Digitalizing finance functions has become a major challenge for organizations of all kinds.
An eagerly anticipated publication for the finance function, the PricewaterhouseCoopers (PwC) report on the priorities for financial directors confirms in its 2020 edition a trend that has been observed for the past several years: the declining position of process optimization in priority ranking.
On the podium in 2018, the topic slid down one step in 2019 and again in 2020, now trailing in the three-year outlook. This change does not imply that CFOs are standing around doing nothing, but it is an undeniable sign that a new transformation phase is beginning for them. With rationalization efforts accomplished, the future now belongs to digital consolidation for accounting and finance to derive maximum benefits on a daily basis.
Data at the heart of CFOs’ preoccupations
Financial directors now have their sights set on data. The volume is increasing along with value, and CFOs need to reconfigure their organization to leverage data’s potential.
Digital technologies are changing the finance function profession, now increasingly less focused on posting accounting entries and producing dashboards, and more focused on analysis. According to PwC, people in the most advanced finance departments are already spending 75% of their time analyzing data.
Beyond the analytics and data visualization solutions required by this new need, technology investment concentrates accordingly on a dual objective: making data more reliable and eliminating as many tasks as possible with low added value. Document digitalization and process automation have emerged as the tools of choice to address those points.
The new role of finance departments supporting business
Why is it important to analyze data? According to the PwC survey, the top priority for financial directors, year after year, is still to manage performance. By leveraging the data they gather, and their capacity to extract useful information from that data, CFOs reinforce their position and role for supporting business. As neutral, stable, and rigorous guarantors of information, CFOs centralize and sort data, derive meaning, and position data in its proper context.
In a complex and constantly changing environment, the finance function emerges as a precious partner, a beacon that shines light on business decisions and even provides them with a decisive boost. For example, PwC states that in one out of every four companies surveyed, the financial director has taken on a leadership role in digital transformation.
CFOs, generating talent
With digital technologies and the resulting evolution of the CFO’s role, finance departments must revisit many facets of their operations, including strategy, organization, offerings, relations with “internal” clients, and more. Of course, that gives CFOs an additional challenge: what about skills?
Trailing in the PwC priority rankings in 2018 and 2019, talent management has now reached third place among priorities for the financial directors participating in the survey. In addition to mastering new digital tools, financial directors must now also develop their teams’ skills as data analysts, with expertise that is in phase with a more support- and collaboration-oriented position and service approach. With that in mind, choosing intuitive solutions that provide a pleasant and compelling user experience is a factor that is certain to help with change.
What does digital transformation really mean for finance departments in 2020?