How should CFOs prepare for the future of the finance function?
Finance functions were once focused on balancing the books. But technological advances offer an opportunity to transform them into data-driven decision-centers
Building the future finance function: technology plus people
Our research shows that many CFOs believe that their current finance function is not equipped to meet the demands the future will place on it. Forty-seven percent say their current function does not have the right mix of capabilities to meet its future priorities. Sixty-nine percent see the finance leader role fundamentally changing as traditional finance tasks are automated or managed in shared services centers.
Many senior executives are, in fact, underestimating the changes on the horizon for the finance function. As technology, globalization and demographic trends continue to disrupt organizations, whole industries and indeed the working world as a whole, the role of the finance function will increasingly be brought into question. Where once its remit was predominantly that of a reporting function that focused on balancing the books, it will become a data-driven decision-center.
Technologies that will help transform the finance function
Advances in new technologies (see below) offer CFOs an exciting opportunity to reimagine what the finance function should look like. In addition, many CFOs are now key players in driving adoption of these technologies more broadly in the organization, and in leading the transformation that ensues from technology innovation.
But to make the most of new technologies’ ability to save costs, manage risks and increase insight, finance leaders must challenge assumptions, take calculated risks and encourage experimentation. At the same time, they must also manage the risks inherent in each technological innovation.
CFOs must make bold moves to build a finance function that has the right people, with the right skills, to complement and get the most out of new technologies.
Traditional approaches to finding and developing talent are under pressure as a result of major demographic and technological shifts:
- A talent shortage has hit the developed world.
- Millennials will become increasingly influential.
- Increasing use of smart machines means that organizations must remodel the roles of smart people.
Given these challenges, CFOs will need to:
- Design a future operating model that focuses their best people on key priorities and delivers a smarter, more forward-looking and resilient finance function.
- Challenge their own and others’ assumptions about what constitutes finance talent, how to find the right profiles and develop the skills needed to thrive in an increasingly connected, data-rich future.