Is the future of finance new technology or new people?
Preparing for the future finance function
In part 1 of this series, Do you define your CFO role? Or does it define you? The disruption of the CFO’s DNA, we showed how the CFO’s role is being reshaped by four major forces:
- Risk and uncertainty
- Stakeholders scrutiny and regulation
For CFOs to meet these challenges, they must not only re-evaluate their own competencies, but also equip their function with the right tools, and surround themselves with the right team.
In part 2 of this series, we explore the finance tools and team of the future, as we answer the question: Is the future of finance new technology or new people?
Drawing on our survey of 769 CFOs and finance leaders in 32 countries and in-depth interviews with 22 CFOs, we envision a finance function that embraces technological innovations to improve effectiveness, increase efficiency and enhance insight. We envision the people required to make the most of this technology, and provide the complementary skills and competencies to drive decision-making in support of the organization’s purpose and strategy.
Our research shows that many CFOs believe that their current finance function is not equipped to meet the demands the future will place on it.
47% say their current function does not have the right mix of capabilities to meet its future priorities.
69% see the finance leader role fundamentally changing as traditional finance tasks are automated or managed in shared services centers.
We believe that many senior executives are, in fact, underestimating the changes on the horizon for the finance function.
As technology, globalization and demographic trends continue to disrupt organizations, whole industries and indeed the working world as a whole, the role of the finance function will increasingly be brought into question. Where once its remit was predominantly that of a reporting function that focused on balancing the books, it will become a data-driven decision-center.
Technology will play an increasingly significant role in executing many traditional finance tasks while at the same time generating greater insight. Meanwhile, finance people will spend a greater proportion of their time working with colleagues across the organization to make decisions in support of the strategy.
We explore the future of the finance function in two parts:
Advances in new technologies — such as in-memory computing, the cloud, analytics, mobility, artificial intelligence (AI), blockchain and robotic process automation (RPA) — offer CFOs an exciting opportunity to reimagine what the finance function should look like. In addition, many CFOs are now key players in driving adoption of these technologies more broadly in the organization, and in leading the transformation that ensues from technology innovation.
But to make the most of new technologies’ ability to save costs, manage risks and increase insight, finance leaders must challenge assumptions, take calculated risks and encourage experimentation. At the same time, they must also manage the risks inherent in each technological innovation.
CFOs must make bold moves to build a finance function that has the right people, with the right skills, to complement and get the most out of new technologies. Furthermore, many will play an important role in the people strategy for the organization as a whole. Success as a CFO will depend on combining the intelligence of smart technologies with the brains, emotional intelligence and interpersonal skills of talented people.
Building the future finance function: technology plus people
The answer to the question "Is the future of finance new technology or new people?" is, of course, neither one nor other but both. In the finance function of the future, leading CFOs will be those that strike the right balance between technology and people, and continually work to focus each on the tasks that best suit their skill sets. This will free the CFO up to focus on innovation, responding to the rapidly changing business context and driving the business forward.
- Hanne Jesca Bax
EY EMEIA Managing Partner Markets & Accounts, Ernst & Young Nederland LLP
Tel: +31 88 40 71325
- Robert Brand
EY Global CFO Agenda Leader
Tel: +1 201 872 5692
- Rick Fezell
EY Americas EY Vice Chair — Accounts
Tel: +1 312 879 6568
- Annette Kimmitt
EY Asia-Pacific Accounts Leader
Tel: +61 3 9288 8141
- Tony Klimas
EY Global Finance Performance Improvement
Tel: +1 212 773 5949