Tuesday, July 07, 2020

Finance 2025: Predicting the future of finance

Sep 13. 2019
Thavee Thaveesangsakulthai
Thavee Thaveesangsakulthai
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Digital disruption has been changing what we do and how we get things done in numerous ways.

Robots, smart machines and blockchain are working along side human beings to build and deliver products, provide services, as well as track and monitor resources. These technologies and innovations will make impacts that matter for the future of finance.

In this article, predictions on the future of finance are discussed to imagine what would be possible if we combine different technologies to reimagine the future, how the work of finance would get done and who would do it, and how finance could contribute even more to the success of the company. Finance 2025 will be about more efficient delivery of better financial information in a more timely and less expensive fashion, which will change what we do and how we get things done in finance organisations.

Here are some predictions of what we can expect to see over the coming years:

First, operational finance (end-to-end processes, including order-to-cash, procure-to-pay, and transactional accounting), will be leaner while business finance (including business partnering reporting, planning budgeting and forecasting) will continue to grow. The focus of finance will shift to design, configuration and maintenance of systems, with real-time data processing and monitoring.

Automation will simplify processes and free up people, leading to a hybrid workforce model, a combination of traditional employees, along with contractors or freelancers. There will be a premium on talent that understands technology and business. The workplace in finance will change, with finance command centres with smart dashboards and chatbots implemented. Stakeholders will benefit from seamless, intuitive interactions with technology and data.

Second, the role of finance will also change. Business partnering will shift upstream, from budgeting and reporting, to scenario planning, advanced forecasting and better visualisation. Computers will handle routine requests from business leaders, allowing finance to be more proactive in business planning and resource deployment.

As finance goes real time, periodic reporting will no longer drive operations and decisions. Both actuals and forecasts will be produced instantly on demand. Forecasting will not be performed once a month or quarterly, but will be made in real time, with continuous tracking of sales, cash flows, inventories, etc. The workforce in finance will integrate data scientists and professionals who can engineer automated reporting, forecasting and end-to-end processes. These new employees will be working alongside traditional business analysts to deliver real time information and insights to finance customers.

Self-service will become the norm, where budget queries and report production will be automated. Business leaders can get their questions answered by a digital voice on their smartphones. Over time, smart agents will learn what kinds of business information an individual needs, and deliver that information proactively. Data in spreadsheets will be replaced by visually rich information that is intuitively accessible and easy to use. Chatbots will become the primary mechanism by which people interact with technology and data.

New service delivery models will emerge as robots and algorithms join a more diverse finance workforce with integration of freelancers, gig workers and crowds. There will be more collaboration among finance, IT and the business. Teams will include experts in robotics, blockchain, and cognitive technologies, with diverse talent models.

As more companies move to cloud-based enterprise resource planning (ERP), they are choosing to become more standardised. Instead of building customised systems, companies will buy what they need from the marketplace of apps and microservices. Cloud-based ERP will help ensure that they are constantly updated on the latest systems releases. This will reduce the complexity and cost of technology without sacrificing functionality.

Although automation and cognitive will make it easier to get the work done, it will still be difficult and tedious to align and integrate data. Data is a technology issue as well as a cultural issue. If a company lacks leaders who value data quality, the organisation will struggle with data challenges that keep people from doing their best work. Instead of delivering insights and services to the business, these organisations are constantly backfilling, distracted by questions of data integrity and completeness.

Las, the workforce of the future will work with cross-functional teams and leverage constant collaboration. Data scientists will work alongside business analysts to solve problems that no individual could solve alone. Employees will be doing new things in new ways. CFOs should work with HR to define the talent requirements and make sure that the new hires represent the future that the companies are looking for, including strong customer service orientation, flexibility and good collaboration skills. Automation tools including predictive modelling, self-service reporting and digital assistants will enhance the capacity for employees to provide more advice on strategic interventions.

As the needs of businesses are growing and the pace of innovation is accelerating, the CFO can either plan for change, or plan to retire. They need to work now to get the right people and technology in place to take advantage of the inevitable disruption. The years ahead hold great promise for finance organisations that want to create more value for the companies they support. Getting there may not be smooth and easy, but it will certainly be exciting.

Thavee Thaveesangsakulthai is a financial advisory services partner at Deloitte Thailand.

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