What CFOs Need to Consider When Envisioning the Future of Finance

CFOs must take a forward-looking approach when thinking about data, talent, and technology for the finance function, according to experts from AICPA, Deloitte, and Workday.

Growing sophistication in enterprise-focused technology solutions is poised to transform the future of finance, but exactly what that looks like—and how quickly organizations realize the vast potential of these technologies—remains to be seen.

But progress is certainly taking place.

In a recent webcast titled, “Frictionless Finance: Speeding Up Data to Decision” and hosted by the American Institute of Certified Public Accountants (AICPA), finance professionals from Deloitte and Workday examined leading trends along the path to an increasingly digital future.

“The goal of this webcast is to help finance leaders better understand how digital acceleration is really impacting the finance function, and give them actionable strategies and use cases to capitalize on this acceleration,” said Ash Noah, vice president and managing director, learning, education, & development, AICPA-CIMA.

In an effort to predict how technology would help finance evolve in the 21st century, Deloitte in 2018 published a set of eight trend predictions for what the finance function would look like in the following decade. In 2021, Deloitte updated its predictions with a midterm progress report titled “Finance 2025 revisited.”  

Mike Danitz, principal, finance and enterprise performance at Deloitte Consulting and a co-author of the report, identified three broad trends that have emerged: 

  • An acceleration toward automation, an increase in efficiency, and improved business insights. 

  • Emerging technologies that underpin progress toward future goals. 

  • The need for new human capabilities within finance. 

Danitz predicted that specialized applications, microservices, or an API-based infrastructure would help to grow enterprise resource planning (ERP) for organizations.

“Talent is the topic du jour.” 

Mike Danitz Principal, Finance and Enterprise Performance Deloitte Consulting

“We’ve seen in the market an acceleration, a renaissance, of ERP being a driver of transformation,” Danitz said, adding that the trend is likely to gain momentum within finance organizations. “We see that it will continue to accelerate as we go to 2025.”

Barbara Larson, senior vice president of accounting, tax, and treasury at Workday, said she prefers the term "enterprise management cloud"—a concept that enables continuous innovation. 

“It’s a new way of doing business,” Larson said. “It’s very focused around people, capabilities, and intangibles.”

Larson added that such an approach allows for a broader integration of finance data. “Having that common data platform enables cross-functional collaboration across the organization: really driving those key benefits to cloud, continuous innovation, and an integrated data platform,” she said.

Matt Schwenderman, emerging ERP finance transformation leader at Deloitte Consulting and the global lead of Deloitte’s Workday financials practice, said that “regardless of the system used, the important question is whether the platform is suitable for growth as well as agility. When you think about capabilities and being agile and quick, you need a strong core to do that,” he said.

Schwenderman shared that one high-growth hospitality client, which focused on a flexible, scalable platform by using Workday, has grown significantly over the past two years. “Even going through the pandemic, they’ve been able to triple their footprint, and they attribute that to having a standard, strong core that they’ve been able to iterate on since 2019,” he said.

Schwenderman’s advice for organizations contemplating their own digital future is simple: Do it now.

“The call to action is: You can’t wait anymore,” he said. “So test, learn, iterate, implement. Just keep going.”

Analyzing Data at Scale

Technology’s transformative effects have already been seen in some industries. Danitz used the concept of a factory to illustrate the point: Whereas 50 years ago, a traditional factory scenario would likely include coordinating the movement of people and parts, such scenes are now quite different.

“You go into a factory today, and you see maybe three or four employees that are monitoring a set of machines that are building that product, and they’re looking for errors and issues that may be coming up,” he said. “We see the same thing happening within the finance organization.”

“Traditionally, finance has been good at processing and analyzing data and producing a set of reports or insights that a CFO can use to support the business,” Danitz said. “Really, that’s what machines are good at. They’re good at processing and analyzing large pieces of data and delivering a set of insights that then need to be acted upon.”

The Importance of Standardization

Danitz said the standardization of processes has also increased. “The move to the cloud and onto a platform like Workday does drive a lot of that standardization, so that’s an opportunity for finance executives to think about how to simplify and standardize your processes and, therefore, automate those processes as you scale.”

“With automation becoming more widespread,” Larson said, “the reality of nearly instantaneous quarterly reporting is approaching.”

“At Workday, our vision is to get to this concept of a zero-day close,” she said. “To achieve this, it’s critical to remove inefficiencies in the close process by infusing technologies such as machine learning, as well as enabling insights and handling exceptions that can be delivered continuously throughout the period, so issues can be addressed right away.”

Danitz added that Larson’s vision appears to be on track for the future of finance.

“I think the idea of a continuous close is definitely still the vision for ‘Finance 2025,’” he said. 

Obtaining Good Data

“Quality finance data ranks as one of the largest challenges CFOs and finance departments face,” Danitz said. “Without clean finance data, you can’t build the predictive model to achieve that 90, 95, 99% accuracy without an understanding of and a strong governance around the core data that finance needs,” he added. “So clean finance data is at the heart of driving innovation.”

Danitz said he expects finance to continue focusing on defining those core finance data requirements because that data is used to support external reports.

But it won’t be easy.

“We expect that good data governance will continue to be a challenge,” Danitz said. “The reality is that getting clean data is hard work; it takes a lot of effort to straighten out and get the right platform in place.”

Larson added that giving the finance function a leading role throughout the data governance process is a good best practice.

“We’ve given finance the ownership of the data model, the accounting rules, the mapping, the calculations, the metrics,” she said. “We’re the data czars, which makes a big difference, and doing that lets finance manage and enrich the data so that they can run their own reports, analytics, and planning models without having to pick up the phone and call IT. That has really been a game-changer for us.”

A Real-Life Use Case

As an example of how automation has helped Workday itself manage a complex process, Larson described the company’s stock compensation process, which is administered by E-Trade.

Utilizing its own Workday Prism Analytics, Workday is able to ingest E-Trade data and automatically perform checks that were once part of a manual process. The company produces data in conjunction with Workday Accounting Center to create journal entries while enriching them with additional data attributes such as legal entity cost center accounts.

“So something that used to take our team two and a half days to do is complete in a matter of hours now,” Larson said. “We’re really just starting to scratch the surface with what we can do to automate our processes and at the same time give our users access to immediate information.”

“Having that common data platform enables cross-functional collaboration across the organization.” 

Barbara Larson Senior Vice President of Accounting, Tax, and Treasury Workday

Larson called Workday’s stock-based compensation use case a perfect example of how to enable better decision making. “We can take that stock compensation and marry it with salary and bonus data and give our executives a holistic view of compensation at Workday—and it really helps to inform our strategy and our decision making around compensation,” she said. 

“To date, Workday has developed about 75 use cases for Workday Prism Analytics solutions across the finance function,” Larson added.

Focusing on Future Talent 

When considering the future, organizations must understand the role skilled employees will play now and for years to come.

“Talent is the topic du jour,” Danitz said, adding that the 2021 report predicted that there would be “a premium placed on new, advanced capabilities.”

In practice, that means finance teams will have to grow their skill sets.

Danitz said that includes understanding how to mine a large data set and pull insights out of it to support the organization. “It also takes a set of capabilities around storytelling, which we highlight is really one of the key pieces of a finance professional,” he said. “We only see those expectations increasing over time as we move into 2025.” 

Larson said Workday’s finance team members have a chance to rotate top talent to gain “new cross-functional and influencing skills”—a practice that increased during the pandemic. 

“We weren’t doing much business travel, so we happened to have excess capacity in our expense team and really leveraged gigs as a way to shift resources into some of those higher-demand areas like customer billing,” she said. “And those team members had an opportunity to get exposure to a different function and learn new skills.” 

Danitz acknowledges that the bar for future finance professionals is high. To meet those expectations, CFOs need to consider how to create teams that leverage the strengths of each individual. 

“How you share your finance or accounting organization, as Barbara is describing how you give the right experiences through rotational programs, how you engage with your business partners, and you lean on them to fill some of those gaps as well is all part of how you need to think about shaping and building the finance organization of the future,” he said.

A Transformation Journey

Danitz described working with a large multinational communications organization whose new CFO sought to evolve into a leading class in analytics within 24 months. Yet the effort would require a modernization of its entire finance organization and a consolidation of its ERP platform, which was supported by disparate components.

The organization used the opportunity to make an ERP investment to begin the transformation effort, Danitz said. Understanding that such a substantive shift could take time, it also simultaneously launched a parallel effort: “They created essentially what was a SWAT team, or an innovation team, that sat in their transformation office.”

The team members were tasked with identifying use cases where they could deploy automation and robotic process automation (RPA), blockchain, and natural language generation, among other technologies. “They also looked at how they could reconstruct and redefine their operating model,” as well as what services should be streamlined, Danitz said.

The result is that the organization has matured its ERP platform and is well on its way to complete its transformation by 2025. “They’ve been able to sunset a number of those legacy platforms that they had in place,” he said. “All the while, they’ve driven a ton of innovation within their finance organization by identifying where to deploy the right technology to solve the right use cases and deliver better business insights to the rest of the organization.”

Calls to Action

Closing out the webinar, Danitz emphasized a focus on data. “Finance needs to define the type of use cases and the problems that they’re trying to solve,” he said, adding that the next step is to think about automation and driving efficiency. 

Danitz added that dialogue was crucial. “Communicating and working across your business to talk to your board of directors, your CFO, your CEO on the investment that’s required to drive these types of programs is an important area to get lined up and think about the business case and the value that you’re driving through them,” he said.

Larson called for CFOs to evolve their leadership. “Embrace your inner data czar,” she said. “Our teams are embracing it to get the data they need exactly how they need it.”

Schwenderman added that while technology will address an organization’s data needs, there is also a human component. “Don’t lose sight of the lens that there is a technology gap in most companies between what your finance talent can do at home and their experience with technology at home, and their experience with technology when they come into the office,” he said. “If you’re not going to do technology for your own capabilities, think about doing technology improvements for the experience of your talent and being able to attract the people you need to.”

Interested in learning more on how to become a decision ready organization? Workday's Barbara Larson shares more insights on best practices for finance. Watch now: 

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