The final three trends are really important, aren’t they, particularly for the evolution of finance?
You might say these are trends that have been around for some time, but I think they’ve taken on a new meaning over the course of the last few years and will into the future.
Number six on the trends list is enterprise resource planning (ERP). What we’ll see is finance applications and microservices are going to be challenging big and monolithic ERP. Instead of solely focusing on transaction recordings, ERPs will be focused on analytics and insights to support their evolution. New-age applications will support finance to enable faster decision-making through real analytics.
The next area to focus on is data. Finance will be required to deliver more accurate data, and quicker than ever before. Data governance is going to be an important thing here, and really, no one does enough of it. Organizations should do the hard work of getting all of their data houses in order so that data can be shared across teams to drive value, especially as those data sets are going exponential.
The last trend I think is going to be the most important: how businesses deal with their workforce and workplace. Employees are going to be doing new things in new ways, and retraining the employee to have a customer service mindset is key. More focus is going to be placed on growing talent who can tell the story versus crunch the numbers. Finance is going to have to adapt, or they’re going to risk missing out. All of this needs to be done in a model that is more geographically flexible to accommodate remote workers.
Digitalization is clearly at the core of these changes, but how is it impacting traditional problem areas, such as operational finance, which has historically taken the bulk of resources?
At the root of all these trends are digital forces. Business processes are being executed as a combination of human interaction with technology, and access to varied skills and talent is broad and strengthening. The key for finance is to become more agile and use data as the currency to produce valuable insights.
Transformative technology is what enables these forces, and it’s driving finance to achieve some of the significant opportunities across the finance spectrum. For operational finance, this is supporting three opportunities—the first one being touchless transaction processing.
As an estimate, 90% of transaction processing is going to become automated, and routine tasks such as data searching and validations entering will be performed by finance bots or digital activity.
The second area is the availability of real-time data. The labor-intensive and time-consuming close as we know it right now will cease to exist, and instead, accurate financial information will be available to leaders and managers 24/7.
The third one is the opportunity for centralization. As all of this happens, resources are going to be moving to physical and virtual command centers or finance factories, as we talked about earlier. And the need for operational skills will decline while the need for strategic and technology skills will continue to rise.
Does that level of automation and increased efficiency then lead to a more strategic finance function and better collaboration with key stakeholders?
I think you’ll see that, yes. On the business finance side, there are huge opportunities surrounding the quality of analysis. The key words here are predictive, insightful, and integrated.
Predictive means that focus is going to shift from reporting on the past to predicting the future, and finance will proactively identify opportunities to improve performance and engage with businesses to address them.
When we say insightful, we refer to the fact that automation and self-service reporting are going to free up capacity for insights generation. And finance will expand its use of visualization, as well as narrative, to help the business user better understand and make sense of financial data.
And when we say integrated, we’re talking about the greater linkages between finance and operational planning and analysis. And self-service functionality will be enabling greater access to data for business users.
Finally, specialized finance will have opportunities to increase efficiencies and add capability. It will be more efficient through automation, and that will improve the accuracy and speed of repetitive tasks, such as routine tax reporting, as well as through ecosystem-wide blockchain adoption, which is going to reduce processing time and costs and may even eliminate entire processes. Specialized finance will be more strategic through a shift in focus from transactional tasks to high-value areas such as tax strategy, treasury, and risk scenario planning, including more predictive analysis. And it’ll ultimately be fortified by new capabilities such as automated controls and predictive hedging strategies that will improve the ability to respond to events and better protect company assets.
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