Finance has become one of the most exciting and value-adding parts of a company as it develops a more digital approach and the more agile structure needed to go with it, according to a report by Accenture.
However, some finance functions are still struggling to become truly agile.
Finance professionals have been energised by digital transformation, which automates dull and mundane tasks, Accenture’s CFO Reimagined report said. It also brings richer and more timely data, access to sophisticated analytic models, and advanced visualisation tools, the report said. As a result, 77% of CFOs say there has never been a more exciting time to be a finance executive.
However, to succeed in this new world, CFOs must adopt agile working practices, said UK-based David Axson, global lead of CFO strategies for Accenture Strategy.
“Almost all CFOs are talking about agility in the finance function to address rapid advances in technology,” he said. “Technology is evolving at warp speed, and that’s challenging in terms of where and how to invest and how to get a return on investment. Technology is also changing the way regulations are applied as the regulatory footprint expands.
“There are also significant data, security, and protection issues that are now front and centre for CFOs. All those things together are changing the way finance professionals work and the types of skills they need.
“However, finance executives are still wrestling with this area as you don’t learn about being agile in a classroom, it’s more about a set of behaviours and interactions with your colleagues; and organising the way work gets completed.”
Experts offer the following advice for becoming more agile:
Start with manageable goals
If finance leaders are not agile, they will become stressed by the need to keep pace with rapid changes in technology alongside daily demands.
Peter Simons, FCMA, CGMA, head of future of finance research at the Association of International Certified Professional Accountants, said an agile finance function is defined by its ability to handle both — it can manage the current business effectively while allowing dedicated teams to work on new initiatives.
“These teams operate with autonomy but with tight budgets and good governance at each stage,” Simons said. “They innovate at low cost in an iterative, experimental way, developing prototypes quickly, testing and learning from failures, and refining prototypes. But they do not scale up to develop and launch a finished, viable version until confident in its potential.”
Simons highlighted research by Gartner showing that 72% of digital initiatives fail to meet their revenue targets, which is why the “starting small” approach is so essential.
“Some businesses are almost causing the annihilation of the company by over-strategising new technologies,” he said. “The challenge is to manage daily business while trying new initiatives on a small scale to see if they work before rolling them out.”
Anticipate changes early
Agility also involves scanning the horizon to anticipate changes and re-allocating resources quickly to what provably works, Simons said.
“These disciplines have been applied to IT development, but truly agile functions apply it to all projects, to avoid the expense of any significant failure,” he said.
The effect is to accelerate the entire management cycle of deciding, acting, reviewing, and reporting to your stakeholders to make you more alert, flexible, and nimble.
While some finance leaders are still finding their way towards agility, Association research has shown that, once achieved, agility helps them become more efficient and better able to contribute insight and influence in the business, Simons said.
Businesses with agile finance functions are also more likely to be growing profitably, according to the research.
Use tech to free up time
Technological changes may be forcing the move towards agility, but they are also enabling it.
The Accenture report quotes Christopher Weber, executive vice-president and CFO of oilfield services group Halliburton, which is increasingly automating transactional activities in service centres. “This will free up time for our people to be more focused on higher value work such as analysis and trendspotting,” he said.
In another example, the CFO at a Greek telecom company said a move to rapid reporting is enhancing agility. “Ten years ago, it took 30 days to get the month-end results, now it’s more like four or five days,” he said. “It means I can make decisions faster if something needs to change.”
Build an agile workforce
CFOs are looking to use more agile talent management and recruitment processes to help them keep on top of technological changes.
San Francisco-based Tim Hird, an executive vice-president with Robert Half, said: “In the digital world, all CFOs are looking to get more financial information more quickly and more accurately to be able to analyse and interpret numbers and make strategic recommendations to the board.”
They are doing this, Hird said, with leaner teams than five years ago, particularly in middle management. “They are having to recruit and train people with rarer skills and traits such as around accounting systems, data analytics, and great communication skills,” Hird said. “CFOs often don’t have access to these skills internally to manage these extra projects, and organisations don’t want to scale up their permanent headcount for one-time initiatives.”
So finance leaders are switching their approach towards building a talent pool they can access. This may come from a wider variety of sources such as specialist interims or consultants, and outsourcing.
In the Accenture report, Ambrose Shannon, managing director, Accenture CFO and enterprise value, financial services, said: “As the DNA of finance talent pools evolves at pace, many CFOs are establishing hubs of deep expertise, in markets where there is competency at scale.”
Companies must look for candidates who are “adaptable, resilient, and inquisitive”, according to Daniel Gentili, general manager of finance and integrated services at Australian oil company INPEX.
“They need to ask: ‘Is there a better way to do this? Can I get this information differently? How did that information come out once I pushed that?’” Gentili said in the report. “They must be prepared to bounce if they fail and go back and look again.”
Meanwhile, Hird said that employees also want to be part of a more agile and flexible workforce.
“They want to work on exciting and innovative projects and accelerated professional development,” he said. “So they are moving to more flexible working arrangements much earlier in their working life.”
Consequently, CFOs are finding talent pools that they have not used before, but it is proving beneficial to them as they build a more agile finance function, he said.
— Tim Cooper is a freelance writer based in the UK. To comment on this article or to suggest an idea for another article, contact Neil Amato, an FM magazine senior editor, at Neil.Amato@aicpa-cima.com.