If the past few years have taught business executives anything, it's that disruption has become a normal part of the economy.
To remain competitive in the face of this disruption, finance leaders must have a defined vision for working in a digital world. Executives and chief financial officers (CFOs) can put plans in place now to facilitate a financial transformation in 2023.
Over the next year, you can have a financial transformation by putting in the work now to invest in the right technologies and the right people.
- Industry leaders expect CFOs to lead their businesses and financial planning and analysis (FP&A) teams in digital investments. While this may require a cost reduction in other areas, strategic investments can increase customer retention, satisfaction and order size.
- A crisis presents an opportunity for reinvention. The switch to remote work provides the window for increasing digital investment, which can decrease the cost of business operations. Digital initiatives are not new, but CFOs should continue their acceleration.
- As you continue to scale up technological innovation and digital investments, focus on automation and a strategy to mitigate the effects of inflation. This may include increased robotic process automation (RPA), reporting automation and process mining.
Financial Transformation in 2023
One study shows that 78% of CFOs expect to maintain or increase enterprise-wide investments in the next few years.
And for good reason—customers may be willing to pay more for quality goods and services when the digital experience is positive. To prepare for a financial transformation in 2023, consider the following trends.
1. Transactions Will Increasingly Become Touchless
One technology trend that will become more prevalent in the next year is the use of blockchain in financial automation.
As enterprise resource platforms (ERPs) likely integrate with cloud technology, further automation and innovation will simplify business operations. This will free human capital for other tasks while also causing some finance teams to become leaner.
Operational finance staff (i.e., order-to-cash, procure-to-pay, transaction accounting, etc.) may shrink, but specialized finance (i.e., business partnering, reporting, planning, budgeting, tax, etc.) may grow as expectations from business finance support grows.
2. Providing Business Insights Will Grow More Important
Just as businesses have multiple data stores and enterprise programs, many businesses also lack a single source of truth that would collect and house that data.
The FP&A team's ability to control this process and direct other resources will depend on how much the team adds value to the business. This requires the ability to provide rapid insights and top-notch customer service.
3. Periodic Reporting Will Become Less Dominant
Today, FP&A teams depend on cyclical reporting schedules. But when financial teams can produce actuals and forecasts on demand, the distinction between operational and analytical data diminishes.
Nonetheless, finance teams must continue to meet outside demands, such as providing detailed information to key stakeholders more frequently.
Right now, limitations regarding technology or data processing inhibit finance cycles. Once the month-end close process is irrelevant, financial reporting will happen in real time.
4. Self-Service Becomes More Normal
Employees are becoming increasingly familiar with automated services. Some people even prefer working with a digital assistant or chat service rather than a live person.
Services, including regular budget queries and report generation, will become automated. As stakeholders continue using self-service platforms, FP&A teams can learn to deliver information proactively.
This can replace the function of accessing data in spreadsheets. With intuitive, user-friendly, self-service portals, internal customers will expect quality responsiveness from the finance team.
5. The Business Operating Model Will Shift
Once disruptive facets of the workforce are now commonplace. In the next year, expect to see the integration of freelancers, gig workers and crowdsourcing into workplaces.
This integration goes hand-in-hand with further automation. Finance teams can use automation to lower costs, reevaluate organizational structure and include new workers. These changes will also help finance-as-a-service expand beyond mid-market companies.
Expect this process to affect the offshoring and onshoring process. To prepare for market disruption, focus on building a near-term multifunctional and dynamic team.
6. Finance Applications and Microservices Become More Prominent
Financial teams will likely continue to rely on ERPs. However, expect that finance apps and microservices will disrupt ERP vendors and usher in more innovation.
For instance, many ERP vendors have begun incorporating blockchain technology into their programs. Along with automation and cognitive tools, these vendors will produce a new generation of products.
This change will coincide with new competitors entering the field. ERP vendors will probably incorporate microservices and specialized apps atop the platform. This could reduce the complexity of use and improve access to data.
7. Data Standardization Will Remain Top of Mind
Automating financial processes requires data standardization. Most companies who house data across multiple platforms expect to continue to work toward aligning and integrating this data.
For example, mistakes with seemingly minimal descriptors such as commas, abbreviations, data-entry fields, nomenclature and others can have an outsized effect. Improving data standardization will facilitate automation and decrease the CFO's workload.
8. The Workplace and Workforce Will Continue To Change
As technology becomes more central to the work of financial teams, the skills you seek will also change.
This could be a significant change for many FP&A teams. Rather than prioritizing folks with an accounting background, consider building your team with data scientists, business analysts and similar professionals.
Key qualities include:
- Customer service
Transform Your Financial Outlook With Vena
Moving into the new year allows you to evaluate your progress toward your goals and to set new initiatives. Whether you're well into redeveloping your enterprise investments, just starting or somewhere in between, Vena can provide the FP&A solutions you need.