Finance professionals the world over are coming to grips with the recognition that in a digital economy where the only constant is change, there can be no such thing as a static finance department. Cycle times based on delivering reports and information to the business at month’s end are no match for a live, dynamic, and fully integrated business that must base its decisions on what is happening in the present.
New regulations, an influx of structured and unstructured data at unprecedented scale, and a blurring of traditional business models are just a few of the factors putting pressure on finance organizations, which must evolve accordingly to provide the business with the real-time insights it needs to remain competitive. What makes this new dynamic truly fascinating is that the confluence of internal and external pressures is colliding with a dizzying array of new technologies and capabilities — artificial intelligence (AI), cloud, predictive analytics, business networks, the Internet of Things (IoT), blockchain, in-memory computing, machine learning — that are creating a tidal wave of opportunity for finance organizations to meet the challenge. The opportunity for finance isn’t just to cherry-pick which technology or trend will help close the books faster — it’s to look at the big picture by reimagining the entire finance function and its role in helping the business succeed while constantly evolving.
Four main tenets inform how finance can optimally support the strategic evolution of the business:
- The Chief Financial Officer is the new top dog of strategy definition, being the only C-level executive that spans all areas of an organization. From statutory reporting to forward-looking guidance is the only way to go.
- The second is from an operational management perspective: How well can finance help manage the flurry of change? This entails more rapidly integrating mergers and acquisitions, and supporting the business by modeling the impact from various build, buy, and divestiture strategies.
- Third, the finance function must be measured in terms of the business performance. As cycle times condense into a “soft close” approach, will a finance organization be agile enough to provide information to the business in the time it needs, not on a month-end close cycle? Supporting the performance of a live business includes factors such as support for more dynamic planning, projections, and instant insight into working capital management.
- Fourth is in the area of efficiency and compliance. By automating existing back-office transactional work, finance organizations can see cost savings of up to 40%; by harnessing emerging technologies such as AI, machine learning, and business networks, these savings could double. With the ensuing efficiency gains, finance departments can devote the added time and saved expense to the first two strategic goals of being a better partner to the business from an operational and performance perspective.
With the most compelling emerging technologies affecting how the finance organization serves the business, we can be certain that the finance function of today will look very different in five or 10 years. As the full impact of these technologies becomes clear, the result will not be limited to a technology refresh or a systems overhaul; rather, it will be focused on business outcomes. Technology is unlocking many new doors, and businesses are willing to explore where those doors lead because they clearly recognize that standing still is not an option. In order to successfully bridge the gap between strategy definition and operational and financial outcomes, a finance organization must continuously evolve, rather than transform, and leverage the enabling technologies to redefine the business, rather than optimize existing structures.