2020 : Complete transformation of finance department
12 juin 2017 | Share it on social networks
Digital transformation has brought about a lot of changes to the everyday life in all industries, and their finance departments are no exception. While some are claiming a complete death of finance departments by 2020¹, all at least agree that, in the years to come, the role of a CFO is bound to change drastically².
Technology is finally catching up with the requirements of financial professionals. After years of complex systems often involving large architecture and used by a centralised dedicated team, new ways of working (like Cloud or SaaS) are finally getting their hands on the domain of finance. By doing so, the ability to collect, manipulate and organise data to produce reports will change. Furthermore the necessity to dedicate a full time team will disappear in profit of delegating a lot of recurring activities to cross functional integrated teams who will support the different branches of 2020 firms.
Growth of outsourcing and shared services is testimony that CFOs are prioritising the re-engineering and transformation of finance activities and are in search of a new model for the future. The need of tomorrow’s CFO to optimise finance operations will be greater, leading to two significant challenges for them :
- Finding the balance between what will be transformed to a cross functional activity and what will remain dedicated to the CFO’s department. Thus creating a new model that will work efficiently and provide a better service and insight to all partners.
- Redefining the activities and responsibilities of the CFO’s department. The core role will have to shift to coordination of cross functional teams and usage of the information collected to create high added value analysis regarding strategies to adopt.
This means that the finance department’s focus is expected to shift from a global cost management authority approach to a more business oriented approach. This implies using the tools that business intelligence provides to CFOs and finance departments : big data, analytics and statistical models are the words of tomorrow :
- Less time dedicated on recording and verifying numbers and more time making the data connections and explaining the numbers implications to the business - applying the finance focus on decision making.
- Not just querying data and reporting on required information, but regressing, correlating, forecasting and predicting future business scenarios through connecting the data points. For example, when analysing customer profitability, business intelligence will identify which customers are the most profitable, while analytics will answer why they are.
- Predictive analytics, forecasting future performance based on past performances, will be a key enabler for tomorrow’s CFO and their finance operations.
Tomorrow’s CFO will need to ensure finance is a catalyst for change across the business, driving outcomes that affect the long term business performance, not just short term financial outcomes or one-off cost reductions. In this respect, there is much more that can be done, and in order to achieve this kind of transformation, a CFO will increasingly ask for the services of statisticians, data scientists, behavioural scientists, economists and even anthropologists. This brings new value to the finance profession as a whole, opening up exciting possibilities for what tomorrow’s finance career can be.