and development and ensuring talent density within the right layers will require a rethink.

These challenges were recently exposed in a global publishing company after they automated aspects of their core product sales and revenue reporting using trend and visualisation tools to produce real time insights. While this freed up capacity, it highlighted a talent gap requiring a shift from simply understanding what the business drivers are to combining these with commercial acumen to drive and shape strategic initiatives.

Overall, intelligent technologies are simply one part of the equation. Successful automation requires a transformational approach combining data, systems, process and operational excellence in addition to people changing to work in a more sustainable way.

Across the rest of this series we will explore some of the intelligent automation technologies that are disrupting Finance. Up next: Are robots taking over your finance function?