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Perspective:
Perspective

The route to… dynamic finance

Many external factors are encouraging CFOs to become more agile. This will result in their finance organisations becoming faster, more responsive, and more streamlined to support these changes effectively. As a finance leader, how can you prepare your organisation for a thriving future in this world of disruptions and rapidly evolving trends? A more dynamic finance organisation is the answer.

Several years ago, Deloitte predicted what financial roles would entail in 2025. Factors such as the Cloud, cognitive computing, and automation would create new opportunities to transform finance and become more dynamic. These trends are continuing to grow, and it is important for finance leaders to understand what these technologies actually offer and how they can impact the organisation of finance. That is all the more crucial now that external macroeconomic trends are gaining ground faster and faster, constantly challenging organisations. A global pandemic, geopolitical turmoil, the increased focus on sustainability and climate, changing employee expectations, supply chain disruption, economic uncertainty, and major social changes... To face up to all these issues, finance organisations must be able to respond faster and adapt constantly. Flexibility is the key to stability. But how exactly can you prepare the organisation to thrive in this ‘new world’?

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Dynamic finance


Data and reporting possibilities will stimulate finance to respond to these issues. They include matters such as inflationary pressures and how to assess purchasing decisions with these pressures in mind, as well as monitoring costs throughout the production process to gain more insight into cost reduction opportunities. Any internal or external disruption should be an opportunity for the finance team to become more agile and flexible. As such, it will play a crucial role in achieving the overall goals of the organisation. The success of finance lies in building a resilient, integrated organisation that can adapt to changes fast. Finance can only thrive in this constantly evolving and dynamic business environment if it becomes dynamic itself! The ability to initiate change increases the likelihood that an organisation will be more competitive, grow, and ultimately win. A dynamic finance team thinks beyond monthly closing and the annual budget process: it is dynamic and agile at all times and capable of responding quickly between these fixed cycles, using tools such as real-time reporting and scenario analyses. What are the characteristics of a dynamic finance organisation?

There is no end in sight to this unclear, ongoing evolution: in fact, the speed of business has changed. A strong, flexible basis—with core technologies, automated processes, structured data models, and talented profiles—is required to give dynamic support to the business and the entire organisation in the face of these evolving factors. Integrating new technologies and continually questioning its own working methods is part of a finance organisation’s DNA.

Be aware of how you treat your staff and their experience. Invest and stimulate your team. developing skills should, as always, be part of your daily organisation. And these skills should include basic, tech-savvy and problem-solving capabilities. Give your team the space and opportunity to grow. Implementing the right finance and reporting tools enables you to automate certain tasks, so that employees can focus on making the right analyses and doing the things that matter within the finance organisation.

Rework processes so that they can be carried out by systems as much as possible. That means scaling up the use of systems other than Excel. For example, you can automate the processing of transactional data that continues day and night to ensure that financial data is available faster and has a better quality.

Meet the organisation’s growing and evolving desire for fast and reliable information. Rethink how you create information today to be fully aligned with the needs of the business. The speed at which information is consumed has changed dramatically and the business has high expectations in this area. Good coordination between business and finance is important here to attune expectations properly. Tools such as Workiva, Fluence Technologies or Board of Power BI [HNJ2]can quickly visualise the most recent figures based on pre-set dashboards and automatic data integration at the touch of a button.

Establish strong data governance for both internal and external use. Make sure the finance organisation is well-versed in how the data is to be structured, created, maintained, secured and consumed, which will enable it to deal with analyses more responsively and flexibly. Ensure your data comes from a single source wherever possible to avoid the need for many reconciliations and employees having to retrieve data from different systems. This saves time and prevents unnecessary errors.

Make sure you have modern, compliant, and constantly updated systems that can transform and change scale to suit the business. Take advantage of systems that are constantly evolving and bringing new opportunities to finance. Consider the needs of the finance organisation and the business when you do so. Your options include extensive solutions such as Tagetik and Board that can offer a total package that ranges from planning, budgeting and forecasting to consolidation or growth and expansion over different time periods by integrating single point solutions with the existing technologies.

Obstacles
 

There are few finance teams that manage to move as fast as they really want to. That is especially true when they are helping their organisations navigate disruptions. Organisations often come up against the following obstacles:

Role-based silos: These arise when one section of finance is not involved with another or does not communicate sufficiently with the business to determine expectations sufficiently. This results in them becoming isolated from the rest of the organisation, and end-to-end process automation is not possible. Make it clear who is responsible for the end-to-end processes within your organisation and set these people the target of automating the processes as far as possible using Cloud-based ERP systems and on-top automation tools.

Mindset and cultural shift: Change is especially difficult for finance because it has always had an essential role as a guardian of stability. However, flexibility is necessary for stability as it enables you to navigate change successfully.

Lack of connection: A lot of work is needed to transform finance. You cannot generate the cohesive power of dynamic finance unless it is integrated throughout the organisation.

Technical debt: Transforming the architecture and systems of finance can be expensive and challenging to implement. Just making a few system changes will not be enough to repair damaged processes and their underlying data challenges.

Incentives not aligned: Transformation needs to be aligned throughout the business and defended by the management of the organisation. Everyone should know what point you are aiming to reach and what the organisational vision is.

Access to capital: Many CFOs rely on traditional ROIs and costs from business cases. However, you should consider valuing intangible assets such as better and faster information. That will allow you to argue in favour of the investment they[HNJ3] require. If employees can spend five days a month less on closing the accounts, this time can be used to make better analyses, thus generating impact within the organisation. This value must also be taken into account when you are considering where to invest.

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