Finance Transformation Trends – Takeaways from the Future of Finance – CFO Summit, London

Why this topic is important to me?

Conferences such as Future of Finance – CFO Summit (FoF) are a place to network with like minded finance practitioners, software vendors and start-ups as well as with frequently interesting keynote speakers. The presentations, talks and podium discussions give me an opportunity to reflect about developments, common themes and challenges faced by the Finance teams throughout Europe. What I like most are one-on-one conversations during conference breaks or over a beer in the evening where we have a chance to discuss what has really worked and what not.

At the time of the writing of this piece (February 2019), the European economic outlook is worsening due to Brexit and political uncertainties and increasing trade wars and shifts in economic power balances e.g. with China.

 These uncertainties impact growth forecasts of many companies. The business needs more help than ever from Finance and asks Finance Business Partners for advice in modelling scenarios e.g. related to sales and earnings forecasts for various Brexit scenarios. With economic growth attached with a big question mark, budgets for Finance are again under tight scrutiny. In a word, Finance needs to do more with less. Against this backdrop, Finance Transformation is becoming more important than in the past years. So for me the mission for FoF2019 was to find out if Finance Transformation and CFO 4.0 programs are well under way and what companies are doing specifically to get their individual mix for their CFO 4.0 vision implemented. One of the participants of the conference, Lawrence Lynch, Finance Director GBS at Takeda, shared a summary of his take-ways in the form of a House of Finance on the conference app. Lawrence, let me take up the idea of the House of Finance – I sorted the many impulses into the following categories of my House of Finance Transformation:

Let’s go to London, The Hurlingham Club:

Topics of FoF2019

Finance Strategy and Finance Transformation/CFO 4.0 Vision & Vision and Roadmap:

FoF2019 showed that Finance Transformation is on the agenda of a significant number of companies. Reasons for Finance Transformation include the need to align and optimize the Finance Function but also the desire to become a more efficient and value adding team. The opportunities provided by technological innovation create an added benefit which companies add to their Finance Transformation mix.

 Representatives of Burberry (Ian Brimicombe), Shell (George Connell) as well as Ultra Electrics (Will James) shared insights into their Finance Transformation Roadmaps. While the approaches differed, I sensed that having a clear assessment of current state and areas for improvement was the basis for a clear view on the target state of where Finance should be in the future. Clear design principles, evaluations of target operating model options were cornerstones of a Finance Transformation strategy which resulted in a roadmap, action plan and phased implementation approach. Investing in a strategic phase to plan out the future of finance seems to have been a common building block of a successful Finance Transformation for those who shared their insights.

 Other common denominators which were discussed were process-orientation. Moving from functional silos to an customer-centric end-to-end process view is a design principle of good practice organizations. We discussed ERP standardization in various anecdotes ranging from epic on-premise ERP harmonization activities to the usage of cloud ERP products for smaller or start-up companies.

 Finally, excellent Finance organizations view “data is the new oil” (quote attributed to Clive Humby). In a round table discussion with Victor Jager we discussed that frequently obstacles due to low data governance and data stewardship need to be overcome. However getting a grip on a broad definition of data and assuming responsibility for collection, maintenance, analysis and insight generation will become one key strategic task in the new and expanded role of future Finance organizations.  

Not discussed, but yet critical as a starting point for Finance excellence is to get the basics right. Let me point you to another post on this topic. High-flying ambitions should be grounded in a solid foundation of frequently simple changes which make a difference in the way Finance operations.

 Finance Organization, Roles and Operating Model

Interestingly, not technology was the hot topic but rather topics dealing with organization and seizing the opportunities of expanding roles were at the forefront of the discussion Key among those themes was business partnering.

 In an interesting panel on the “Future of Business Partnering”, Ashley Humphrey from AON chaired a discussion with Camila Thorsager Kastrup from Itsu Groceries, Caroline Ackroyd, CFO of Push Doctor, a start up in the medical service space, and Denise Padayachy, FD IT at multinational Unilever. As Andrew Codd from #SITN podcast (Strength in the Numbers Podcast) mentioned, the term, originally coined by Stanley Haring at Shell has been around for a long time. According to Denise Padayachy, being a business partner in Finance is the “sexy job” to be in as it puts you in front of the business. Imporant is a holistic, rather than a specialist stance if you want to succeed int he role. Caroline Ackroyd from Push Doctor mentioned that Pish doctor created Spotify-like Finance tribes. While we did not get a chance to discuss this further, applying agile principles to both projects and Finance organizations was a recurring theme. Yet becoming a business partner is a journey which requires business and finance experience, tenacity in moving from a classical budget to a business mindset says Denise Padayachy from Unilever.

 A common theme in this vertical of the House of Finance Transformation was the evolution of Finance Shared Services. Many global players are looking back at a longer evolution of moving transactional as well as increasingly also more insight-driven tasks to Global Business Services. George Connell from Shell pointed out that his GBS function has also assumed full ownership of “data”.

 People, Culture and Ethics

Another strong focus of the conference were people, culture and ethics as well as associated change management topics.

 In a session about “Addressing and Narrowing the Skills Gap Within Finance”Ali Barker, the EMEA Finance Training and Development Director for Johnson & Johnson gave some very practical pointers, how Finance can actively address and manage the skills and ways of working changes needed to enable Finance team members to provide the services required in the future. At Johnson & Johnson, important shifts in Finance include:

  1. Data will gain significant importance for Finance
  2. Robots are here, they are no longer a threat
  3. Analytics and future decision making is gaining importance
  4. Technologies must be embraced (AI, Analytics, …)

 As a consequence, new skills need to be learned. Apart from being familiar with technology possibilities, the list of skills includes soft skills such as story-telling and overall presentation skills to become more impactful whilst working with business managers as their “co-pilot”. CFOs can support the education of future CFO 4.0 team members by sending Finance staff on job rotations to other parts of the business. Johnson & Johnson is even exploring “externships” where staff are being exchanged for a fixed period with other companies. Ali also made a strong case that Finance professionals need to recapture their ability to provide value-adding analysis by creating time and space for “deep work”, something our current corporate ways of working frequently does not allow in any sufficient level.

 Will Johnson, Group Finance Director at Napp Pharmaceutical made a strong case that Finance Business Partners have a crucial role in navigating together with their business counterparts. In a well presentation richly illustrated with quotes and interesting research, Will made a strong case to for Finance professionals to upskill their communication skills for impact and recommended to use emotions in our arguments and stories.

 In addition, social responsibility, focus on supportive, non-toxic work-environments and the positive impact on team and enterprise performance were interesting topics discussed at the conference.

 Wrap up:

In this post, I will not cover technology. The vast line-up of topics above shows that there is plenty of work out there for Finance teams which want to evolve further. One participant stated “better never stops”. This mindset provides a perfect mantra which encapsulates the quest to become better every day with – or in some cases – in spite of technology.

FoF2019 was an excellent event for finding out, what “drives” Finance and Finance Transformation today. In addition, it was an excellent opportunity to network and catch up with likeminded Finance professionals.

This article was written by Johannes Vogel, an experienced finance professional and management consultant with more than 20 years of experience in running finance operations and working with clients to define their finance teams’ strategies and processes.

We want to hear from you, comment below:

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.