Chapter 1
Changing role and rising expectations of finance
Finance’s role is no longer just about accounting and controlling. An expanding ecosystem of stakeholders expects a broader range of answers.
Increasingly, businesses are looking to finance to play a role that goes beyond accounting and controlling to include providing decision-makers with support through analytical capability and business insights.
Finance is increasingly helping marketing teams to predict the impact of specific advertising campaigns and below-the-line promotions on sales. With many companies establishing new sales channels, routes to market and digital services, this trend will only accelerate.
Finance is also expected to meet the demands of a growing number of stakeholders who are interested in social responsibility, sustainability, short-term financial performance and long-term value.
In addition, finance is accountable for reporting to stakeholders on the impact of increasingly complex regulatory requirements from governments, stock exchanges and tax authorities.
EY 2020 DNA of the CFO
87%of CFOs believe they will need to put new support structures in place with additional skills to ensure effectiveness in future.
Chapter 2
The impact of advancing technology and digital disruption
This is the ideal time for finance to upgrade its digital capabilities to ensure it has the people and tools to meet changing expectations.
The continuing development of enterprise resource planning (ERP) systems and the emergence of disruptive technologies, such as automation, have given finance the opportunity to offer the same level of service with fewer people.
In parallel, new possibilities created by increasingly powerful data analytics go beyond just financial performance and are relevant to the wider enterprise. Typically, businesses look to finance professionals to manage and interpret this data because they have the numeracy and software skills to do so efficiently and effectively.
External drivers are also accelerating technology change and digitisation. For example, tax authorities around the world are shifting to digital submission and reporting, while many ERP providers no longer support their older on-site versions. Together, these drivers are creating a burning platform for companies to upgrade.
These factors also have an impact on finance’s operating model. For example, the cost of labour is having less influence on decisions about where to locate finance centres. Instead, the prevalence and fast-changing nature of disruptive technologies means that sourcing appropriately skilled people becomes more of a focus. In addition, outsourcing can become more attractive as the third parties involved have the tools to become more agile while staying up to date with the evolution of emerging technologies.
EY 2020 DNA of the CFO
76%of CFOs believe that the accelerated pace of technology change over the last two years has had a significant impact on finance’s role and shape.
Chapter 3
How to attract the finance professionals of the future
To deliver in the ‘new normal’, finance needs to attract talent with strong digital skills, which could mean partnering with third parties.
To respond to the finance function’s changing role, businesses will likely seek people with stronger technology and digital capabilities. In future, this means that a proportion of finance talent may not come from a traditional accounting background. Instead, finance business partners may come from technology or data-driven disciplines, such as economics or the sciences.
Businesses will need to make jobs attractive to future talent. Traditionally, there was an expectation that all finance employees would be office-based. But this expectation has been turned upside down by the pandemic. Put simply: finance and shared service centre (SSC) leaders must reconsider what the ‘new normal’ means for their workforce.
EY 2020 DNA of the CFO
78%of CFOs think they will increasingly partner with external parties to provide finance processes, sub-processes or activities requiring specialised knowledge and technology, such as tax and treasury.
Chapter 4
What does finance’s changing role mean for CFOs?
To create a finance function for the future, CFO’s need to rebuild their operating models around platforms, partnerships and people.
In future, the finance function will need fewer, but more highly skilled, location-agnostic professionals. Therefore, to create the finance function of the future and address these disruptors, the CFO needs to rethink finance’s operating model in the context of platforms, partnerships and people.
Platforms
Platforms relates to the technologies businesses use and how they are integrated, deployed and secured into the ecosystem to drive competitive advantage. More frequently, businesses are choosing to overlay complementary technologies such as optical character recognition (OCR), artificial intelligence (AI), robotic process automation (RPA), machine learning and self-service solutions to improve efficiency and user experience.
To find out more about what building the right technology platforms involves, register to download our report.
EY 2020 DNA of the CFO survey
14%Research shows that e-invoicing solutions comprise 14% of the most popular solutions that finance is adopting.
Partnerships
Businesses may need to co-source or outsource elements of their finance and tax functions to do the jobs that are not strategically important or to provide the expertise they do not have internally. Businesses which invest in ecosystem relationships will benefit in a number of areas such as a lower risk profile and lower costs.
To find out more about why nurturing partnerships is so important, register to download our report.
EY 2020 DNA of the CFO
27%of UK finance functions already partner with external companies for transactional processing.
2020 Tax Finance Operate Survey
72%of respondents confirmed that they have, or are considering, co-sourcing or outsourcing selected tax and finance activities as a solution to the challenges facing their finance and tax functions.
To respond to the finance function’s changing role, businesses will likely seek people with stronger technology and digital capabilities. In future, this means that a proportion of finance talent may not come from a traditional accounting background. Instead, finance business partners may come from technology or data-driven disciplines, such as economics or the sciences.
Businesses will need to make jobs attractive to future talent. Traditionally, there was an expectation that all finance employees would be office-based. But this expectation has been turned upside down by the pandemic. Put simply: finance and shared service centre (SSC) leaders must reconsider what the ‘new normal’ means for their workforce.
People
When looking at the operating model in the context of people, finance leaders should consider how they plan to organise the much smaller number of more skilled finance professionals they will need in future. The CFO must take a strategic decision on who will be sourced, recruited, retained or developed to transform finance talent into a sustainable workforce.
Learn more about platforms, partnerships and people in our report.
Implementing the right operating model
Organisations can take steps to support new business models and create value by expanding the way finance works cross-functionally within an extended ecosystem. To achieve this, key considerations include:
- Evaluating and transforming the entire finance function when defining a new operating model that covers group, centres of excellence (CoE), shared service centres (SSC), business units (BU) and market
- Ensuring that their global business services model delivers benefits and synergies across the back-office
- Using end-to-end process design, ownership and delivery to drive performance improvements
EY 2020 DNA of the CFO
61%of respondents to a shared services outsourcing network (SSON) survey agreed that their talent sourcing strategy is shifting from transactional to knowledge work.
EY 2020 DNA of the CFO
47%of businesses say that their back-office shared service centres are now multi-functional.
Chapter 5
Four steps that finance leaders should consider taking now
Start moving towards a finance function that continues to create value in a much broader ecosystem.
To prepare for their function’s new role, we recommend that finance leaders:
- Reassess technology platforms and solutions to support an increasingly remote workforce and drive ‘touchless’ processing with high levels of user experience
- Consider deploying a partner ecosystem to achieve agility and cost-efficiency while driving increased capability
- Take strategic decisions on how to organise and develop skills amongst the significantly reduced number of finance team members, who will be focussed on driving long-term value for the business
- Reconsider what is now the right balance between onshore, offshore, business process outsourcing (BPO) and managed services to meet future demands on the finance function
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Summary
Due to the impact of converging megatrends and rising stakeholder expectations, the finance function needs to transform. CFOs must build new operating models that support fewer people with the right partnerships and platforms. We outline four steps to help lay the foundations for a finance function that continues to create value by working cross-functionally within a much broader ecosystem.
