While all the above presents a challenging picture for CFOs and the finance function, it is evident that the direction of travel for the time being will be even further complexity. The imminent implementation of the base erosion and profit shifting (BEPS) project will be a significant development, as will the expected increase in ESG reporting.
Denardo believes that when it comes to transforming the finance function, what's most important is how it can add value internally. “I think that defines what you keep and what you look for in an alternative model,” she says. “If I were a CFO these days, I’d be looking at my roadmap — what do I want to invest in versus what I may need an alliance partner or somebody else to invest in for me.”
This concept of the roadmap is key, especially with so much coming down the line as well as any possible unexpected developments, such as global pandemics. Where do CFOs want their finance function to be in the future and what do they need to do now to make that a reality?
Critically, this can’t be seen in isolation but must be viewed in the context of the broader business. “We have conversations with CEOs and CFOs where we look at the organization’s strategic plan alongside the finance function,” says Garrido. “If in five years a business will have grown by 50% and moved into new countries, then the finance function will need to look a particular way to deliver on this, in terms of work involved, the number of people required and all the associated costs.”
Once that has been identified, CFOs can then start to plan how best to resource it, be it through automation, co-sourcing, shared service centers and so on. Critically, technology and automation aren’t magic bullets and must be paired with a talent strategy and process improvement.
As Lapinskiene concludes: “I think it’s essential that the finance function of the future builds an ecosystem of partners and alliances. They will face labor challenges and the speed of technology change will be very challenging for many to handle. So, building the ecosystem around yourself and having trusted strategic partners who can help you handle things in the rapidly changing world has become very important.”