Last month I had the pleasure of attending the AAT’s Future Finance conference, where I discussed “Emerging Stronger: The new Finance Function” with Jannine Edgar, Director of Finance and Operations and I delivered my keynote talk on “Accelerating digital and automation in finance teams”.
As a follow up to this insightful debate, I wanted to highlight the key takeaways from this debate and zero in on what to do first, so you can act fast and not be bamboozled by the hype and new terminology.
When you are under pressure to fix a problem, improve a process, or be seen to be taking action, there is a risk that you start looking for things to buy before really understanding the problem you want to fix.
As the many big-budget adverts will tell you, buying a software app will be, “like having a robot do the accounting tasks you hate.” and will play on your stressors by asking whether you are, “Looking forward to another year-end? We didn’t think so.”. It’s no wonder these tools are being bought globally and doing so well, but there is much more to accelerating automation than just the tools we use.
Before we look at the real priority for finance teams, let’s look at the megatrends and understand what this new world actually looks like.
Industry 4.0, or the fourth industrial revolution, is the further adoption of computers and automation (Industry 3.0) but enhanced with self-learning and autonomous systems enabled by data and machine learning.
This is being made possible by cloud computing, the connection of many consumer products to the cloud allowing data exchange without human involvement (Internet of Things; IoT), and many software and hardware developments using this technology and big data to make decisions for humans.
This is important to us as this trend will become more and more mainstream as the capability matures, and will help us to automate our own businesses, processes and traditional roles.
The workforce is changing rapidly, as well as the technology that underpins it. Generation Z are the youngest part of our population, but account for 25% and are entering the workforce today. They expect online hyperconnectivity using smart devices and well-designed apps, and can not remember a time without great technology and software at their fingertips.
This is important to us as Generation Z is not only our employees but our customers, who will demand a digital transformation that matches their personal expectations. And these trends have been seen in recent years, with younger generations driving up technology adoption in older generations (read more here), and there is no reason to think this will not continue and happen in the workplace.
The makeup of our population on a global and local level will also impact our businesses and careers, as we see a shift in the birth rate, migration, income, family life cycle and the impact of global events, like the COVID19 pandemic.
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Digital Finance Function
Trying to relate these megatrends to our own world can be difficult, and all attempts to do so are imperfect, but there are some areas that are gaining momentum.
Digital skills enabling Classic Finance
As the world becomes more digitised (the physical world shifts towards software apps and its related data), we will need more digital skills to work with these apps and data. Digital skills in an accounting and finance function relate to anything that makes you more “tech-savvy”, from knowledge that makes you more data literate to skills that help you use the tools available to you.
It can also mean management skills and behaviour too. Understanding how to maximise the value of data, how data should be visualised, how to capture innovation ideas that will need digital solutions, how to run a data project, a data team, work with IT vendors and partners, even how an apps user interface should be designed for functionality and use.
To many people, the above is a huge challenge, to others (think Generation Z) this is normal.
Data Teams that support Classic Finance
The shift required towards digital is not an easy one to manage, and adding this task to existing workloads has been met with mixed responses. At best, a rush of excitement (until month-end kicks in again) at worst, concern and anxiety of the future of roles and jobs.
Consequently, small digital finance functions are being born to focus on this change. These teams can start as a project with an external vendor, ie: to bring in a new planning tool. These teams can also start using an internal resource that has the expertise to support your goals, ie: data analytics of your product profitability.
As the value of each project is realised, these teams can grow into other data sets, ie: whole business analytics, and other capabilities, such as process automation (using workflow bots) and intelligent automation (using AI to make process decisions).
The bringing together of these two worlds; the classic finance function and digital finance function will lead to the shift in our profession that has been well documented by all accountancy bodies and technology researchers.
Authored by Christopher Argent, Founder of Generation CFO.
The finance professional’s community to network, work smarter and drive digital change. We provide insightful, platform-agnostic commentary and resources to help finance teams transform their businesses through the use of technology. Join to learn from your peers, validate decisions and achieve digital transformation. Founded by Christopher Argent in 2009 he wanted to help CFOs and the finance function modernise with digital tools and a digital mindset. With his 25 years as CFO and BI, EPM and Analytics Programmes, he is on a mission to make finance transformation common practice.