“Welcome to Finance in 2020. Finance is doing things that have never been possible before thanks to digital technologies. The access to multidimensional data from end-to-end allows total visibility of data of the company and of the clients. The result? The financial organization has evolved from a center of reports, control of expenses and accounting carried out with spreadsheets, to a powerful center of predictive analysis that creates value for the business “. This is the future that David A.J. Axson, an analyst at Accenture, described to us in 2015.
We are a little less than a year from 2020, and his predictions do not seem so wrong or distant. The complex legacy information systems are slowly being replaced by modern cloud platforms, which provide versatile planning, reporting and analysis tools. The adoption of robotic tools (RPA) and automatic learning (Machine Learning) has not only provided greater speed for the processes, but has freed time for the collaborators to allow them to make better predictive analysis and support strategic decisions.
However, I have the feeling that these changes have come faster than we expected. On the one hand, we have a group of professionals who lived with these legacy and limited systems, they learned to program and understand these complex systems and did true wonders with their spreadsheets. These professionals understand the business very well and remain connected to the organization with partners, suppliers, regulators and authorities, but in many cases they are moving against the current when trying to assimilate the wave of technological changes that every day they find lapping at their doorstep. And on the other hand, there is a proliferation of young graduates from universities who do not fear the cloud systems and emerging technologies; In fact, they studied and used the cloud and its resources as a matter of course while studying for their career and during their first jobs and professional internships. They understand technology quickly, and easily connect needs with solutions that exist in the market. They are young people under 30 who are very capable, who are open to new ways of doing things and who challenge new paradigms.
The result of this generational mix are organizations that are in the middle of a radical change in the way they operate, so that they can respond to market challenges, predict their behavior and be resilient. All at the same time.
What is the ideal combination of qualities and skills that these organizations need? To answer this, let’s review the “Agile Finance Revealed” study conducted by Peter Simons and Lori A. Sexton in 2017, which takes a snap shot of the new way agile organizations operate and, from this picture, describes for us what is an agile finance leader and what characteristics they share.
Let’s start by defining what is an agile organization. For Simons and Sexton, an agile organization has at least three attributes: to be constantly and strategically alert, to have the capacity and flexibility to implement changes, and to be adaptable in the means it uses to continually improve its performance. In this context, the authors found that these agile organizations had financial leaders who showed an “excellent” level of financial planning and analysis skills, and additionally had new and less traditional financial skills such as:
- Data visualization.
- Knowledge and experience with Big Data and Analytics.
- Skills to influence your organization.
Another common feature among agile finance leaders is the very advanced implementation in their companies of:
- Technologies in the cloud to accelerate the modernization of finances.
- Integrated business services, shared services and / or centers of excellence.
- Multifunctional teams with unique skills to support the decision makers in the organization.
- The creation of non-financial indicators (KPIs) to guide the allocation of capital towards the creation of value for customers and internal customers.
Comparing the technological resources between organizations that had agile financial leaders and those that did not, it is interesting to note that agile leaders are more likely to implement emerging technologies such as robotic process automation (44% versus 12%) and ERP in the cloud to standardize their accounting processes (45% vs. 17%). It is very revealing that companies supported by agile financial leaders showed a considerably higher probability of reporting positive revenue growth (89% vs. 63%) and higher profitability (95% vs. 70%).
Finally, Simons and Sexton identify as a recurring practice among agile financial leaders the identification and measurement of intangible value drivers, such as: customer satisfaction, quality of business processes, customer relations, quality of people (human capital) and the reputation of the brand. And that financial areas have a key role as intermediaries ensuring that relevant information is not only validated, but also made available to decision makers. Agile financial areas play a role as connectors, promoting financial discipline, execution, responsibility and strategy, acting as the connective tissue of the entire company.
In summary, to be an agile finance leader it is not enough to be very good at finances, you have to develop new skills, become familiar with new technologies, and put this knowledge into practice. A reassuring and hopeful discovery of the study is that neither the age of the people nor that of an organization are barriers to become an agile financial leader: companies with less than 10 years in being and those with more than 50 have leading financial areas. And most importantly, agile finance leaders have a unique opportunity, in the words of Simons and Sexton: “The wonderful benefit of an enlightened digital business is that, in addition to making better decisions and optimizing all your assets, you are also spending less on things that do not advance the company’s agenda or train employees or clients, and spending more on the strengths of your business. There has never been a more important time to be in finance using your knowledge based on data and your vision of company-wide operations to guide your organization through the uncertain times of today. ”
Author: Jorge Oropeza
Peter Simons, Lori A. Sexton, “AGILE FINANCE REVEALED, The New Operating Model for Modern Finance”, Oracle & AICPA, 2017.
David A.J. Axson, “Finance 2020: Death by digital”, Accenture, 2015. https://www.accenture.com/t20150902T015110__w__/us-en/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Dualpub_21/Accenture -Finance-2020-PoV.pdfTags: account reconconciliation, conciliac, Credit cards reconciliation, Fintech, Reconciliation, Stocks reconciliation