5 key issues facing finance today
Transformation is accelerating in every part of the enterprise. But the pressure is on for the finance department as the source of decision making on key strategic investments.
But finance faces its own challenges – both in terms of supporting enterprise priorities and optimizing its own work. With pressure coming from every side, determining the correct areas of focus can be difficult.
A recent report by The Hackett Group, has highlighted multiple issues and areas of priority for finance leaders in the coming year. We believe the following 5 areas represent the most important issues to address – both in terms of unlocking value for the organization, and in improving finance’s ability to provide key strategic advice and partnership to other departments.
1. Taking the position of a strategic adviser
Hackett highlights the increasing role of finance in setting the company’s strategic course has been growing thanks to the COVID crisis. The need for realistic scenario planning has seen finance professionals working more and more closely with business leaders to offer insight that informs some of the difficult choices we’ve all had to make in the past year – from the allocation of resources to the execution of plans.
Finance is playing an increasingly pivotal role in this kind of high-level decision making – particularly in areas of investment like digital transformation and comparing the relative value, risk, and return profiles of different projects. The need for strategic advice from finance is only set to grow as the pandemic forces organizations to fast track digitization and the adoption of new technologies and capabilities.
2. Improving financial agility
Fast-paced change is making predicting the financial needs of tomorrow increasingly difficult. It requires organizations to be capable of rapidly reassessing their priorities, redistributing funds and resources, and even making strategic pivots on a month-to-month basis.
This shift towards constant and rapid change means finance departments are under pressure to shift from traditional forecasting approaches. And to adopt more flexible rolling forecasts and scenario plans that create the flexibility and agility necessary to realign the priorities of the entire organization to meet a variety of possible futures.
The expectation is that this trend will drive greater integration of finance with the rest of the enterprise through digital operations platforms, which will enable the finance team to manage new capabilities like analytics, smart forecasting, and company-wide risk management.
3. Modernizing finance software platforms
Digitization is the order of the day – and in many cases that means replacing the brittle and outdated legacy systems that stand in the way of flexibility and integration. The need for improved capabilities like up to the minute data analytics has already seen a projected increase of cloud ERP adoption (up 25%.)
The unique capabilities of cloud - from virtually unlimited storage and compute power that allow for advanced analytics and AI-based process automation to improved security and scalability – present a huge advantage to finance leaders. Enabling integration between different source systems and making a “single source of truth” possible across the whole enterprise for more effective and agile decision making.
4. Unifying financial strategies with skill and talent strategies to support business needs
Until recently, talent wasn’t a key priority for the typical CFO. But with the rapid advancement of data science and its role in corporate governance, new skillsets (from cyber security experts to data analysts) has forced a reassessment of the importance of reskilling and upskilling to underpin transformation efforts both in finance and the wider organization.
This new focus on talent management will require finance to make key strategic alliances with human resources – combining knowledge bases and data to come up with strong long-term strategies to attract necessary talent and keep skills current.
“Gartner® research shows that five digital competencies are key, and applicable to back-, middle- and front-office finance work. They are technological literacy, digital translation, digital learning and development, digital bias management, and digital ambition”.
5. Leveraging new financial technologies
According to Gartner, “RPA and workflow automation remain key [as a digitalization initiative]. Process automation has brought speed, efficiency, and cost optimization to finance. Given these benefits the use of robotic process automation (RPA), the de facto automation choice for finance teams, has grown exponentially”.
The Hackett Group attribute the successful transformation of the finance function to the broader implementation of RPA, AI, and cognitive tools.
We believe that the future for organizations will depend on introducing automation to complex processes that then gives finance the space, time, and ability to identify new ways of innovating and creating value. This will help secure the team’s position as trusted advisors to the business with the ability to help the organization identify opportunities for increasing revenues, save money, and deploy finances strategically to ensure continued growth.
How can Unit4 help you tackle these trends?
Unit4 creates enterprise technology designed to create new ways of working for your teams. Our FP&A solution uses powerful AI-driven automation to help finance teams create powerful and flexible scenario plans, rolling forecasts, and budgets that help your organization account for a variety of possible futures.
The Hackett Group are a leading analyst and research group who performed The CFO Agenda, Complimentary research, December 2020 and subsequently, Nilly Essaides, Tom Willman and Jim O’Connor (all from the Hackett Group) created “2021 CFO Agenda: 10 Key Issues Finance Needs to Act on Now”.
Smarter With Gartner, “Top Priorities for Finance Leaders in 2021”, January 13, 2021, https://www.gartner.com/smarterwithgartner/top-priorities-for-finance-leaders-in-2021/
GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.