In part two of this blog series, we explore the current readiness of finance teams for the future, what skillsets will be important, and how finance leaders can find and develop the talent they will need.
Many CFOs don’t feel their finance teams are ready for the future and have major talent gaps. In “The DNA of the CFO 2016” study, 47 percent of CFOs say their current finance function doesn’t have the right mix of capabilities to meet the demands of future strategic priorities.
Charles Phillips, managing director at Deloitte Consulting LLP, says finding talent to support digital finance can be challenging. “Talent models for digital finance are tilting toward data science and business partnering, but many finance organizations don’t have the right people with the right skills in place to make the shift,” he says.
The finance function of the future will need a balance of both technical and business skills.
A report titled “Building a Team to Capitalize on the Promise of Big Data” from the Institute of Management Accountants and Robert Half reported significant shortages of accounting and finance professionals who possess the technical and nontechnical skills for data analytics initiatives. Specifically, these skills included: identifying key data trends, data mining and extraction, operational analysis, technological acumen, and statistical modeling and data analysis.
Other challenges stand in the way of finance progressing into a more strategic role. Despite advances in technology, many teams still use legacy financial management systems that drain resources and time, and don’t provide easy access to data or the depth of insights needed to keep pace with business change.
Company culture also plays a role in organizations becoming more data-driven. Beyond finance teams, management across the business must be open to change and willing to incorporate data and analytics into decision making. Finance will play an important role in helping managers understand the value of data and learning how to use it.
The finance function of the future will need a balance of both technical and business skills. “Finance talent today demands a solid knowledge of technology and data science, as well as a deep understanding of the business itself,” says Phillips.
Communication skills will be critical, especially the ability to interpret data and translate what it means to the business.
Being able to analyze and interpret data in the context of the business is critical. “Finance professionals will need both data science skills and an understanding of industry trends, cost and revenue drivers, and the ability to develop action plans and understand financial impacts,” says Naved Qureshi, associate partner in the Finance, Risk, and Fraud Center of Competence at IBM Global Business Services.
Finance professionals will also need to understand modern technologies and have the know-how to use them. In the “The DNA of the CFO 2016” study, 55 percent of respondents said that “improving digital technology skills in areas such as mobility, the cloud, and SaaS” would be a significant people and skills priority for the future finance function.
Soft skills will also be essential to partnering with leaders across the business and helping to create a data-driven culture. “Finance professionals will serve as trusted advisors to the business. They will need to build confidence by being accurate, timely, and relevant, and have the collaboration skills to work across a wide variety of teams with diverse functional backgrounds,” says Qureshi.
Communication skills will be critical, especially the ability to interpret data and translate what it means to the business. “Using their knowledge of the business, staff must also be able to turn the information they mine into actionable guidance. The ability to communicate findings and make recommendations is a requisite for success with data-related initiatives,” according to the “Building a Team to Capitalize on the Promise of Big Data” report.
Finding the right talent and mix of skill sets is becoming a higher priority for CFOs. In “The DNA of the CFO 2016” study, 22 percent of CFOs cited “meeting the need for new skills by transforming how finance talent is recruited, retained, and developed” as their number one strategic priority for the finance function of the future.
Shamus Rae, head of artificial intelligence at KPMG, describes how his clients are planning for the future. “Our clients are starting to think ‘What does the organization look like in five to ten years’ time if technology lands in the way we think it does. And, who do we need?’ There is an issue with where finance professionals come from in the future, as the whole training model changes,” he says.
Finding and developing these skills may prove difficult for many organizations. According to “The DNA of the CFO 2016” study, a talent shortage has hit the developed world, and competition is tough for the best data analytics and digital talent. This sentiment was echoed in “Building a Team to Capitalize on the Promise of Big Data,” which stated that “Finding accounting and finance professionals with business analytics skills is difficult.”
So how should CFOs prepare for future talent? One way to start is by identifying specific roles that will be needed on the team, and what skillsets would be best aligned to each role. The “The DNA of the CFO 2016” study described what this might look like.
Organizations can develop these skills from within the current finance team, but it may require more than traditional training approaches.
“Finance leaders must look keenly at the skills profile, as well as ongoing training and education (including exposure to new technologies), career development, and performance measurement and rewards for each finance role on the team,” says the report. “For example, the leader of a finance factory will need to have skills and experience in driving process excellence through lean techniques and state-of-the-art technologies. This is a very different profile from that of an economist in the forecasting center of excellence, whose skills and experience may be in analyzing and modeling changes to the business model, such as the introduction of new digital services and products.”
Data scientists may also play a critical role on finance teams, helping to interpret and analyze data. The “The DNA of the CFO 2016” study suggests what skills finance leaders should look for: “Look beyond traditional financial analysis skills. Data gurus—such as statisticians and data scientists, and even behavioral scientists—will be critical in helping the finance function of the future turn data into fresh perspectives and strategic insight.”
Organizations can also look to develop these skills from within the current finance team, but it may require more than traditional training approaches. “Most finance leaders cannot simply place their teams back in math class to ramp up their skills in data analytics,” says Greg Acevedo, business development manager for Workday Financial Management at Alight Solutions. “While formal training is an option, finance organizations can also prioritize group projects, brainstorming and collaboration sessions, and job rotations all while encouraging feedback throughout in an effort to find and develop important skills.”
Qureshi also highlighted the importance of giving employees experiences in other parts of the business. “Start with targeted high-potential recruitment and put these employees and selected others into rotational programs with other functions and business units. This builds links of business, finance, and cross functional acumen and teaming skills,” he says.
Organizations should also consider demographic changes in the workforce and how that could impact the way they recruit and retain talent. By 2025, millennials will comprise 75 percent of the workforce. This generation has different values and needs, and desire new experiences and opportunities to learn—the traditional finance career path may no longer be enough.
Success of the future finance function will come from having both the right technology and the right talent and skillsets. Now is the time to explore if your finance team is ready and what will be needed to support the future needs of the business.
For an in-depth look at the most important skills and capabilities required of the CFO of the future, read our feature story.