There are ten trends that Gartner said recently that CFOs must understand to become successful in the future.
Digital is creating a skills disconnect
As organisations continue a path toward digital transformation, finance talent management strategies must evolve more quickly, according to the advisory firm.
CFOs need to revise competency models to address the digital shifts impacting their business, which will inform how they recruit, develop, retain and provide career growth for staff, the firm added.
“A lack of digital savviness in finance will impact an organization’s ability to make good decisions,” said Craig Wilton, senior director, Advisory. “Finance staff must understand how digital technologies interact with the corporate ecosystem and also how to articulate bias and risk in machine learning.”
Demand for decision-ready data
Companies often handle data in a rigid way that doesn’t help the business make a decision, said Gartner, adding that finance leaders must make trade-offs in governance standards to make their data more useful in decision-making.
This requires a pragmatic mindset where governance principles can be loosened, where data can reside with its owner, and where highly governed data is presented alongside more intuitive sources, Gartner advised.
“Finance must optimise data for decision-readiness rather than accuracy and precision,” Wilton noted.
(Re)centralisation of finance analytics
Finance leaders must determine which types of analysis belong in either an analytics centre of excellence or in a business unit and develop a scalable partnership model to facilitate this, the research company said.
Finance leaders should ask which business partner decisions most need finance’s deep analytical support and understand the unique issues of each business line, Gartner suggested.
Then they should develop a partnership structure that optimises analytical scale without undermining the partner relationship, the firm added.
The AI revolution has begun
In the coming decade, AI will optimise or transform nearly every activity in finance, said Wilton.
Finance leaders should educate themselves on how the function may change, prepare their team with new skill sets, and explore the investments needed to deploy AI, he noted.
According to him, key questions that CFOs need to answer include:
- How can I build a data infrastructure that can support AI?
- How do I develop or acquire the necessary skills? and
- Where are the low hanging fruit for me to deploy AI?
An emerging fourth era for ERP
Enterprise resource planning (ERP) has entered its fourth era and for finance leaders and this means being ready for standard global processes across its organisation with real-time data and intelligent platforms, Gartner observed.
Finance organisations will need to respond faster than ever before to continuous cloud-updated ERP and treat it as an organisational rather than an IT asset, the advisory firm said.
Finance leaders, therefore, need to think about how their team will operate in a real-time planning, budgeting and closing environment, the firm noted.
They must consider what new platform capabilities such as AI, machine learning and blockchain will mean for finance organizations, and how it can leverage these to improve actionable data insights, it added.
Growing use of global business services
Shared services as a concept has moved far beyond finance transaction processing and now includes value-added services in finance and beyond, said Gartner. The focus has shifted away from just cost reduction toward value delivery, the firm added.
“Automation is reducing the need to chase labor arbitrage across the globe,” said Wilton. “Finance leaders should think about how shared services can maximize value-added services, and how they will develop the necessary skills to do that.”
Reporting goes on-demand
Reporting expectations have evolved and this will increase pressure on the finance team to deliver real-time reporting, according to Gartner.
In addition, stakeholders will demand real-time access to finance data and advanced analytics, Gartner observed.
Finance leaders must understand how to make this a reality by answering the following questions:
- What technologies will enable finance organisations to deliver on-demand reporting?
- How should data be governed as reporting expands to integrate financial and non-financial data?
- What skills will finance leaders need to deliver on-demand reporting?
RPA is putting internal controls at risk
The efficiency and potential of RPA are already spurring widespread adoption in finance, Gartner said.
“It’s important that finance leaders do not allow themselves to be blinded by the many benefits,” Wilton advised. “In some cases, RPA robots have been used without the knowledge of internal control teams, causing unknown reporting risks.”
Finance teams must balance governance of RPA and other digital technologies with efficiency, Gartner said, adding that they must think about how they can track RPA use cases for their impact on controls and think about what are the right internal controls for RPA.
Cost scope is harming efficient growth
Corporate cost growth has outpaced revenue growth by 1.8 times since 2014, according to Gartner.
“CFOs need to know how their costs compare to peers, identify how to adapt their cost structure to outperform peers and drive change across the organization to pursue targeted growth bets while eliminating value-destroying projects,” said Wilton.
Unlocking growth through supplier innovation
As organisations become increasingly reliant on their suppliers for key capabilities and continue to work with even more suppliers in varied capacities, they will need to leverage key relationships to strategic and competitive advantage, as well as to contain risk, Gartner pointed out.
“Encouraging procurement teams to have a mindset of innovation when dealing with suppliers can lead to important new growth opportunities.,” Wilton advised. “It’s also important to understand whether suppliers prioritise you over other organisations.”