KPMG and Board International recently organised a seminar to talk about the Future of Finance in Belfast, bringing together finance professionals from a wide range of industries including Technology, Financial Services, Manufacturing, and the Public Sector.
In this article, we highlight some of the key discussion points of the day, pointing to the direction in which the finance function is heading and what finance teams can do to help themselves get there.
The main discussion of the day centred around a recent KPMG study on the finance function of the future. In this research it was found that 90% of finance organizations see data and analytics as a high or moderate investment priority, which is juxtaposed with the 67% of CEOs who have prioritized their own intuition over data-driven insights in the past three years.
Data is highly prevalent in modern organizations but it often sits in silos, making it difficult to create a trusted, complete version of the truth for decision-making. It is no wonder that CEOs still favour their own intuition when they are presented with conflicting reports and figures, so there is some work to be done here in implementing a solution which delivers the accurate data foundation required to support financial decisions.
Another key trend is digital transformation, which continues to gather momentum. The finance function must keep disrupting itself to meet the demands of its customers, including regulators, corporate boards, sales and marketing departments, suppliers, and both internal and external auditors. Stakeholders now expect the office of finance to serve as a business partner, not just a department focused on transactional processing and historical reporting. The function must now provide predictive and prescriptive insight to drive optimal performance and real-time decision making.
Finance need to develop an agenda (and a working solution) to deal with this shift. With a clear line of sight to the impact of disruption on both the business model and the operating model, the CFO has the chance to turn disruptors into opportunities for competitive advantage and growth.
The future of finance also sees an increasing reliance on data – hence 90% of finance teams seeing it as an investment priority. Initially, data functions were focused on regulatory compliance, however executive teams now want to see constant innovation and results from the Chief Data Officer (CDO) that generate value and progress.
With this in mind, businesses are increasingly turning towards Integrated Business Planning (IBP). Board defines this as a best practice approach which combines financial and operational data from across the organisation and ‘enables companies to maximize their output by linking strategic plans with sales, operational, and financial plans, giving greater visibility of the relationships between resources, capabilities, and results.’
Companies can use IBP to collectively produce an agreed go-to-market plan to which every department has contributed. This joined up way of working will help the finance team to become a trusted advisor to all departments, giving them complete visibility of the impact of operational activities on financial performance (and the ability to model these impacts before decisions are made), making them a key player in business decisions.
The importance of data to each of the above themes is highly apparent. Its presence in the organization is a given, but its effectiveness depends on its accuracy and the extent to which it is collated, compared, and utilized to inform business activities. And as finance departments embark on their digital transformation efforts, they must ensure the right solutions are in place to maximize its potential.
To learn more about the topics discussed in this blog, take a look at these key resources: