Data and how it’s managed will define the leaders from the laggards in the coming years. And for finance, it’s already clear that the structure of teams will be flatter, with around 60% of today’s finance jobs no longer existing in 10 years’ time. Technologies such as robotic process automation and machine learning are replacing much of the transactional work. But those jobs will be exchanged for new, more value-adding jobs. Roles in financial planning and analysis (FP&A) will increase, as these roles become much more operationally forward-looking.
Today, finance leaders spend 19% more time on value-added activities than a typical finance organisation did a decade ago, according to McKinsey’s research Finance 2030: four imperatives for the next decade.
Across multinationals, finance structures in many hi-tech organisations are already operating along these lines, boosting efficiencies and productivity. Most other finance teams in other sectors have not yet reached these heady heights, but they are transforming towards this goal, experts say.
Many leading companies have substantially increased efficiency in transactional functions by around 39%, including areas such as accounts payable, accounts receivable, according to McKinsey’s research. But the research found fewer efficiency improvements in the more strategic areas of finance, such as FP&A, optimising capital structures, tax planning, controllership, internal audit and financial-risk management, meaning there is still lots of room to improve.
“Historically, you’d get a new set of tools every 10 years or so. That’s not happening anymore. Now, overnight new features can be turned on when you have cloud-based tools. More specifically, things can be tested in a cloud environment and then rolled out very quickly,” says Oliver Deacon, executive coach at Oliver Deacon Coaching and former finance director at Microsoft.
These new tools add another benefit to multinationals looking to connect their finance teams more efficiently because they have more common features. This means that when an organisation makes a change to one company in a geographical sector, it’ll be easier for another company in a different jurisdiction to roll out those changes.
Greater collaboration in real time with geographically dispersed teams will be another significant benefit to multinational finance teams as a result of adopting cloud technologies.
“I’ve worked in PowerPoint where 30 to 35 people have simultaneously been making edits in the same single document. Everybody can see what everybody else is doing, so the format is much clearer. The ability to collaborate all at the same time in a single place revolutionises how finance does things,” Deacon says.
Other collaborative cloud-based tools that can boost productivity and could be a gamechanger for finance teams is a shared notebook such as OneNote, Google Docs or Evernote.
“We would have a whole finance organisation working out of the same OneNote notebook. We could organise, collate information and people could see what was going on. The worldwide sales finance team [at Microsoft] worked out of a single OneNote notebook for month end close,” Deacon says.
In this way, he says, different geographies could share analysis done on a specific product and everybody “moves forward at a faster rate”.
Data lakes or warehouses, where data is stored in one central place, will become standard in the future. They will improve compliance as well as insights allowing finance teams to use the single source of truth much more effectively when comparing different regions and territories in real time.
These new innovative technologies will be useless, however, without high-quality data and an upskilled finance workforce. Finance functions will require a well-defined management strategy on data collection, storage, and interrogation to perform the types of analytics businesses need.
“Having tech in place to streamline processes and increase efficiency is great, but without the right data governance it is rendered useless. Businesses working across different jurisdictions are often affected by siloed data channels that restrict them from harnessing data to its full potential. Tech to analyse data effectively does exist, but it is only as good as the data set – if it’s not all in one place and easy to access, the ability to draw accurate insights from it is limited,” says Joseph George, Managing Director at data consultants Dufrain.
Despite all the new tools and reams of data, connecting multinational finance teams cannot be achieved without the right people. Aligned processes, digital collaboration and an eye for efficiency improvement are crucial. As are visualisation tools. But without context, interpretation and forward analysis, true finance transformation will falter.
Rightly, organisations are ramping up training and development. Technologies need to prove their worth by showing impact and influence, but so too do finance professionals. Today, and in the future, the ability to show personal effectiveness, impact and influence will also make the difference.
Future of the finance function
Transformation within the finance function has been accelerated over the past couple of years. How is the role of the finance function changing? What technology is facilitating that change? And what skills are most in demand?
Hear a panel of guests dissect the latest headlines and provide expert analysis on the top stories from across the world of business, finance and accountancy.Find out more
Stay up to date
You can receive email update from ICAEW insights either daily, weekly or monthly, subscribe to whichever works for you.Sign up
News in brief
Read ICAEW's daily summary of accountancy news from across the mainstream media and broader financing sector.See more