Was 2021 a breakthrough year for Finance Function 4.0?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
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The last 12 months have been challenging in countless ways, and disruption and change have come to every part of life and business.
By way of an end-of-year sign-off, I'd like to briefly reflect on what I think have been the defining trends and tendencies in Finance over a very, very strange year - and what the world might look like through 2022 and beyond.
Transformation everywhere
The pace of change has been extraordinarily rapid over the past 12 months, a phenomenon that has seemingly affected every field and almost every element of life.
For its part, the world of Finance and FP&A continues to be transformed most dramatically by the emergence and adoption of new technologies. Digital transformation is the defining trend in Finance over the last half-decade, and yet its impacts are still only beginning to be felt.
Automation, machine learning, and, further into the future, technologies such as quantum computing, are remaking Finance in their own image. We must be careful to ensure that we use these new tools in mindful and sensible ways, with a focus on value creation.
Value creation, not service provision
In fact, value creation is the watchword for Finance professionals more generally. As more and more of the work of technical accounting is completed by machines, and as we develop increasingly sophisticated processes to reduce the number of human hours required, we are suddenly presented with a huge opportunity: to move up the value chain, proving the importance of Finance as a strategic and forward-thinking function at the very heart of our organizations' futures.
The Finance Function of the future emerges
In this way, we are beginning to see the emergence of Finance Function 4.0. The pandemic has hastened this paradigm shift, in particular by catalyzing (or forcing) the adoption of modern digital technologies such that they are now a prerequisite for running a business. Digital transformation increasingly means that Finance professionals are now occupying new and distinct roles - those of the business partner, who is concerned not only with the 'head down' numbers work but with the meat of business development and strategic thought.
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And this is just the beginning. As I wrote earlier in the year, I think we are likely to see a fundamental change in the way we 'do' Finance. In particular, I imagine something like the establishment of "centers of excellence" for accounting - organizations devoted entirely to the completion of technical accounting tasks and the management of automated accounting processes, to which we can entrust the nitty-gritty of the Finance Function's work.
Sustainability is the only game in town
Most recently on LinkedIn, I've been writing about ESG - what this emerging field means for Finance professionals and for investors, what actions managers need to take to address it, and why those actions are important.
ESG is one expression of a general understanding that climate and sustainability are the primary challenges facing everyone. These are the concerns that will define the rest of this century, and every decision is to an extent filtered through this prism.
Whether through an embrace of ESG or through a more deeply considered approach to the historic global shift that is occurring, we will all be forced to reckon with sustainability and climate justice in the next 12 months and beyond.
Mindset is everything
This brings me to what I think is the crucial learning from 2021: survival is about the flexibility of mindset. We are in a fundamentally different world from the one we left a couple of years ago, and the speed of that change isn't going to lessen. Some people think this is a bad thing - that 'risk' and 'uncertainty' are necessarily downsides. I disagree. With an open, inquisitive, intellectually rigorous mindset that puts people and value at the heart of everything we do, I think the Finance Function is just beginning to show its potential. What will Finance look like in 2022 and beyond? That is entirely up to us to define.
Here are the top series as published on LinkedIn in 2021...
All links will take you to the last article in the series and by scrolling down to the bottom you can find all previous articles in the series. Stay tuned for more content in 2022! Among other topics, we will tackle...
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Anders Liu-Lindberg ?is the co-founder and a partner at the?Business Partnering Institute ?and owner of the largest?group dedicated to Finance Business Partnering ?on LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company?Maersk . I am the co-author of the book “Create Value as a Finance Business Partner ” and a?long-time Finance Blogger ?on LinkedIn with 65.000+ followers and 140.000+ subscribers to my blog. Recently I became an advisory board member at?Born Capital ?to help identify and grow the next big thing in #CFOTech.
eFX Sales - DCM - Project Manager - Business Analyst - CRM - Salesforce - Consultant
2 年Interesting! I like the part about how much innovation gets incrementally generated from technologies such as AI and the willingness to never stop taking these whole projects to constantly new heights.
I help CFOs and business leaders of fast-growth companies reduce operating costs in excess of ￡30m by leading and developing high-performance Commercial Finance, FP&A and Business Partner teams. Finance Director.
2 年I still feel for many they are at 2 0 so still evolving! Constantly we hear and know digital transformation is in place, finance are expected to be delivering more, particularly value delivery of an increasing scale, not low value activities. But I think there is still a way to go. I'm very positive that it will come but the gap to get to 4.0 seems evident for many.
Co-Founder at Topicflow | is perf mgmt broken?
2 年ESG has really become more of a trending topic. So many of my conversations with teams looking to create learning and development cultures within their finance functions have involved how they can start to become more strategic thinkers, but with a view through an ESG lens. Hoping to see this catch more momentum in the years ahead.
Director Wharton FP&A Certificate Program | Corporate FP&A Trainer | ex. P&G, Unilever, Squarespace | 100k Finance Audience
2 年The point on Finance needing to have a mindset of being open, inquisitive, and intellectually rigorous resonated with me Anders. Finance can add a lot of value by asking tough questions that get cross-functional business partners to think outside the box. That should be on every Finance team's priority list.