By David Davidson, Senior Managing Director, Accenture Strategy, CFO & Enterprise Value – North America
In Accenture’s research report The CFO Reimagined: from driving value to building the digital enterprise, CFOs said that better collaboration, new technologies and changed working practices are driving a major shift in the role of finance. This is particularly relevant as CFOs seek to maintain business continuity, lower costs and find new sources of revenue in an extremely challenging environment.
Due to the widespread adoption of digital technologies, many of the core functions in finance – such as transactions, accounting, compliance, and reporting – are being automated away. At the same time, the growing easy availability of financial data across the enterprise has empowered other parts of the business – from sales and marketing to HR and manufacturing – to take on some of the planning, forecasting and budgeting activities formerly performed by CFOs.
By and large, finance leaders are firmly behind this trend and want to help non-finance business units embrace the shift. In the survey, two-thirds (67%) of finance leaders said they believe they can and should train executives in non-finance functions to help them support activities such as financial reporting, in addition to planning, budgeting and forecasting. And 78% believe that digitalization will facilitate a rise in self-service.
The shift in roles was already happening, but I believe the trend is accelerating due to the global pandemic. Self-service financial reporting and analysis enables faster, more informed decisions. Agility increases as line-of-business managers adapt faster to new information and fluctuations in the market. What’s more, the move to self-service frees up finance people to spend their time enhancing other areas of the business.
That’s not to say the transition doesn’t present some formidable challenges. There can be resistance from line-of-business managers to taking on more financial and analytic roles. For many, financial analysis falls outside their comfort zone, and many lack formal training in the field.
This is where CFOs and their teams can play an important new role: helping business leaders sharpen their financial acumen and become adept at handling basic financial analysis and planning tasks. Moreover, CFOs can take the lead in educating non-finance leaders on why the shift to more self-service and autonomy for LOBs will enable the business to perform better. This illustrates a key point: that the successful adoption of self-service finance by lines of business more often depends on cultural, not technological, factors.
Making the work experience more intuitive for business managers will make a difference in easing the transition. One of the most common complaints from employees goes something like this: "Why is my personal life so simple and so integrated, but when I go to work, everything seems so complicated?” CFOs can help by overseeing efforts to make financial analysis feel a lot more like a smartphone experience.
They can also work with business teams to understand their needs and provide them with common analytic capabilities, such as capitalization and liquidity models, to serve the business in a robust way. Many of these capabilities can be deployed efficiently and cost-effectively though a central online analytics hub.
Yet even as line-of-business teams tackle more financial planning and analysis tasks, CFOs will need to stay involved as the enforcer of financial rigor. They can provide governance tools, controls and expert support so lines of business use the data in an effective way. To borrow an aviation analogy, the finance organization can act like a “control tower operator” to make sure that business teams are “flying safely” by guarding the integrity of the data and the financial analyses based on it.
The latest generation of cloud-based enterprise performance management solutions can help business teams adopt industry-leading practices for financial analysis, planning, forecasting and reporting. Oracle Cloud EPM, for example, provides a unified platform that drives connected business processes, ensuring consistent use of financial best practices and access to a single source of truth across the enterprise.
At Accenture, we’ve been working with companies to design and deploy these LOB-friendly cloud applications worldwide. We’re experienced at helping finance organizations define what processes can and should be automated, and then working with them to set up the right combination of standard, leading practices to drive better performance—and at the same time, future-proofing the business with continuous software updates.
For instance, we recently helped a global consumer goods company and a global retailer leverage Oracle Cloud EPM to support a zero-based budgeting initiative to drive out costs throughout their organization.
Some think the role-shifting which I described above could signal the end of finance. I disagree. As automation and self-service has become the norm, finance actually has a bigger role to fill—as strategic partner to enterprise leaders—and wields more capacity to focus on empowering the business in new ways. We anticipate new emphasis on planning and forecasting as finance uses new tools to enhance scenario analysis and develop keener insights. And, rather than spending so much time creating reports, we think finance will spend more time partnering with lines of business, providing guidance, and pointing out new avenues for profitable growth.
CFOs can kickstart the process of reimagining finance by defining the organization’s goals and determining the set of capabilities it will need to be an effective business partner over the long run. It’s a process I call “defining your North Star.” Then, as finance starts moving towards its vision, CFOs can help build momentum by making sure that finance is showing tangible signs of progress while keeping an eye on its North Star.