Part 1 - How Clear is your Vision for the role of Finance in the new Digital era?
by Evelyne Legaux on 15-07-2021
If your business is to remain a market leader or influencer & better prepare for the future, you likely have a compelling need to speed up & broaden the scope of digital technology adoption. The shift for Finance however appears to be a lot deeper than just upgrading to the next generation technologies.
In actual facts, this legitimate & genuine question is emerging: is the digital age driving the transformation of the role of Finance as a function within the business? Or rather, is it that new requirements of doing business & changing market conditions create the need for Finance to play a radically different role going forward?
But How is the Role of Finance really expected to Transform?
Up until now, Finance – its Accounting component in particular - has primarily been looking backward through the month end close & reporting process and the provision of analytical insights into the business past performance & its underlying drivers.
Over recent years though, the idea that Finance at large should act as a business partner has become prevalent, a change that requires a radical shift in the way Finance looks at the business.
Looking forward instead is now becoming the new norm, not only through the usual planning, budgeting & forecasting activities, but by providing leadership executives with deeper & wider insights into where the business should be going!
Likewise, a significant amount of manual work has usually been inherent to the financial reporting process to make up for the lack of flexibility & agility attributed to historical accounting systems.
However, this too is now expected to change with the growing need for real-time reporting & analysis.
And What does it Take for such Transformation to Happen?
First, this is where the key role of technology comes into the picture!
If Finance as a function is to play a more strategic role to guide the business towards better decision-making, then the systems in use must provide the right data and it must do so with quality, flexibility & real-time.
Efficiency & accuracy in processing high volumes of data have also become essential and drive the growing need for process automation & digitisation.
And as Finance changes from being primarily reactive & transactional to becoming an increasingly proactive, analytical & agile function within the business organisation, so do talent requirements with a much bigger emphasis on data-based analysis skills, mastering digital tools, customer service mindset & business acumen.
So, to answer our earlier question, it makes sense to say that the disruption caused by digital technologies creates the perfect opportunity for the Finance function to re-invent itself in a way that matches the evolving requirements of being a successful business in today’s world!
With the automation of repetitive tasks & removal of manual efforts, the digital era will free up human resources & create the space for employees to add rewarding business value through the provision of insights & services.
Definitely exciting times ahead for the Finance function at large!
In Part 2, we will zoom into the world of Order to Cash more specifically. Stay tuned!
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