During the last decade or more, the business world has officially moved into a new and exciting digital age. With intelligent or “extreme” automation on the forefront of many company’s agendas, CFOs have to be prepared for this shift that has already begun taking place.
Ash Noah, CPA, CGMA, from the Association of International Certified Professional Accountants connects with CFOs globally to understand the changing role of finance. He recently spoke to us about how technology coupled with competency can fuel business agility and the success of finance as a whole.
So what can CFOs and their teams do to ensure they keep the pace and harness the power of new technology? First it’s important to understand that many are at a crossroads. It’s estimated 47 percent of CFOs believe that their current finance function doesn’t have the right mix of capabilities to meet the demands of future strategic priorities. In addition, a whopping 56 percent cannot focus on strategic priorities because of time spent on compliance, controls and costs. This data clearly shows that it’s time to expand strategic roles and reduce footprints as analytics migrate.
CFOs should understand that technology is an essential and critical addition to the organization and actually enables the expansion of roles within the finance department. Technology, including cognitive computing, in-memory computing, visualization, process robotics, cloud and advanced analytics, is creating positive disruption. While this can be perceived as “death by digital”, its actually an enormous opportunity for the finance function. The automation of routine processes and reporting is freeing up finance to take a more active role in decision-making processes and company strategy. With this shift, CFOs need to be thinking about what skill sets their teams need to be successful.
New Operating Model
A recent survey by the AICPA and Oracle of more than 500 finance professionals across the United States and Canada revealed some interesting results.
Digital transformation, centers of capability, and agile teams empower the new operating model. Individually and together, new technologies reduce the cost of many core financial planning and analysis (FP&A) deliverables and may also yield better insights through data mining and predictive analytics, for example. On-demand and self-service capabilities can also improve decision-making and help FP&A achieve greater differentiation.
Creating clustered business partners, which are agile teams that serve a cluster or group of markets, is also important. Resources may be assigned to a single market, but the team may likely work across multiple (or all) markets in the cluster. Agile teams work closely with specific business partners on their particular needs. One advantage of this approach is that it can provide a mix of stability with agility: teams that work with the businesses may find themselves in a fail-fast or move-on environment that is willing to take some risks to achieve the desired results. But because these teams remain connected to the capability center and check in periodically to share leading practices, they help foster organization-wide awareness about what works and what doesn’t that can provide a baseline of stability.
This model not only enables FP&A to enhance its influence and add more value, but also provides a way for finance leaders to more effectively manage their talent. Experience and knowledge can be leveraged across a broad span of business partners, and FP&A itself becomes a more desirable career destination for finance and analytics professionals.
Developing a model around agile teams can also help smooth the peaks and troughs often associated with corporate reporting and strategic planning by enabling leaders to deploy resources more nimbly. Those same resources can help increase awareness around smaller markets or products by devoting focus to them as time allows. This economization of talent can be a major advantage, especially when top-level FP&A talent can be hard to come by.
Attributes of Agility
The same study revealed specific attributes that agile teams possess.
Specifically, these teams:
- analyze opportunities and mitigate risks;
- measure intangibles;
- accelerate time to market; and
- conduct forward-looking analysis.
To build agility, the finance team needs to work with the organization as a whole and also employ some essential building blocks, including information, insight, influence and impact.
CFOs must also take a hard look at the competencies of their finance team. Business agility is achieved when you have the right people with the right skillsets to deploy the new technologies. Skills such as business partnering, decision making and analytical thinking taught through the CGMA Finance Leadership Program are critical to help finance leverage technology to its greatest potential.
The bottom line is that in order to be agile in the digital world, CFOs and their teams need to unlearn some things learned in the past. It used to be that technology was applied to a process. However, in the new world, process is applied to the technology. Specifically, this means technology is essentially determining the process. So how can we apply process and prevent finance from being a roadblock to transformation? It’s simple: develop a love for learning to transform finance functions.
At the end of the day, digital is here to stay so it’s crucial that CFOs and their teams adapt an agile approach. Agile businesses are proven to have more revenue and growth that non-agile teams, which proves that investing in agility truly pays off, now and when it comes to future hires.
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