When it comes to technology, there is no telling how far it can go or how much it can revolutionise our world. That goes for both our personal lives and the organisations that we work for.
Technology is steadily changing the way we think, the way we interact with one another, and the way we do business. For many years now, it has been transforming business operations, models, and mindsets. Just in the past couple of years, this transformation has dramatically accelerated and shaken up the workings of the finance function. The impact of these changes is explored through AICPA & CIMA’s Future of Finance 2.0 research project and specifically through the paper The Digital Journey of Finance [login required].
Our research reveals that digital transformation is no longer about gaining a competitive advantage; it is necessary to drive value and, ultimately, for business survival. Our findings show that the finance function is uniquely positioned to lead a broader digitisation across the business.
How does technology empower finance professionals?
In our research, finance professionals shared that technology has not only created the opportunity for their organisations to generate sustainable value but also empowers them as individuals to drive value creation.
How empowered do you feel by technology within your organisation? Are you fully embracing technology and the opportunities it brings?
Depending on your role and the nature of your organisation, technological empowerment can help you manipulate data successfully, influence decision-making, lead diverse teams, manage multiple customer accounts, and meet or exceed productivity targets.
Empowerment allows finance professionals and leaders to:
Lead the digital strategy
Long gone are the days when the finance function was solely responsible for managing costs and improving productivity. With technology becoming a driving force of change, finance professionals’ roles are expanding to facilitate digital strategies and help foster a digital culture within the business. According to the World Economic Forum, “Organizations with a strong digital culture use digital tools and data-powered insights to drive decisions and customer-centricity while innovating and collaborating across the organization.”
Does your organisation have a transformative culture that starts with an organisational vision that is supported by digital strategies? Finance should be in a position to drive this transformation. Because of its deep understanding of the business, finance can ensure that a digital roadmap represents what the organisation needs to achieve and how it will be achieved.
Technology also creates the environment for the finance function to take a leading role in data strategy to achieve maximum value across the organisation.
Our research has shown that finance lags behind the rest of the organisation in new technology adoption because investment in customer-facing technologies is often prioritised. Therefore, finance must ensure it has a long-term strategy for technology adoption and integration within finance operations. To do this, finance teams must ask themselves how they can stay adaptable to evolving technologies and industry trends.
Questions to ask when planning to implement new technologies:
- Are the current systems and tools compatible with emerging technologies?
- What is the return on investment of implementing technology in terms of time, cost, and value added?
- How will new technologies affect client relationships and communication?
- Is the organisation prepared to invest in training to upskill the finance team?
- How will data security and privacy be ensured when integrating new technology?
Collaborate cross-functionally
Our research revealed that the finance profession is expanding in breadth and depth to affect areas like technology, sustainability, and leadership. Finance professionals are now more than ever viewed as savvy analysts, communicators, decision-makers, and business partners who are growing and improving organisations internally to influence business models and decision-making.
Finance professionals must branch out beyond their functional space to connect and build trust with other business functions, including IT, HR, operations, procurement, and commercial teams to drive changes. It’s vital that finance has an understanding of the work of these areas in order to collectively identify challenges, find solutions, and explore new opportunities.
Questions to consider to improve cross-functional collaboration include:
- How can finance’s expertise contribute to the success of other departments and vice versa?
- Are there potential barriers such as terminology which need to be addressed?
- What tools or platforms can facilitate seamless communication and information sharing?
- How will the impact of cross-functional collaboration on overall organisational performance be measured?
Streamline processes
Increasingly, robotic process automation (RPA) technologies are being employed by finance functions to streamline processes and are programmed to create efficiency and increase productivity throughout organisations. Finance should be empowered through technology to not only take the lead to create an infrastructure environment with a single point of entry but also identify opportunities for automation and be the design architects to lead the scoping requirements.
The finance professional must ensure technology and automated processes have adequate control measures in place to mitigate risks, support data quality and governance, and meet regulatory requirements, while applying critical judgements along the way. Automation can enhance efficiency and productivity, but it cannot replace the unique qualities and abilities that humans bring to the field, such as creativity, adaptability, emotional intelligence, and ethical judgement. A successful finance team often combines the strengths of automation with the invaluable contributions of human finance professionals.
Questions to consider when implementing technology for automation include:
- What potential risks or errors could arise from relying on automation and how can these be mitigated?
- What are the cost-saving opportunities associated with automation versus the initial investment?
- How can it be ensured that the automation technology integrates seamlessly with existing systems, and what level of customisation or configuration is necessary?
- How will potential resistance to change from team members be addressed?
Extract insights
Ronald Reagan, former US president, once said, “Information is the oxygen of the modern age.” It is well known that the ability to quickly dissect and analyse information, translating data into actionable insights to drive decisions, is invaluable and, in turn, positions organisations to generate sustainable growth and profitability.
Finance professionals should be embracing technology to interpret data more accurately, enable real-time visibility of information, do smarter reporting, and communicate effectively to both internal and external stakeholders to enable swifter and more impactful decision-making. Technology and tools’ usage must be continuously refined to extract more meaningful insights over time.
Finance professionals should be leveraging analytics techniques such as data mining, machine learning, and predictive modelling to uncover trends, patterns, and predictive insights from data.
Questions to ask your finance team include:
- What data-driven insights could technology provide that are currently lacking?
- Are there opportunities for automation in data collection, cleansing, or analysis?
- What are the skills gaps within the team that need to be addressed to effectively use a technology and manage the potential high volume of data after a technology is implemented?
- Are there ethical or compliance considerations to address when using technology for insights?
Our Future of Finance 2.0 research corroborated that technology is the universal language to help organisations generate enterprise value, drive innovation, and maintain sustainable growth. Digital transformation has shifted from being a competitive advantage to a necessity to drive value. The accounting and finance profession is transforming, and technology is paving the way forward.
Read AICPA & CIMA’s paper The Digital Journey of Finance [login required] and visit the Future of Finance 2.0 research project for additional reports.
Nancy Marc-Thrasybule, CPA, CGMA, is an associate technical director—Management Accounting and Jocelyn Turner, ACMA, CGMA, is a former associate technical director—Management Accounting at AICPA & CIMA, together as the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.