For finance chiefs, a more compelling vision is required for the future of finance and reporting.
According to Ernst & Young, the reporting environment continues to evolve at pace, leading to the rapid transformation of the finance function and its operating model.
Digital technologies, as an example, can transform how finance works, with accounting knowledge to be integrated into artificial intelligence (AI), and controls and compliance monitoring to be automated. Alerts can be triggered when risk metrics trend toward unacceptable tolerance levels.
When external factors change at an unprecedented scale and pace, and in unexpected ways, incremental changes to how finance works and operates may not suffice. A compelling vision for the future can be required, that can help finance teams to be proactive rather than reactive and master the disruption.
EY enumerates priorities finance leaders can build on:
Data-driven decision-making and reporting
Organisations can face significant data challenges when meeting fast-changing reporting requirements.
To address challenges, companies will likely require seamless information and insight flows where finance functions are able to gather, clean and analyse data as an asset. And subsequently, they could extract insights using analytics and tools, such as AI, and then build the connectivity so that insight and data flows to stakeholders in real time, with intuitive visualisation and self-service tools.
However, only a minority of CFOs and finance leaders currently believe they have the end-to-end capability to meet reporting and disclosure requirements.
Disrupting the talent and skills mix
While core finance skills may continue to provide the foundations of the function, finance leaders must be able to identify roles and skills areas that may be required for the future.
Reports show there is a requirement for operating officers with experience in shared services, outsourcing and managed services, as well as a requirement for “futurists,” including digital strategists.
Futurists are defined as professionals who can present scenarios of the future based on how digital technologies will develop and affect organizations and the economy.
Finance teams may also struggle to drive value from data analytics technologies if legacy, back-office mindsets continue to dominate how people think and behave.
Driving value from data analytics will likely require a willingness to experiment and collaborate, as well as a culture that strikes a balance between risk awareness and granting the freedom and permission for finance teams to innovate and experiment with data analytics.
The ongoing skills strategy should also tackle how people keep their skills refreshed and relevant, which can be particularly important given how fast demands can change.
A more fluid operating model
CFOs and finance leaders could find it difficult to meet changing reporting demands and other expectations if their function’s operating model is too complex and fragmented, or slow to react.
Addressing significant issues may require greater operational agility, including a more fluid operating structure that extends beyond the walls of the enterprise to tap into an industry-leading ecosystem of third parties and provide the next generation of finance services.
This could provide a more dynamic and agile approach, and is likely to be a focus for many CFOs and finance leaders, both at a general operating effectiveness level and for ESG management and reporting in particular.
