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The Impact of Digital Transformation on the Finance Team

Aoife Donnelly, Managing Director, Leading Accenture’s Finance Strategy and Consulting practice in Ireland, and Andrew Kelly, Senior Manager in Accenture’s Finance and Consulting Practice, explain how the finance function is undergoing a radical transformation as market disruptions, digital technologies and increased expectations converge. And, how virtually every role within the finance function will be redefined in the next five years.

The finance function is undergoing a radical transformation as market disruptions, digital technologies and increased expectations converge. Virtually every role within the finance function will be redefined in the next five years. The speed at which manual tasks are automated will continue to accelerate, reports will be generated more rapidly and the time that finance professionals spend on data entry will reduce significantly. 

This is a consistent theme from finance executive research that Accenture has conducted over the past several  years and is  re-emphasised in our most recent  report - CFO Now: Breakthrough Speed for Breakthrough Value. Both this and our report Finance reimagined: Igniting the Spark show that the finance function will focus more on planning, analysing and decision making, turning finance professionals into value stewards who systematically identify, quantify, and measure benefits that are aligned to their company’s strategy.

What’s Changing?

As technology and new attitudes towards flexible work continue to disrupt  organisations, the role of the finance function is increasingly being redefined, with one certainty: change. CFO’s are investing in automation, intelligent technologies like artificial intelligence (AI) and analytics to change the fundamental role of the finance function and their workforce. Where once the remit of finance was predominantly that of a reporting function that focused on historical analysis and preparing financial statements, finance is progressively becoming a data-driven decision-making centre to support the growth agenda.

The pace of automation is faster than most CFOs anticipated. According to CFO Now: Breakthrough Speed for Breakthrough Value, in 2018 CFOs expected that 45% of traditional finance tasks would be automated by 2021. In 2020 that number jumped to 60%. 

 

 

 

 

 

 

 

 

 

Source: CFO Now Breakthrough Speed for Breakthrough Value, Accenture 2021

With minimal time spent on manually processing transactions and reports, the finance function has more capacity to form critical alliances within the organisation and to collaboratively analyse data to make more informed decisions and track their effectiveness.

The ability to extract existing data, often from antiquated legacy systems, and the explosion of new data sources, has the potential to transform both the finance function and the business as a whole. The ability to drill into this data and leverage greater insights is bringing greater agility and efficiency to how organisations respond to both challenges and opportunities. We are finding many CFOs are turning to cloud-based solutions to maximise the impact from this growing data availability. Cloud based AI models using real time data, cloud based process-mining solutions and cloud based enterprise resource planning tools (ERP) combined to enable the visualisation of end-to-end value chains and business processes, uncovering the friction and root causes that can result in errors, deviations and value leakage.

There is broad agreement among finance leaders that the combination of increased data availability with enhanced analytical capability, often using AI augmented by data savvy finance professionals, is going to be crucial to achieving the organisation’s strategic priorities and supporting growth ambitions.

But where does this leave people who work in finance functions?

Impact on People

By collaborating across the organisation to provide new depths of predictive insights and identify new sources of value across customers, channels and products, finance professionals can unlock the commercial and competitive benefits of digital transformation.

Some examples of this value include:

  • through the careful monitoring of working capital, finance can deleverage the balance sheet to free up cash for investment elsewhere;
  • to fuel organic growth, finance professionals can provide investment analysis and advice; and
  • critical market analysis plays an integral role in mergers and acquisition activity.

Working with stakeholders across the business, finance professionals are called upon to be value stewards who systematically identify, quantify, and measure benefits that are aligned to their company’s strategy. When deciding on what actions to undertake, the value steward’s disciplined analysis focuses on answering a number of key questions, including: “How does this align with our strategy?”, “What value will be generated?” and “How will we know if we are being successful?” This is not a one-off analysis either. The value case is measured throughout the lifecycle of each initiative to track the it’s success, decide if it continues to be worthwhile, and if it supports any appropriate action.

Value stewards also partner with stakeholders across the business to form and test business hypotheses using data, which is critical to making confident decisions and directing the business.

Source:  Accenture, June 2021

 How do people adapt their skillsets?

Future finance leaders must not only retain and expand their responsibilities as value stewards, including bringing predictive insights to bear on the finance function. They should also, by virtue of their unique cross divisional/functional vantage point, use this opportunity to become the primary architects of enterprise-wide business value and the catalysts of digital strategies that create competitive advantage by linking diverse functional/divisional ambitions with the organisation’s strategic intentions.

Becoming value stewards requires a broad understanding of the benefits - and more importantly, the limitations of many discrete but interconnected activities such as data modelling, data visualisation, prescriptive and predictive analytics and digital finance risk management. In addition, finance leaders need to understand the cost/benefits of a myriad of evolving digital technologies. No one can specialise in all these areas. Instead, it makes more sense, early on, to gain broad exposure before specialising in a few inter-related areas.   

But it’s not all about technical skills. For instance, Accenture research found that 81% of CFOs believed that data storytelling is essential for today’s finance professionals in helping them advise the business. Negotiation skills will also be critical in helping to gain consensus on proposed projects or courses of action. Conversely, when the merits of a course of action are unclear, finance professionals should possess the conviction to mercilessly challenge its value.

Combining technical knowledge with soft skills dramatically increases the ability of the finance professional to support decision making that drives meaningful action.

It is no wonder, therefore, that more than three-quarters (78%) of junior finance practitioners say that there has never been a more exciting time to be a finance professional.

Despite this excitement, finance professionals need to realise that the skills required for the modern finance professional are rapidly evolving and they have to adapt quickly. So here are a few questions to ponder:

  • Are you trying new ideas, new techniques, and new technologies to improve your output and the output of your finance function?
  • Have you taken practical steps to develop new skillsets?
  • Are you plugged in to what’s happening around you? And that includes what’s happening inside your company as well as your industry as a whole?
  • Are you a node connected to a network of plugged-in people?

The finance function is rapidly changing for the better. It is essential to integrate continuous learning into our everyday lives and to invest in new technologies to accelerate executive alignment to unlock value. While the finance professionals of today navigate a rapidly changing landscape, they will be rewarded with a more meaningful career.

About Aoife and Andrew:

Aoife Donnelly is a Managing Director leading Accenture’s Finance Strategy and Consulting practice in Ireland. Throughout her career, she has helped CFOs digitally transform their Finance functions, working with Consumer Goods & Services and Retail clients on topics such as Finance Strategy and transformation, strategic cost reduction, performance management and global business services. She is passionate about sharing Accenture’s views on the digital future of finance with clients and is excited that technology is finally catching up with Accenture’s vision. Before coming to Accenture, she trained and qualified as a Chartered Accountant and Tax Adviser.

 

Andrew Kelly is an experienced Senior Manager in Accenture’s Finance and Consulting Practice in Ireland adept at delivering complex consulting engagements that focus on the most ambiguous challenges facing C-suite executives. Past projects include creating and implementing financial strategies, Finance target operating models and global business service strategies for government, Global Fortune 500 and SMEs. He has worked across a diverse range of industries with a focus on Consumer Goods, Industrial and Retail.

 

This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors.

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Did you miss our recent webinar “The Impact of Digital Transformation on the Finance Team”?

Watch it on demand, and hear the Accenture Leadership team’s overview of how Finance is changing, and what that means for management accountants. 

Watch it here