Finance Transformation 4.0 - Your Action Plan

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Technology is revolutionizing the work of Finance professionals. As ever more accounting tasks are automated, and as digital tools become even more firmly embedded within the fabric of every organization, the priorities of the Finance Function are changing.

As we transition towards Finance Function 4.0, we should remember its most important principle: in the modern paradigm, the role of the Finance Function is to create value. So how do we get there?

The mission

The most fundamental element of Finance Function 4.0 is the transformation of Finance from a cost center to a profit driver. Gone are the days in which Finance is treated as a financial burden, or as an overhead to be minimized. Certainly, technology is enabling organizations of every size to drive huge efficiency gains in the Finance Function and elsewhere. But this doesn't mean that Finance becomes less important or relevant - in fact, the opposite is true. In modern organizations, the Finance Function is at the very heart of any business, not only providing data but also making deep contributions to vision and strategy, and enabling decision-makers at every level to create better real-world outcomes.

The modern Finance Function is driven by people, and enabled by technology. It is a field based on relationship-building and value creation, leveraging the huge power of tech and ensuring that it is applied in useful and transformative ways.

Transforming to Finance Function 4.0

Regardless of the size of your organization, now is the time to begin the transformation process to Finance Function 4.0. Everyone in Finance and beyond has a role to play in this transformation.

First, there must be alignment on the mission: to position Finance as a driver of profit and value within every organization. Value creation is the most important task for the modern Finance Function, and in the age of exploding automation, this is more possible than ever.

To get to that stage, we need to agree on an operational vision. In short, that involves the combination of analysis and interpersonal partnership skills to make sure that all business decisions are driven by data - and always in consultation with Finance. The modern Finance Function has a crucial role to play in the translation of data into actionable insight. It's not just a data 'farm', but rather a fully embedded support structure that allows organizations to take actions that lead to better real-world outcomes.

The transformation plan

To fulfill the potential of Finance Function 4.0, we need to agree on a transformation plan. This will be seen on a microcosmic level within each organization, and on a macro scale across the profession. Individual businesses need to understand the challenge and the opportunity, but the profession as a whole also needs to ensure that the support structures, training, and role models are available to help professionals make the leap.

A fundamental part of this plan revolves around a firm grasp of the new Finance operating model - one in which the nuts and bolts of Finance work are conducted in great part by machines. Automation frees up Finance Functions to move further up the value chain and create and seize new opportunities. Clearly, this requires concrete investment in automation and other digital transformation activities, delivered in tandem with human expertise. As we explored in a previous article in this series, humans still have a key role in an automated Finance function, and part of this should focus on process design. We need to get the basics right first, with the creation of sensible, easily understandable processes that can be passed on to automated systems to generate useful outputs.

Some organizations are well on their way towards a Modern Finance Function, while others are just getting started. A comprehensive gap analysis, performed by Finance and leaders from across the organization in question, will help managers work out how far away they are from the proposed new operating model, and the steps they need to take to get there.

Finally, the importance of training and role models should not be underestimated. Professionals in Finance Function 4.0 are expected to take on work and responsibilities that might be outside their normal wheelhouse, and we need profession-wide and profession-standard training and support to help them meet those challenges. With the right structures in place, and with visible role models showing early-career Finance professionals how they can succeed, we will have taken a major step towards the establishment of Finance Function 4.0. Where are you on the journey towards creating Finance Function 4.0?

 This was the sixth and final article in my new series "Finance Function 4.0". You can read previous articles in the series below.

Welcome To Finance Function 4.0

The Finance Professional 4.0

Career Paths in the Modern Finance Function

The Art of the Possible for Finance 4.0

In The Age Of Automation, Finance Must Know Their Processes More Than Ever

Do you want to learn about the changes that are happening in Finance and Accounting these years then I have few recent articles for you that you might find relevant. Check them out below!

A Week In The Life Of An Accountant Post Finance Transformation

Re-Imagining Finance In The Face Of The Pandemic

Data Agility Is The New Competitive Advantage For Finance

The Top Ten Priorities For The CFO In 2021

Take An Experimental Approach To Discover The Impact Of Tech In Finance

How Technology Enables The Future Of Finance And Accounting

Finance Is On A Change Journey - Here Is How To Take Charge

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of the Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.

All Successful Business Partners Are "Leaders" (the last article in the series about our new capability model)

Should We Keep Talking About Business Partnering? (part of a 17-article series where we deep-dive on the WHY, WHAT, and HOW of business partnering by putting it on a formula)

Your Journey To Successful Business Partnering Explained

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)

The Future Of FP&A: Two Ways To Take The Reins

What Is The Accounting Profession Paradox?

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

Finance Business Partner Is A Bullshit Job

How Business Partners Keep A Plan On Track

Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 9,500 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 57.500+ followers.