Is the Finance function ready for the future?

In a constantly evolving business landscape, finance functions find themselves at a crossroads. The relentless pace of business transformation calls for a reimagining of the traditional finance function. Forward-thinking CFOs must think about and understand what a successful, value-adding finance function will look like in the next decade.

What path should finance functions tread in order to secure their place as vital contributors to organisational success, in the next decade?

The finance function will need to become a custodian of performance for the organisation. As business models grow increasingly intricate, a pressing need arises for a "custodian of performance" within the organisation. This role is pivotal in steering performance holistically and impartially, aligning with the organisation's best interests. Beyond the traditional focus on financial metrics, this custodian leverages a broader perspective that encompasses the corporate purpose.

To turn it into the the custodian of performance it needs to become, CFOs have to pay attention to 4 enablers that will support the finance function.

The rise of organisational digitisation is reshaping finance, and will lead to the first enabler which is the finance function of the future being a hybrid function with an ideal mix of employees and technology.

The initial wave of digital adoption aims to streamline operations by standardising, optimising, and automating core finance processes leaving very little manual tasks to be done. This transformation is comprehensive, spanning from end to end. By integrating finance employees and digital capabilities, the finance function can use the digital ecosystem not only to promote efficiency, but also to perform value-adding tasks.

A hybrid should be able to provide initial hypotheses on the appropriate actions to take based on data-driven insights and pinpointing important questions to ask. The combination of employees and digital capabilities will create new roles within the organisation leading to transformative results.

An excellent illustration of how technology can bridge the gap and usher in a new era of hybrid finance functions is the emergence of Skrypt. This innovative platform seamlessly integrates AI and automation to significantly diminish manual workloads, thereby enhancing its ability to strengthen decision-making processes within organisations.

To support the custodian of performance, finance functions will also require a radical shift in their operating model. The optimisation and digitisation of processes give birth to a networked organisation, forming a living system, a constantly evolving organisation that is much like a living system.

Manual tasks are delegated to global business services and shared resources, including automation experts, project managers, and business process owners. Work becomes functionally agnostic, less focused on specific deliverables, and performed more dynamically and iteratively.

The perfect living organism will have data that is pooled and perform cross functionally and cross department support. With a well put together living organism, expert organisation functions are eventually developed (Tax functions, HR functions etc)

The Finance function then becomes a business partner that that supports the business leaders and other leaders (from the corporate level to local affiliates) by not only providing an appropriate answer, but also asking the right questions.

The networked organisation will empower finance functions to extend their responsibilities into areas that were traditionally managed by other support functions and take on responsibilities beyond core topics. This expansion enhances the finance function's capacity to holistically steer performance and drive optimal outcomes. This may also include taking the responsibility of leading the adoption of new technologies in the organisation, such as blockchain and crypto currencies. Finance functions should be able to take the lead in managing their companies’ adoption of cryptocurrencies in new business models as well as in transactions along the value chain.

In this evolving landscape, careers and collaboration in finance must become more diverse. Every finance professional will need to cultivate distinct expertise, whether in a specific business domain, a specialised finance topic, or knowledge at the intersection of business, finance, and IT. Finance professionals will serve as connectors between technical analysts and results-driven business leaders, facilitating communication and translating technical jargon.

The evolution of finance functions is not an option but a necessity, ensuring their enduring relevance and value in the changing world of business.

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