Digitalizing the Finance Function to Thrive in the Next Decade

It is no more a revelation or insight that the finance function is undergoing tremendous transformation. The transformation is not just about the way finance operations are conducted, but also about the role of the CFO in the organization. From heading a mere support and horizontal function, the CFO is now seen as a quintessential co-pilot for the CEO, partnering in strategic decisions and enabling and steering the organization with critical perspectives on various aspects. It is imperative that in the next decade, the CFO and the finance function scale up to be counted. It is not a choice – it is inevitable.

On the other hand, many CFOs struggle to keep pace with this changing dynamic because of the traditional ways of conducting this function. In this traditional way, book keeping and operations form the core of the work and attract maximum attention. Processes are pre-set based on a prior definition and follow a linear path. The impact of carrying out the processes is evaluated almost always post-mortem. The CFO continuously strives to achieve and maintain credibility of the numbers reported.

This evolution of the CFO and the finance function therefore demands a paradigm shift in the way the function is conducted.

The following are the four cornerstones of running the finance function in the next decade

In achieving these 4 “States of being”, so to say, the finance department has to transform leveraging digital technologies as levers.

Cost reduction through efficiency is an all-round requirement and the CFO needs to lead by example. Making the finance function efficient is therefore the first priority. Automation of tasks and priorities is the most obvious lever for achieving efficiency.

Bots need to become ubiquitous within the Finance Department

The prevalent approach for business is to take a linear approach of transaction processing and then analyzing the captured data. The transaction process follows a pre-defined path with controls enabled to ensure adherence to the path. The evaluation of the effectiveness is also pre-defined as a subsequent activity.

This linear approach to transaction processing is not tenable in a dynamic world. It is imperative that the processing of transactions is embedded with intelligence to make it more effective and constructive. Infusing the processes with intelligence enhances the intrinsic value of those processes.

The Smart Digital Assistant uses cognitive solutions to make processes more wholesome in terms of quality

As an organic responsibility, the CFO generates, articulates and provides perspectives on the performance of the organization. The CFO is responsible for the data that is used for this. It is also essential that the data is seen as credible and reliable.

Traditional reporting models are highly reactive and focused on stating facts. They do not reflect the inter-dependencies between KPIs or the impact of internal process efficiencies on the performance.

The Financial Control Tower enables the CFO to take and provide a holistic view of data and performance to the whole organization. In addition, it also helps in increasing credibility by using digital technologies such as AI/ML and Blockchain for controls and audit processes.

Once the core of the finance function is secured in the new age dynamics with efficiency, effectiveness and credibility, the CFO can then embark on enhancing the value from the finance function. The scope for excellence comes from many perspectives. Using AI/ML for predictive & prescriptive analytics, digitalizing the external reporting, heuristics for key decision activities, etc. enhance the scope for achieving excellence

The Seer is a collection of intelligent heuristics and solutions aimed at elevating the finance function to a new age function that is data driven and adds significant value to the Organization.

In summary, it is essential for the CFO and the finance function to upgrade and elevate themselves in the new age to fulfill the new call of duty. This transformation is to be achieved by embarking on a journey of taking the finance function through various stages, leveraging digital technologies.