Today’s business environment is volatile, disruptive, changing and complex… and you could pick many other similar adjectives to describe the direction of the global business environment. This gives rise to a number of different challenges and opportunities for Finance and the only definite, is that those finance functions that do not keep transforming will severely impact the ability of their business to grow and prosper.
The role of the finance function has always been as a steward, with a focus on good governance, professional judgement and giving an independent view of the health of the business to enable the right decisions to be made. This does not change in today’s environment, but how the finance function delivers these core aims and where the effort needs to be focused, has shifted enormously with the flexibility of the global/virtual organisation and agile technology.
The Progressive Finance function needs to be able to do the basics right and efficiently all of the time, striking the balance between cost, quality, control and speed of delivery. This will free up the finance function to drive the strategic growth agenda and contribute insights, adding value to the business.
The good news is that there are now a number of solutions to drive better ways of working through deploying technology and structuring the organisation in the right way. However, with choice comes complexity and if the processes, data and people are not robust and aligned, then the best and most innovative technology and organisation structures will only highlight and at worse, exacerbate the deficiencies.
The size, maturity and capability of the business will help determine the right model for the finance function but these are intrinsically woven together with people, process and data. This means that robust and structured processes, data and people, facilitated by the right technology and organisation, is a prerequisite for the Progressive Finance function.
Technology is a great enabler and automation is a key way to mistake-proof processes, improve efficiency, embed controls and enable a flexible organisation through communication, workflow, analytics and shared knowledge. By automating and transferring knowledge to technology, the focus of people, can be on analysis, providing insights, innovation and driving discreet projects, adding benefit to the business. Today more and more processes are capable of being automated and this will increase exponentially over the next few years, with the rise of Robotic Process Automation (RPA), artificial intelligence and niche user-defined finance tools, which give an agile and flexible solution but with strong audit trails and ability to handle large amounts of data. As this rise in the use of automation expands, the finance function will need to adapt to managing and adapting these assets and ensuring security of the data and information that they are handling. So, when thinking about the savings that these tools will bring, finance leaders will need to think about the total cost of ownership and what processes and skills are required in the Progressive Finance function.
Processes are the recipe for all tasks in the supply chain; they underpin automated solutions and act as the roadmap for manual processes; enabling both people and technology to function in the required way. It is therefore imperative that processes are robust and fit for purpose prior to
deploying new technology or developing a virtual/global organisation structure. When redesigning or improving processes, the focus should be on the quality of the output to the end recipient, with this in turn driving lower cost and productivity through reduced re-work and removal of bottlenecks. By focusing on process in this way, you will design a robust process that will underpin the technology enablers and the organisation structure.
Over the last few years the rush for analytics and Big Data has exploded, driven by technology’s capability to manage ever increasing and complex data sets. We have seen the rise of the Data Officer and how the ownership and control of data should be managed. Traditionally, Finance has been the custodian of data, however now that data analytics is becoming holistic, the Progressive Finance function should be determining how they would like to engage. Should they remain the owners of data, should they be a data client or should there be shared ownership across the business? This should be driven by the type of business, its’ maturity and size and is connected to how the finance function organises itself within the business. Regardless of the ownership of data, it is crucial that finance functions and businesses embrace the technology capability to model and deliver insights and continue the process of defining, organising, governing and securing data. If processes are the recipe, data provides the ingredients and as everyone knows, you can only make a good meal with quality ingredients.
The way that employees engage with their company and leaders has changed and will continue to change, with people defining career success in many different ways. Tenure at a company and loyalty to it are rarely motivators. Alongside this, the needs of the finance function have changed -gone are the days of the traditional bean counter. Finance require skills from a broad range of backgrounds from many different disciplines, as diverse technology to anthropology. Whatever the underlying skill set, each of these will need to have core skills sets of leadership, strategic and analytical thinking, communication, interpersonal skills and obviously core finance and accounting skills. The challenge is to ensure that the people employed or engaged are continually kept aligned with the needs of the finance function and their customers. With all of these dynamics in play working out what is important to the finance function and its’ ability to deliver, means putting a focus on how best to engage the right skills at the right time and will determine the right organisation structure.
Like technology, the choice of organisation structure and the way that the finance function procures the skills it requires, has never been greater. Again, this brings complexity but also great opportunities to reduce cost, increase efficiency and deliver high value insights to clients. Technology enables virtual working practices, global centres of excellence and need-driven sourcing. Process brings the governance to easily delegate delivery while maintaining responsibility; data gives the business insight and people bring the breadth of skills required. This means that the finance function can take advantage of global talent and is no longer constrained by where the business or external customer resides. This goes beyond the captive shared service centres and BPO arrangements we see today, but allows a much more agile and adaptive way of setting up the organisation, with lower set up costs and flexibility to react to client requirements.
In summary, the Progressive Finance function needs to be able to do the basics right and efficiently all of the time and focus on driving the strategic growth agenda. This means constantly looking at
ways to evolve and do so in a pragmatic way but keeps a clear stewardship over its core functions, utilising and refining its:
- Technology – that is agile and secure;
- Data – that is defined, governed, available and secure;
- Processes – that are robust, efficient and mistake proof;
- People – that bring the right skills and flexibility;
- Organisation – that draws on the right talent and fits to your needs.
As mentioned at the beginning of this article, the world is too complex and fast moving for large scale transformation projects, so the key is to set out a vision and break this down into focused, short, discreet projects that deliver immediate benefits, while building the capability and overall structure of the Progressive Finance function.