Designing a Finance function to meet new demands
Finance is changing. CFOs are under constant pressure to provide strategic insights to their organizations to help make better decisions. How can Finance teams adapt to deliver on rising expectations? We explore how trends and innovations will shape the future in our Finance 2020 report.
What does the future hold for the Finance function?
We've been giving this a lot of thought lately. We wanted to better understand how analytics, the cloud, mobile, business process management, emerging talent issues and a host of other forces might reshape the traditional finance function in the next few years. How will these forces affect operational, business and specialized finance? What will the impact be on the Finance organization and its information, systems, processes and controls?
It's no secret that CFOs are under immense pressure to provide strategic insights that help their organizations make better decisions. How do they and their teams need to change in order to deliver on these rising expectations?
Rise of the finance factory
Day-to-day transactional finance—from payables, receivables and invoices to treasury transfers, journals, capital expenditures and the close cycle—are managed centrally in shared services centres or “finance factories.” The finance factory handles core finance processes, and connects to finance centres of excellence and outsourcing partners in a hub-and-spoke model.
There’s no paper, anywhere. Employees use cloud-based apps on mobile devices to transact their business, and highly standardized, simplified, workflow-enabled business processes handle the rest. Automated controls and intelligent process monitoring and analytics keep watch over core, extended and outsourced process performance, exceptions and service levels to help minimize rework. Finance managers receive event-driven, real-time updates thanks to new integration tools and advances in in-memory processing.
The close process is continuous, if not yet real-time. A daily soft close is the new norm, made possible by visual close management tools, integrated sub-ledgers, daily time capture, journal workflows, reconciliation tools, as well as automation of consolidation, foreign exchange, allocation and intercompany transfers. Finance teams now simulate pre-close results and can support the continuous development of the MD&A throughout the close process.
Organization and people
Wanted: Business-savvy finance staff
Shared services facilities or “factories” are the standard means of managing transactional and operational finance matters. Cost is no longer the chief consideration in locating these shared services—access to talent and capabilities is far more important. In many cases, firms have repatriated services from overseas centres to bring them “home” and closer to the business.
Finance’s talent needs have changed significantly as new roles have become increasingly important. Business process consultants with a deep understanding of workflows, throughput and transactions oversee the operations of shared services finance factories. Business analysts align themselves with business units to provide financial insight at the point of need. And highly specialized technical experts—in areas such as tax, strategy, M&A, investor relations and internal controls—operate out of centres of excellence to serve the needs of the business overall.
With talent so scarce, firms make large investments in training and development. Technical skills are a must, but soft skills have become equally if not more important. Finance staff now focus on sharpening their business acumen and building strong consulting, negotiation and influencing skills, as well as transforming data-driven insights into actionable advice and recommendations.
Job rotations become the norm, as firms look to develop a new generation of Finance leaders from within—leaders whose extensive experience inside the business can help align Finance ever more effectively with the business strategy.
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