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CFO “No” to CFO “Go”

Cutting Edge Ahead

Many professionals have heard the expression, CFO ‘No’ and CFO ‘Go.’ The Finance function has rarely been described as cutting edge or the center of innovation – but that is changing. Finance is becoming a catalyst for change.

Technology has been fast-changing, impacting all industries and functions with no exception. In the past, the Finance function was slow to innovate, but as the cost of technology continues to decline and the benefits easier to realize, more CFOs have embraced technology and are leading the change reaching beyond the Finance function. Silos are being broken down as Finance is increasingly collaborating with IT and the Business.

Success is not guaranteed, but those who do not embrace the change and lead their organizations will be left behind and will ultimately fail their internal and external stakeholders.

3 Signs of the Changing Times

1.  A New Co-Pilot in the Making

The role of Finance has been changing for years, but this change has accelerated recently.  Business Partnering is taking a front seat as business leaders no longer look to Finance for rearview mirror analysis of the past but rather expect analysis that drives performance and impacts future results. To create increased capacity onshore for Finance, monthly recurring activities (like forecasting and variance analysis) are being offshored and enhanced by technology like AI, ML, and RPA.     

So, what are the implications of this increased capacity for the Finance teams?

Business leaders expect data-driven analysis to enable timely and relevant decision-making, impacting the existing Business, and driving value creation for the shareholders. To deliver on this expectation, Finance needs to invest in building a trusted relationship with key business leaders. By including Finance into all relevant discussions, Finance will be able to gain insights not only about the current operation but also about future growth opportunities focusing on value creation.        

This is a new role for most Finance professionals requiring new skills to be successful. Hard skills like operational and commercial mindset, excellent problem solving and design thinking abilities, good business acumen, and soft skills like communication, customer centricity, and collaboration are keys to success.    

2.  Seeing the Forest from the Trees – Ease of Access to Data

Most Business leaders have strong business acumen and don’t need hand-holding when it comes to recurring monthly financials. They want to have just-in-time access to their financial performance when they need it. Generally speaking, while Finance agrees with this request/desire, it is uneasy about granting others outside of the Finance department access to financial reports.

In my article From Drowning in Data but Starving for Insights to a Resilient Data-Driven Culture, I wrote about the importance of data governance and data security. ‘Access rights can be controlled, and access points monitored, reducing the risk of theft and mishandling of the data.  And just as important, the risk of having duplicate data is eliminated, further improving data governance’.

Self-service provides a competitive advantage to companies by freeing up resources to focus on value-add activities rather than delivering mundane, frequently out-of-date reports. This mind-shift does not happen overnight. Companies will not be able to recruit all the talent needed, so it will be up to them to develop their teams with new skills like customer experience, storytelling, and data science.

3.  New Ways of Working

As companies continue to embed technology to increase business effectiveness, there is a need to pivot the finance organization to be ‘ready’ for the 21st century. According to Deloitte’s Crunch Time V – Finance 2025, technologies like robots, blockchain, Robotic Process Automation (RPA), Artificial Intelligence (AI), and Machine Learning (ML) will require a more diverse Finance organization and one that also integrates freelancers and gig workers.

The Finance organization’s success will be measured by impact and value creation, which requires a hybrid workforce. According to Tracy Levine’s article, 5 Trends Impacting the Future of Work, ‘Agile teams require constant evaluation and realignment of team member skills.  Building agile teams will lead to an increase in leasing freelancers versus buying talent that will become permanent employees. The future of work will continue a trend of leasing freelancers over investing in large permanent workforce’.

The successful increased collaboration between Finance, IT, Operations, and Business is required, eliminating previously existing silos. These cross-functional collaborations will further enhance the value creation by looking at operational and commercial business issues holistically, resulting in better decision making and stronger execution.

Deloitte surveyed Finance Professionals about their expectation for the Finance function in 2025.  The answers varied widely to the question of ‘Which one of these expectations do you think is most likely to be true for your organization in the year 2025?’

  • 36% responded ‘The Role of Finance – Finance will double down on business insights and service, when operations are automated’
  • 21% responded ‘Finance Cycles – Finance goes real time. Periodic reporting will no longer drive operations and decisions – if it ever did’
  • 13% responded ‘The Finance Factory – Transactions will be touchless as automation and blockchain reach deeper into finance operations’
  • 10% responded ‘Self-Service – Self-service will become the norm. Finance will be uneasy about it’
  • 20% (or more than 800 Finance professionals) responded ‘Don’t know / Not applicable’

In 2020 with the pace of technology adoption accelerating, these answers might be significantly different. Nevertheless, the change is here, and those who are not adopting their Finance business model will be left behind. Technology is an enabler that will drive business effectiveness, creates capacity for value creation through better decision making. Companies’ success will be highly dependent on how they pivot their workforce to a more distributed and agile workforce.  

Big Thinks April 2021 Cover Tracy Levine Forbes Coaches Council and CEO Advantage Talent Inc

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