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The evolution of finance – are you ready?

by jcp

By Tim Wakeford, Financials VP of Product Strategy, Workday

Over the past 18 months, many finance organisations have fast-tracked their transformation initiatives in an effort to better meet the challenges of the future – whether its economic uncertainty or the move to a hybrid workforce. In fact, more than three-quarters of finance teams are now undergoing some form of digital transformation, according to our recent CFO Indicator Survey. From placing a premium on automation to greater use of real-time data to scenario plan and forecast, key areas of the industry are being redefined, meaning the office of the CFO has had to evolve.

To take advantage of the changes brought about by digital transformation – CFOs now need to have the right people and technology in place. Here’s how financial leaders can be ready for the disruption ahead.

Creating opportunity, identifying challenges

COVID-19 has created both opportunities and challenges, prompting many leaders to respond by accelerating digitisation. As companies have adapted, they’ve also discovered the value of automation, real-time data and more aligned finance processes. At the same time, the pandemic has highlighted that speed and agility continue to be key in business recovery. Data and automation are, therefore, no longer merely ‘nice to haves’; organisations have to modernise, streamline and create frictionless finance to meet the needs of customers and employees alike. This begins and ends with the CFO and finance team.

We recently sat down with our partner, Deloitte, to discuss how the finance function will evolve by 2025. Here are four key takeaways that will be transforming the finance sector in the coming years.

  1. The finance factory is frictionless

Frictionless finance – using technology to eliminate tedious manual tasks from key finance processes – will be critical to how banks will evolve. By combining machine learning and artificial intelligence, CFOs can make automation essential, eliminating non-core tasks. This means finance teams can close the books faster – reducing from a week, to only a matter of days or even hours.

Additionally, cloud-based Enterprise Resource Planning (ERP) systems will enable CFOs to integrate and automate key financial and operational business functions. Embedding blockchain into the finance function will further accelerate this trend, by enabling self-executing ‘smart contracts’ and the automation of manual processes, such as compliance and claims processing.

As a result of these technological advances, transactions will become touchless and frictionless. The CFO and finance team will be freed up to focus on activities that will drive growth and innovation as well as effectively steering through uncertainty.

  1. The power of insights

Almost half (49%) of CFOs found that making decisions based on accurate, timely data was their biggest challenge at the beginning of the pandemic. In fact, COVID-19 has demonstrated the importance of timely, decision-ready data for companies to fast-track growth, adapt quickly, transform ways of working, and future-proof operations.

CFOs have to lead from the front and be the champions of analytical, data-driven insights that can make a real business impact, bringing together different departments and breaking down data siloes to create a single view of the business.

  1. Real-time is the new mantra

Focusing on data will have another consequence: finance will go real-time. While CFOs will still need to meet demands for periodic reporting, they will also have to accommodate outside investors that want more frequent and real-time performance information. Driven by the pandemic, organisations will also not be forecasting once a month or quarterly – it will all be happening in real-time. With information instantly available to those who need it, CFOs can focus on discovering new insights and acting on them.

Our customer, Aon, is a prime example of how real-time analytics can transform business. When COVID-19 hit last year, the multinational British professional services company, spanning120 countries, moved to remote working. Instead of demoralising teams, this actually encouraged them to break barriers and attempt their first fully-remote close. Aon’s finance team was able to harness real-time data and transparency across the regions to close remotely whilst also having one region able to close a day early. Demonstrating that in real-time anything is possible

A prime opportunity for CFOs

As the dust settles from COVID-19 and businesses start to reflect on the past 18 months, it’s clear that digital transformation has redefined the finance function, with the focus now shifting onto data to drive the business forward.

By using automation to move the focus from transactional tasks to high-value areas – such as tax strategy, treasury and risk scenario planning, and more predictive analytics – CFOs are now able to create a more strategic finance function, improving its efficiency and ability to add value for customers.

Ultimately, by harnessing transformational technology, CFOs are in the prime position to lead their companies to become more agile and use data as a currency to produce valuable insights. Now is the time for the finance function to emerge and make sure the roadmap for success is centred on data, collaboration and agility. In doing so, they will be ready for whatever lies ahead.

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