Finance of Future – Is your company ready? And are you personally ready?

This article explain the market, business and technology trends & rational that drive major change for the finance function of all companies. It explains of how the role of the CFO and of all Finance staff will significantly change.

Market, business and technology trends impact everyone (companies, individuals, YOU)

Products are moving to services. Outreach to customers is going direct. Everything is getting connected. Ecosystems of partners are collaborating to delivery more value. Customer behaviors and expectations are changing.

We see Artificial Intelligence embedded in business/ daily use devices, Smart/ autonomous vehicles, connected fleet management, 3D printing, Mobility as a Service, Smart home/ building/ transport/ city infrastructure.

These and other trends are changing business models and operating models.

Finance is the heart of enterprise transformation

Finance is a mirror image of the real world. Finance can tell/ analyze/ and increasingly predict the situation of an entire company. Transformation takes place across the entire organization and individual business functions. Finance transformation can drive and direct strategy, ensure financial viability of business model transformation, cybersecurity, data privacy and more. Finance Transformation can also provide important guidance to other transformation efforts. It can help Customer Experience Transformation innovate billing & revenue management models (which helps build better customer trust & loyalty) and provides a better buying experience. It can help the Supply Chain transformation optimize selection, fulfillment and payments (which helps connect buyers, suppliers, and third parties and modernize production with IoT).

The business imperatives and role of the CFO is evolving

There is an increasing need for the Chief Financial Officer (CFO) to support corporate strategy, provide business insights, manage risk & compliance and manage the cost of finance.?Over 90 percent of senior financial executives believe that finance should facilitate collaborative enterprise planning to ensure that operational plans are aligned with financial and strategic plans. One of the top 5 skills for the future finance executive beyond financial skills is already data science and analytics. Leading companies increasingly automate their finance operations to free people to focus on more insight driven and analytical value contributing work.

The work & focus of Finance of the Future

Finance will operate like a "factory". Most financial transactions will be touchless. Automation, blockchain and other technologies will enable finance operations on an unprecedented level. Work shifts from traditional processes to system configuration & maintenance. ERP systems, Robotics and smart applications will handle much of the daily operations end-to-end. (Cloud) ERP systems will enable plug-and-play of talent and technology. Finance applications and microservices will integrate third party systems/ services (ex: ecommerce, vendor interfaces, payroll services).?Blockchain will facilitate much of the organization's intercompany transactions and interaction with externa parties. Applications will flag compliance violations and business concerns that are complex to spot/ track for humans. Humans will get involved in exception handling and difficult/ critical/ judgement decisions.

Self-service enables people from across the organization (and extended partner ecosystem) to resolve many tasks where they have requested support from the Finance team. Service becomes available 24/7 and further frees time of Finance staff. Focus is on customer experience.

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Finance workforce has now much more time and will focus on business insights and services (as traditional finance transactions/ operations are increasingly automated or addressed through self-service). Finance people will increasingly use smart dashboards, natural language and voice integration empowered applications, virtual agents & advisors. Further, latest technologies and algorithms will increasingly take on analytical work. They will push humans to move toward more judgement-based work that collaborates effectively with advanced technologies. Needed skillsets for finance staff will evolve to handle applications, use latest technologies and do analytical work.

Finance will improve data quality & availability. Data has been and continues to be an ongoing challenge in Finance. Good data is needed for correct results and to leverage the capabilities of Advanced Analytics.?ERP systems, APIs, and other advanced technologies will drive data standardization and usefulness. Increasingly rich/ just-in-time data will enable Finance to do things previously not possible: predictive/ prescriptive analysis, scenario/ simulations, real-time business guidance of functions, projects, individuals in their daily work.

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Finance results become immediately available and drive continuous business decisions in real time. Real-time, customized, on-demand, 24/7 reports replace the traditional periodic reports. Those were never able to provide full and needed decision support because of a lack of timeliness. Financial cycles will become less relevant and disappear. Companies will fulfill regulatory reporting requirements by simply issuing a report at specific time or covering a requested period. There will be no closing of books. Information can give an accurate picture continually at a specific point in time. Much of the close, consolidation and reporting will become automated. Cognitive will technologies will help identify errors, anomalies and take corrective actions. Real-time close & reporting will become available through self-service.

Finance will have an increasingly diverse workforce (Automation, Self-Service, crowdsourcing, freelancers, gig workers, temporary external project member & specialists (data scientists e.g.) AI, Advanced Analytics tools, Virtual agents & advisors, Shared Services/ GBS, external outsourcing, etc.). Their interworking will be new and require new management models and skillsets.

Finance will adopt new operating models to better manage all the above. A new operating model needs to address all the people, business, technology, company culture aspects, new performance management, metrics, KPIs, rewards & incentives and personal career planning. New ways of working will be necessary. Finance leadership will be stretched to meet these complex challenges.

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Conclusion

Finance of future will revolutionize the Finance function as we know it. It will not only affect the CFO and all financial employees, but also have major impact on all other business functions and people. Finance will become a very valuable partner to each person in the organization. Finance of the future will create great opportunities for companies to improve their organizations productivity and ability to better win/ serve customers. It also, however, will create massive challenges for leadership and their organizations. Are you ready?

About the Author Alex Steinberg 方泽昂: Alex has directed and/ or supported digital transformation, intelligent automation & augmentation projects for top client brands for individual business functions, across front/ middle/ back office and entire organizations end-to-end.?He has been a key contributor to develop/ build a world-leading RPA & intelligent automation practice. Several of his projects/ programs have won industry awards or other client/ CEO recognitions. He is and expert and leverages the full spectrum of advanced technologies, systems and tools. Alex combines deep, hands-on project experience with industry best practices. He is in close exchange with other experts across the industries to incorporate other best practices, project learnings and innovative approaches. He has been in China for over 10 years and is very familiar with Chinese culture, history, philosophy and language. In his private time, he has served his Chinese friends as a tour-guide to show them the hidden and beautiful places in China.

Special credits: This article extensively leverages the content of Deloitte and its partner SAP. Their methodology products & services are deployed around the world.

Legal disclaimer: This article represents my personal opinion and does not reflect that of my current/ previous employer(s) or clients. The article intends to increase awareness, understanding and dialog about Health Care and Life Science issues. It does not present any offer or advice in a legal sense. Markets and technology change quickly and information gets out-of-date. The reader is advised to always seek individual analysis & consultation.