A recent study was issued as a collaboration between Oracle, the American Institute of CPAs (AICPA), and the Chartered Institute of Management Accountants (CIMA) to conduct research on how finance can navigate successfully through today’s economic uncertainty and create value in the digital age. The study “Agile Finance Revealed” looked to identify the traits of such leaders and how they created or are creating a dynamic new operating model. To create the report, a survey of senior finance professionals in major businesses across a range of sectors in the US and Canada was conducted. Larger businesses were surveyed with total revenues of over $200 million to $20 billion plus in five key industries, which included financial services, healthcare and life sciences, manufacturing, retail, and higher education. Although the entities surveyed were much larger than a typical association or nonprofit, the findings are a good road map for the future of finance functions and organizations looking to stay on the cutting edge.
CEOs increasingly expect CFOs to have a seat at the strategy table. Still only 30% of survey respondents agreed that their finance function provides the support that businesses need to become agile. Put simply successful finance functions will evolve from being an expense control, spreadsheet driven accounting and reporting center into a predictive analytics powerhouse that creates business value. The most advanced finance departments are using cloud-based applications and digital accelerators such as machine learning, artificial intelligence, and robotic process automation to ruthlessly automate transactional processes, accelerate finance modernization, and provide a high degree of scalability and agility. For example, robotic process automation lets employees configure computer software “bots” to interact with applications and perform a high volume of repetitive tasks, such as account reconciliation and other processes performed in shared service centers. Machine learning gives computers the ability to learn without being explicitly programmed and is already being used in the financial services industry to optimize business processes such as internal audit and fraud detection, based on patterns and historical trends.
With less time being spent on transactional processing, finance teams are free to spend more time on understanding how the business model generates value. For example, analyzing performance by dimensions, by product, by channel, or by segment can identify opportunities to innovate, reduce cost, or generate additional revenues. If implemented correctly, resources can be deployed to focus on areas where returns or prospects are better. The report goes on in much further detail and is instructive as to where finance departments should be headed.