New Mission for Finance Leaders

Over the next 10 years, technology will do more to change the finance and accounting organization than it has over the past 50. A myriad of advances in databases, data processing, analytics and tools addressing the user experience as well as the application of AI will free up much of the time now required by manual, time-consuming processes. These advances will allow the CFO and controller to refocus the mission of the department and will enable it to realize the ambition of finance transformation: becoming a strategic partner to the rest of the company. There are five areas most finance leaders will need to address to realize this critical transformation.

1. Invest in the Right People

Change management is often the most difficult aspect of a major corporate initiative. In this instance, leadership and communication from senior finance leadership are essential to define and explain the changing mission. Ensuring team members are ready for transformation will require ongoing investment in their skills. Moreover, it’s essential to instill a continues improvement mindset, one where “we’ve always done it this way” is no longer an acceptable rationale.

2. Keep Technology Current

Technology is also an important ingredient in finance transformation. The right technology automation can remove unnecessary process complexity. Technology can save time – time the finance department team can use to accomplish more and provide greater value to the rest of the organization.

Artificial Intelligence (AI) using machine learning will become an increasingly important capability of financial management and ERP systems over the next decade. With AI, departments will be able to automate and streamline repetitive tasks that require limited judgment. This time savings will provide team members more time to focus on valuable work that requires judgment and experience.

3. Optimize Processes

Finance department work is often collaborative. So it’s important to instill a continuous improvement mindset and explore ways to improve coordination and hand-offs. Organizations must make a purposeful effort to refine processes whenever necessary.

4. Focus on Data Quality

Poor administration of data is a root cause of heavier-than-necessary staff workloads. As is the case in manufacturing, designing quality into the data management element of business processes pays dividends. Finance organizations that have significant data quality issues on average took almost three days longer to complete their close than those that have little or no problems. A lack of data quality control leads to the need for time-consuming reconciliation and checking for errors, or time spent and costs incurred dealing with the consequences of unchecked errors. Data quality is also an important reason to avoid using spreadsheets in enterprise accounting processes.

5. Demonstrate Value

Finance executives should select an initial project, one that provides strategic value and demonstrates the department’s commitment to be a business enabler. One option to consider is improving the budgeting process by making it easier for the budget owner. People in finance roles naturally think in terms of money, while people in line-of-business roles think in terms of “things” – headcount, units of materials purchased, or marketing leads required to close on sales. A dedicated budgeting application that allows budget owners to plan things and, with the help of software, translates things into money makes budgeting easier.

Technology advances have the potential to turn the longstanding objective to transform the finance department into reality, but only if finance executives address the people, process, and data issues that also prevent departments from enhancing their effectiveness. The right software, however, is the linchpin. It is the catalyst to giving departments the ability to devote more time to high-value work, enabling more flexible and agile operations while providing more strategic guidance to support more informed decision-making.