In this new era of fast-changing world with unprecedented change in business and its strategies, the challenges and expectation from finance function is quite aggressive. Finance as a function has been evolving but if we think back, we will realize that kind of sense of urgency among various organizations to digitally transform their operations is never felt this much and this is not surprising. Unfortunately, most of the organizations are now doing this as a part of compulsion and not as part of our vision for future. Historically organizations have been focusing a lot to improve revenue-generating operations by putting more efforts into their automation, manpower, process standardization, etc. while other enabling functions use to take the last pie of the budget allocation for their improvements and upgrades. However, the experience of journey of various organizations who have grown exponentially revealed a very interesting story. The key difference between the ‘success stories’ and ‘not so success stories’ lies in very small things that have been missed in the later e.g.:
- Uniform attention to improve overall operations be it direct revenue-generating activities or support functions.
- Continuous efforts in keeping a positive and unbiased atmosphere.
- Importance of culture and working environment.
- Ability to understand human behavior and act proactively.
- Giving suitable gears to everyone to perform their duties.
- Quality of manpower.
Business expectation is rising. Finance is no more a function of just doing bookkeeping, doing compliances, and reporting as needed by management, etc. In recent years the function has evolved dramatically, and organizations have realized its missing utilization. Analytics is taking the front seat against the regular finance operations. The biggest challenge with this expectation is that this comes as an additional expectation while all traditional finance roles remain there with no change. While this is easy to write and read but its certainly not that easy to meet this one. Following are the key questions to deliver in the new era.
- Rightly capturing the data in shape and form where it supports right analytics.
- Readily availability of data with the right technology support.
- Reporting with right analytics (almost on a real-time basis) focusing the needs and risks on the business.
No function other than finance have the kind of visibility of the overall financial health of an organization that governs the direction of business decision making, therefore, having the right set of readily available information to produce the right results will be on top.
To cater this expectation and delivering to this is impossible without the right use of technology and therefore, the digital transformation is no more a ‘choice’ but is now a ‘compulsion’ for organizations. Things can no more be managed manually in this new era. We have to accept this either by experience of others or hard way by experiencing our own self and of course, the 2nd way is much costly affair.
CFOs always have to wear the hat for bottom-line management, cost optimization, regulatory compliances, etc. and so far, almost everyone was putting most of their energies in the managing operations and these things were like by-products of normal operations. The game is now changed with the shift of the expectations on analytics and therefore to have right and quick decision making, it’s imperative to automate our process and use the technology as soon as possible to cut down on unproductive time and cost.
This new world requires to revisit few questions and their answers in the new era. These are:
1. What does business expect from the finance function?
Now finance has to play more as a business strategist and business partner. This need to be really practiced without compromising the independence of the function
2. How does the function to operate?
Gone are the days when having all the answers were the expectations. Now, this function is also expected to ask the right questions helping the right direction for the business.
3. What needs most attention for CFOs?
Apart from the regular duties of managing financial operations, corporate governance and regulatory compliance, etc., the technology infusion and its right usage is the new world.
Last but certainly not the least, in order to deliver effective output for future, the key ingredient is an effective team. The responsibility of ‘thinking’ can no more be rest with only few people called ‘Management’. This traditional way cannot work anymore. In these times, we have to have team which thinks and pose the right questions at every level.
In these new times where technology is a real disruptor, those who think it’s yet not the time need to revisit there thought process before it’s too late.