Taking up the digital challenge: a windfall for finance departments

A data profession par excellence, a company’s finance department is one of the key battlegrounds for the radical revolution in working methods caused by the digital revolution.

Far from the stereotypes sometimes associated with this function – the unchanging liturgy of the annual budget and quarterly results, the complexity of reporting processes, etc – the use of digital technology enables financial departments to benefit from the wealth of data they collect in a more proactive and flexible way, and throughout the financial year. In so doing, they have the opportunity of showing themselves as even more like the privileged partners they are, as much for senior management as for the businesses themselves, by making a tangible contribution to the efficient piloting of the company.

In a world where uncertainty and volatility are ever increasing, finance departments today face two important challenges. First of all, to enhance “traditional” management controls - which retrospectively reconcile differences on the management accounts - with performance management, global and proactive analysis of activity data, financial ratios and the consumption of scarce resources. Then, to evolve the budgetary process by spending less time on the “statutory” autumn budget - which remains an essential reference point for senior management, the Board and regulators - in order to develop its capacity to revise in a more flexible way its financial forecasts.

Digital technologies now make it possible to advance in two fundamental directions. Firstly, the overhaul of tools and working methods, with a resulting progressive rise in mobility, sharing and collaboration. Then, the arrival of Big Data and predictive analysis which reinforce the capacity of a finance department to assess in a holistic way the company’s activity, and not only through financial indicators. Overall, the digitalisation of the finance department is not a simple technological change, but more a change of paradigm.

The first axis of this revolution consists of benefitting from the availability of data thanks to the use of Big Data and artificial intelligence tools such as Machine Learning. While keeping the mission of producing and certifying reference information, financial departments can multiple their capacity to update forecast scenarios by including, in real time, market evolutions, thereby further proving their role as business partners and strategic advisors to the businesses. In this context, artificial intelligence is no longer science fiction: Societe Generale is currently trialing a machine learning solution to forecast its revenues in the specialised lending sector. The obvious interest for the finance department is to rapidly have at its disposal a new tool to supplement, and especially challenge, forecasts resulting from models or established according to expert judgment.

The second revolution is based on the new opportunities made possible by digital technology to evolve the way we work and the way internal collaboration takes place within financial divisions. At Societe Generale for example, the availability on mobile devices of integrated commercial and financial performance reporting tools makes it possible for staff to share and interconnect in a dynamic way databases whose comparative analysis, not so long ago, would have required several thick bundles of paper!

This means easier sharing of information and, at the same time, faster production of data, resulting in significant time savings and more time available for analysis. It’s a considerable gain in terms of both operational effectiveness and improvements in working conditions for the finance team, whose fundamental mission of analysing the company’s performance will find a valuable lever for improvement.

Taking up the digital challenge is a windfall for any finance department. The strategic role of financial divisions will be considerably reinforced, with them making an increased and renewed contribution to the primary objective of any company: value creation.