The technology-led transformation driving a more strategic role for finance
Dec 09, 2020
The global pandemic has accelerated many businesses' adoption of digital technologies. As the traditional physical work environment changes, cloud-based systems, digital platforms, automation and AI have allowed organisations to continue to function while workers have been confined to working remotely.
Our new report, ‘Finance insights - reimagined’, conducted with the ACCA, explores the evolving role of finance - becoming a more forward-looking and data-driven business partner. And technology is key to enabling this shift.
Technology-led transformation efforts were underway before COVID-19, but the situation has sped up this process and opened the eyes of CFOs and business leaders to the possibilities. In the report, Brian Furness, Global Head of Finance Consulting, PwC, says: “One key lesson from the pandemic will be how truly transformative a lot of organisations have been digitally.”
Data as a differentiator and source of competitive advantage
For finance, the technology-led transformation agenda has two strands: the use of technology by finance and how digital transformation is impacting the whole organisation through the transformation of the business model.
In terms of the use of technology, our report shows that finance needs to expand its focus beyond traditional financial KPIs as organisations shift towards a purpose-driven approach. Around 35% of the respondents surveyed are already responsible for the integrity of aspects of non-financial data, and 80% expect to take on this role within the next five years. To do this, finance needs to take on new analytical tools and techniques to develop possible future scenarios and construct a broader picture of performance.
Changing how we view performance is as much about a mindset shift: focusing on delivering new finance capabilities through investment on emerging technology, cloud-based ERP systems, process excellence and automation. With standard cloud-based processes and automation on top, competitive differentiation is more and more about the data and what an organisation can do with this in terms of insight, decision making and communication.
This accelerated change has given a boost to digital transformation. We have seen a change in mindset and behaviour within the workforce and among business leaders to accept and use new technologies. They have seen what is possible.
Automate for process excellence
Robust processes are the foundation for any finance department and technology can help increase transactional efficiency and accuracy, as well as bring down costs. And by using automation it is possible to simplify and standardise more of these processes, while at the same time producing greater insights and high-quality data.
From the report, we found only 15% of respondents are currently seeing self-service reporting and the emergence of AI and machine learning freeing up business partners from routine data reconciliation and excel manipulation, but 60% see this happening within 5 years.
Not only can process excellence and automation improve efficiency and create value, but access to a broader range of information and insights allows finance to be more forward-looking. Data analytics and visualisation offer insight into where there may be a problem and what is working well. And finance can better predict and plan for different scenarios, proactively identifying risk and coming up with recommendations to change the way the business operates.
What can I do to stay ahead of the game?
The future finance function needs a broad set of skills, not just to use the relevant applications but to derive insight from data and understand how to optimise its technology for business advantage.
As part of this tech-led transformation of the role of finance, CFOs must:
- Develop a technology strategy that provides access to robust data sources and appropriate visualisation and apply automation to simplify and accelerate processes within finance.
- Identify the technology suite that enables the modelling and interrogation of data to develop scenario models.
- Remedy technology and data weaknesses in the organisation, focusing on the data sets necessary to deliver insight that creates customer value - well beyond traditional P&L and cost data.
- Exploit cloud-based applications as a fundamental part of the ‘digital core’ of the organisation.
- Equip your teams with the tools and skills to self-serve and innovate in the analysis of data and the provision of insight.
Download ‘Finance insights – reimagined’ for more in-depth analysis of technology-led transformation and the future role of finance.