The Changing Dynamics of the Finance Function

Are you ready for the battle ahead?

“The future finance professional is as much a strategist as an accountant.”

Overview

We live in an era of transformation, an era which is widely referred as the ‘Third Industrial Revolution’ fuelled by the giant and out of the blue technological developments viz. artificial intelligence and machine learning, data analytics, robotics, blockchain, and cloud computing. Undoubtedly, the dramatic advancement in science and tech has forced businesses to reinvent themselves, right from redesigning the age-old processes to reimagining the product and service offering, to rethinking the go-to-market strategies to re-engineering the business and revenue models. Every organizational function – be it sales & marketing, finance, HR or operations, is today facing a tempestuous heat; an unprecedented challenge to revamp itself, stay current and relevant, while timely delivering on the ever-increasing expectations.

Finance, which is often rhetorically labeled as ‘bean counter’, is all set to be completely disrupted by the changing business and industrial landscape, volatile economic environment, as well as immense thrust on adding value and achieving business objectives. This is really going to be intriguing as time spent in transactional activities would reduce substantially and finance professionals would find themselves doing more interpretative analysis, delivering consequential inputs on strategic business decisions. Take it with a pinch of salt, finance, hitherto, has focused mostly on ensuring robust finance control, risk management and, adherence to regulatory norms and internally adopted policies with less time to collaborate with business and pro-actively drive financial performance.

Certainly, the transition ahead seem to be a daunting task, especially with everyday pressure from ‘business as usual’, the good news is that most finance leaders have well-thought-out plans and tracks to embrace technology, drive process automation, identify new ways of orchestrating better performance, offering more insights and rewarding communication, fostering resilience and delivering a more connected and cohesive finance offering. One must, however, remember that digitization is not something which can be achieved overnight, but only through a strategic program of transformation enabled with the right mix of technology, people, and processes.

Building the Next-Gen Finance Function

“The best way to predict the future is to create it.” – Peter Drucker

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Finance, today, operate in an increasingly uncertain world often confronted with factors beyond its control such as currency fluctuations, geopolitical environment, and stringent regulatory requirements, yet it needs to keep an eagle eye and deliver consistently in sync with broader organizational goals.

The journey of creating an optimal finance team begins with an assessment of the present – “Where do we stand today?” followed by each executive answering the right set of questions.

  • What they do and why they do it?
  • Who is the ultimate beneficiary?
  • How long does it take to get it delivered?
  • How frequently is it being done?
  • Is it finance’s baby or someone else should do it?
  • Is it really needed?
  • How can it be improved?

Learn, Unlearn and Relearn

While businesses are increasingly getting complex and expectations has risen exponentially, managing operations seamlessly have become a hard row to hoe. It is imperative for finance folks to attain new skills and competencies or to get subsided by the winds of change.

Talent Management

Executives should be assigned to role based on their individual competencies and areas of interest. Folks who have demonstrated empathy with business can be placed in business partnering role whilst those who are fascinated by compliance and controls may be more suited for operations. Job rotations and regular cross-functional training can help build a stronger pipeline for future.

Leverage Automation – Harmony between Man and Machine

Evaluate current processes, identify the inefficiencies and repetitive tasks which can be standardized and fully automated, embed financial controls into systems so that there is enough bandwidth to focus and have a real-time grip on key metrics.

Adopt a flexible recruitment strategy

One cannot overemphasize the importance of having the right people on the right job at the right time who can deliver with the highest level of accuracy within prescribed turnaround times. Finance may need to explore onboarding resources with diverse skills and experience.

Stability

Having a committed finance team is critical to sail through the ever-changing nuances of the business and execute the strategic plan on the ground. High attrition not only increases costs and delays but also poses a major threat of throwing the change management off the track.

Barriers to Change

Change will not come if we wait for some other person or some other time. We are the ones we’ve been waiting for. We are the change that we seek.” – Barack Obama

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Change is never easy and convenient. Complacency is not an option either. The transition from bean counter of yesterday to knowledge manager of tomorrow is achievable only with overcoming barriers and addressing bottlenecks such as –

  • Challenges in finding and retaining the right caliber,
  • Inefficient business processes,
  • Budgetary constraints,
  • Employee resistance to change,
  • Outdated IT systems,
  • Lack of time to train employees,
  • Lack of senior management blessings,
  • Restricted access to management information.

Conclusion

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The future is right here, knocking at the door and has presented massive challenges as well as opportunities. The challenge is to move forward beyond the often quoted clichés of business partnering and value addition, lift and shift processes & systems and evolve into an agile data-driven decision center that can cater to the business with prognostic insights helping them navigate the unpredictable market environment.

“In God we trust; everyone else must bring data on the table.” – William Edwards Deming

Today, there is an immense opportunity for finance to move out of the number crunching corner and play a pivotal role as a strategist as well as a catalyst in board-level strategic planning and decision-making. This, however, can happen only if the routine activities are automated and executives remain focused on collaborating with business, breaking silos and nurture them to make informed commercial decisions.

Not too far is the time, when financial book closure would be a thing of the past, and dashboards & real-time reporting would be the order of the day.

Would you like having a discussion on future of finance, let’s catch up and have a ‘chai pe charcha’ 🙂

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