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Internal Audit Co-sourcing

Our eight predictions about digital technology for CFOs

For many years, Deloitte has successfully supported a large international pharmaceutical company with internal audit support as part of a co-sourcing arrangement. Deloitte works closely with our Client’s Internal Audit department, whereby we organize regular sharing sessions to align around methodologies, good practices, trends, audit planning and improvement areas. Our partnership is based on trust and continuous dialogue.

Our Internal Audit support covers the full EMEA region, whereby the Copenhagen office acts as the first point of contact to support different types of internal audits such as compliance audits, financial audits, operational audits and IT / security audits. We provide flexibility in our operating model whereby Deloitte - on the one hand - could lead audits from start to finish or – on the other hand – could provide hands-on support of professionals who work under the Client’s guidance and supervision. Key activities include:

  • Allocation of the right resources (skills-wise and language-wise) across the full region
  • Involvement of Subject Matter Experts in different risk areas (e.g. automation, regulations, compliance, cybersecurity, sustainability, etc.)
  • Project-based Data Analytics support using different types of technologies (e.g. audit analytics, risk analysis & sensing, process mining)
  • Methodology and Quality Assurance support, if needed.

We have established a core team of professionals who are dedicated to support our Client and who relate to the Client’s Methodology and ‘Ways of Working’. This core team could either support the Client with audits or train our ‘local’ internal audit teams across EMEA. In addition, where beneficial, our Client could have access to Deloitte tools, such as Data Analytics solutions and Deloitte’s Internal Audit software, in order to make the Internal Audit process even more effective and efficient from planning to reporting.

This agile and flexible setup allows our Client to a) scale up and down, b) have the right capabilities (SMEs, for example, in the area of specific regulations, operations or technologies such as control automation, blockchain, cybersecurity or sustainability, etc.), c) have access to well-skilled local resources who know the local language and d) have insight into country-specific practices to gain insights into trends and developments.

Eight predictions for finance in 2025

The methodology for generating our predictions is straightforward. We look carefully at what finance leaders are doing and at the technology that’s available, and then we ask these questions: What would be possible if we combined different technologies to reimagine the future? How would the work of finance get done and who would do it? How could finance contribute even more to the success of the company?

In the years ahead, cloud-based ERP, automation, and cognitive innovation will continue apace, creating opportunities to radically simplify processes and free up people. Adding blockchain to the mix will only accelerate this trend. As this transition picks up speed, the capacity of humans to add value will be unleashed.

Some find it interesting to speculate about finance disappearing under the crush of digital disruption, but we don’t see that happening. Yes, finance will likely be leaner, but that will mostly be a function of headcount in operational finance (order-to-cash, procure-to-pay, transactional accounting, etc.). Meanwhile, expectations for support from business finance (business partnering, reporting, planning, budgeting, forecasting, etc.) and specialized finance (tax, treasury, IR, etc.) will continue to grow.

Whether finance continues to direct the resources currently under its control will be dependent on its ability to add value. That will require quality insights and exceptional customer service. Some finance organizations will evolve into full-fledged business service centers.

Companies know that sharing knowledge across disciplines is a good thing, even if it creates headaches. Learn what it takes to make the most of blurring boundaries.

When both actuals and forecasts can be produced instantly on demand, traditional cycles become less relevant. The old distinction between operational and analytical data begins to disappear. Finance organizations will still need to meet external demands for cyclical information, but outside investors may also want more frequent performance information. Leading organizations will be operating with a new mantra: There is no close. You’re not forecasting once a month or quarterly. It’s all happening in real-time.

Many finance cycles today are driven by technology and data-processing limitations. Things happen on a regular schedule because that’s the only way they can happen. When information becomes instantly available to those who need it, traditional cycles become unnecessary. That frees people up to focus on discovering new insights and acting on them.

There are plenty of business people who don’t need hand-holding when it comes to basic finance. If they could get their questions answered by a digital voice on their smart phones, they’d be happy to do so. Activities ranging from budget queries to report production and more will be automated. Over time, smart agents will learn what kinds of business information an individual needs, and deliver that information proactively. As that future unfolds, data in spreadsheets will be replaced by visually rich information that is intuitively accessible and easy-to-use.

With growing expectations for responsiveness and quality from finance, getting self-service right is paramount. When your customers are having to take care of themselves, the last thing finance needs is for them to be frustrated or unhappy.

Companies will assess the benefits of automation against onshore and offshore operations. Automation provides a new lever for managing costs, one that gives finance organizations the opportunity to reevaluate how they’re organized, where work gets done, and what kinds of processes no longer require human intervention. Finance-as-a-service will gain traction beyond mid-market companies.

Companies may see significant disruption in the offshoring and outsourcing space, with individual suppliers and their capabilities looking quite different than they do today. At the same time, the need to build dynamic, cross-functional teams will strain finance organizations that aren’t preparing now for what’s ahead. As with all changes, good leaders will be essential for navigating these transitions.

ERP vendors are already building digital technologies like automation, blockchain, and cognitive tools into their products, but that won’t forestall competition. Look for the landscape to shift as new players enter the ERP space with specialized applications and microservices that sit on top of—and integrate with—ERP platforms. Cloud-based ERP will help ensure that you’re constantly updated on the latest release.

Finance is entering a golden age of technology. As cloud becomes the norm for ERP, finance applications and microservices will proliferate. You’ll be able to drastically reduce the complexity and cost of technology, without sacrificing functionality.

Few companies are doing the hard work needed to align and integrate data—which means they won’t capture the full value of digital transformation. Those hoping for a silver bullet to solve their data problems will be disappointed. Automation and cognitive will make it easier to get the work done, but it’s still going to be hard and tedious. What are we talking about? Commas, abbreviations, data-entry fields, nomenclature, and hundreds of similar factors. It’s not glamorous, and it’s not glitzy. But it is important.

Data problems hide beneath the surface for many CFOs, some of whom don’t fully appreciate the heavy lifting required to fulfill their requests. That’s partly because the problems involve technical issues, and partly because there’s little motivation for people to elevate the problems to the corner office. No one wants to be the bearer of bad tidings.

Finance talent models are evolving quickly, with a premium placed on data scientists, business analysts, and storytellers. This represents a dramatic shift for many finance organizations. To get ready, make sure your new hires represent the future you’re striving for. Important qualities include a strong customer service orientation, flexibility, and good collaboration skills—in addition to the technical capabilities needed for specific jobs. Also, all of your people should be able to contribute to elevating the value of finance in terms of communication, impact, and influence. Make every new hire count.

Implementing new technologies is relatively easy compared to changing your talent model. They’re obviously connected, but cultural and organizational shifts related to your workforce may take much more time and care to get right. Your finance organization should be looking at every new hire through the 2025 lens.

Don’t stop there! There’s more to explore:

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When Sumerian merchants first recorded livestock sales on clay tablets, finance technology was born. Five thousand years later, technology has evolved into a new class of digital tools reshaping every aspect of the business. No matter what future you see for your finance organization, one thing is clear: That future is now. If you’re going to compete in the digital world, your organization needs to forecast and manage more effectively and become more efficient.

The key? FinVENTA, an integrated technology platform that leverages a modern digital finance architecture and disruptive technologies to showcase the art of the possible across operational, business and specialized finance for deeper, more accurate insights that speed time to outcome.

Learn more about FinVENTA.

Want to learn more about topics related to finance in a digital world? Explore “Blockchain for Finance,” “The CFOs guide to cognitive technology,” and more at our Crunch time site. Whatever your interest, one thing is clear: From cloud computing and robotics to analytics, cognitive technologies, and blockchain, a new class of digital disruptors is transforming how the work of finance gets done.

Need help developing a digital finance strategy and taking the next step on your journey towards a better, faster, and less expensive finance organization? 

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