Finance Function,”The Times They Are Changing”
The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now will later be last
For the times they are a-changin’
From “The Times They Are A-Changin’ by Bob Dylan, 1964
Recently I came across an interesting quote written by Hugh Collum Executive Vice President and Chief Financial Officer, SmithKline Beecham on his interpretation of on future of Accounts & Finance Professionals, he said:
“Accountants could go the way of coal miners!” A mighty industry that once employed three quarters of a million and helped bring down a government today employs fewer employees than SmithKline Beecham. I believe that accountants in industry could go the same way if they do not realise the fundamental changes they need to make.”
I fully agree to his foresight on the finance function, if it does not come to speed to the dynamic business needs & expectations the finance function may loose its significance.
Further building my thoughts on this, I think of some key areas that I believe will determine the future success of accounting & finance professionals and lay down a strong foundation from here, on which finance function needs to build & reinforce its importance in today’s businesses. It would majorly involve considering these top 5 futuristic areas.
1) Change with the technology: The very first & foremost important area is to match the technological speed & we must always remain open to adapt the fast changing technological advances around us.
Without mentioning any names, I was highly surprised when I found the old age paper payment systems being still followed by a $1bn company even in 2016.
Not to mention the way the Big data is changing the face of business analysis, we need to use this technology to find out right trends to help our business operations & take right decisions at the right time to save our costs & money.
Facing increasing competition, regulatory constraints and customer needs, finance professionals are seeking new ways to leverage technology to gain efficiency. Depending on the industry, companies can use certain aspects of big data to gain a competitive advantage.
Not only CFO’s but their entire team remain constrained on time & with faster deliveries required from their business, they should always keep on looking for technologies which can help them save their valuable time and help making their business operations move faster.
2) Changing face of business partnering : Business partnering today is just the beginning. I believe there is a genuine shortage of those with high finance skills able to handle these changes: the ability to use data, provide insight and deal with the business — expertise that goes far beyond the current kind of technical accounting skill base.
I observe that the business expectations from CFO’s is growing much faster, and they are expected to be objective, proactive and analytical, and think beyond their own function; to be able to forecast, strategise & execute on the bigger picture.
In fact, the aim of the next generation coming into finance will be to harness all the tools at their disposal — data and analytics, in-memory processing and real-time information of all kinds — in order to become indispensable to the business. In the coming years, they will need to get used to regular rotation across different units and be comfortable taking on a variety of different roles in order to reach real positions of influence.
3) Financial discipline: This I believe is one area where if any business wants its finance team to succeed then it would need to help them by strictly ensuring & following all agreed financial systems, processes, procedures laid down by finance function of its business.
For any business to succeed in future, the challenge is set to shift from identifying and accessing shortcuts toward ensuring system controls, processes, procedures & policies. This will require processes and procedures to mature to support business growth.
Businesses may benefit by leveraging more streamlined processes in the organization that will, in turn, reduce their transactional processing times, allowing their finance leaders to spend more time on more in-depth and high-value work.
4) Keep innovating : I clearly see that over the next five years, innovative CFO’s will be in higher demand than to their stagnant counterparts. Innovation is going to play a key role in finance function. With disruptive and uncertain times on the business horizon, this is a clear opportunity to set organizations on track for future progress. For the CFO’s, the challenge will be to support and encourage other parts of the business with the right tools to innovate. CFO’s will be expected to deliver tangible improvement through innovation and transform from service deliverers into providers of real end-to-end business solutions. Innovation will be more easily fostered and encouraged in an enterprise that values an autonomous, light footprint approach — and in those that equip their finance teams with the tools to recognize and systematize innovative practices.
5) Globalisation, World is “one” market now: As trade barriers are reduced and electronic commerce breaks down geographic boundaries, markets are becoming more homogeneous, greater economies of scale are realised, and domestic operators are shifting to become global.
The breathtaking pace of technological progress and international integration has resulted in a truly global village, where countries are much closer because of faster and better modes of communication and stronger trade and financial linkages than could have been imagined 5 years ago.
The world economy moved from a bipolar to a multipolar configuration. There has been considerable progress in elevating living standards in many corners of the world. However, much still needs to be done to improve finance function to allow a better response to business requirements and to reduce uncertainties faced by businesses in foreign geographies.
Finance must support the business as it evolves into a global organisation. Operationally, this may involve coping with different time zones, cultures, languages, and regulations, as well as many more locations. At the strategic level, there will be a greater variety of options for raising funds as the barriers in the financial markets come down. Opportunities for strategic alliances, mergers and acquisitions will increase, as will the threat from predators. Globalisation is not just an issue for large organisations. Even the smallest company will face increasing global competition.
Finance is moving away from being internally focused, manually intensive and standalone to being customer-focused with a commercial understanding of the business, and with the processes and systems in place to support the business partner concept to continue with finance function as an indispensable part of tomorrow’s businesses.