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Accounting

Reshaping Your Finance and Accounting Team


by Katie Stein

Here’s how finance can thrive by embracing new responsibilities and talent.

© MIND_AND_I/iStock/Getty Images Plus

With business priorities evolving and technology enabling huge leaps for finance and accounting (F&A) teams, finance professionals find that their roles are changing too.

Businesses want F&A to do more than find opportunities to reduce costs, close the books on time, and stay compliant. Genpact’s recent study of more than 500 senior finance executives  finds that in the next two years, the top expectations for finance will be to enhance the user experience for customers, employees, and suppliers, and generate actionable insights for the wider business.

As technology takes on transactional activities, such as invoice processing or reconciliations, CFOs are now focusing their teams on high-value-adding tasks, supporting the business with predictive insights that enable strategic decision making and championing transformation across the business as a whole.

Rethinking finance’s responsibilities

Leading finance teams are playing more transformative roles for their businesses. We explore eight of these evolving responsibilities:

1. Enhancing experiences

Finance teams can have a positive impact on the user experience for customers, employees, and suppliers. Connecting the business across the back, middle, and front office will ensure seamless experiences for end customers and internal users.

Finance teams also can integrate experience data, such as negative employee experience due to large rework, into performance measurements. Operational data is not the only data point that gives end-to-end visibility into how the business is doing. Combining it with experience data helps decide the right strategy.

Opportunities for business impact are endless for forward-looking finance organizations that can align operations across their enterprise. Yet, challenges remain. While our research found that most respondents believe they are somewhat improving customer and user experiences, only 1% say they are significantly meeting this expectation.

2. Championing digital transformation

Finance teams are increasingly expected to guide digital transformation efforts by, for example, evaluating the return on investment for digital investments, developing rollout strategies, and driving technology adoption.

To do so, CFOs must first build a digital finance organization and boost overall finance effectiveness. But our research shows that most finance functions have only deployed automation, analytics, and artificial intelligence (AI) technologies to a limited extent. Just 13% are using them to transform many business processes.

Finance organizations are urgently ramping up their technical and data science skills and business domain knowledge to lead digitalization, mine data for strategic insights, and help the business perform better.

3. Closing books on demand

With digital technologies, finance teams can access real-time data to accurately close the books at any point in time. By realizing the goal of an on-demand close, teams are free to focus on more strategic tasks, such as generating predictive insights that support enterprise decision making. But, only 12% of our respondents say they have improved the financial close and reporting process with digital technologies.

4. Curating data for foresight

Given finance’s data capabilities and understanding of the wider business, finance is in the right place to house and analyze data and turn it into valuable insights. Yet, less than half (49%) of respondents believe finance should be the company’s enterprise data guardian – this number should be higher, especially since only 7% strongly agree this is their role.

Understanding what insights and analytics companies most need, and combining datasets are the greatest challenges to providing the business with strategic intelligence, say the senior finance executives in our study. A lack of data and technology skills, poor-quality data, extracting data from legacy systems, and managing unstructured data are other barriers holding them back.

Finance professionals need to educate stakeholders about the kinds of data and how they interpret data relationships and make the business case for investing in analytics capabilities.  

5. Prescribing business actions

Today, most of the analytics-driven insight from finance is either descriptive or diagnostic, for example, identifying what caused a 5% drop in sales. To provide greater business intelligence, finance teams need to provide both:

  • Predictive insights, for example, predicting that domestic demand for goods will increase by 5% due to changes in government policy, and
  • Prescriptive insights, providing advice based on predictions, for example, launch a new marketing initiative to meet the expected increase in demand from government policy changes.

While it is clear that the future of finance will drive more and more business impact, many organizations still need greater transformation of their operations to take best advantage of digital technologies and advanced analytics. Our research shows that 58% of respondents say their finance organization only somewhat meets business expectations to generating actionable insights from company data, and no one states that their function can do so significantly. Moreover, none of the executives surveyed say they have a structured way to generate predictive insights to meet businesses’ changing and varied demands.

Finance teams need to connect and orchestrate all sources of data to get a holistic picture of business performance, opportunities, and risk. That is, they have to make sense of the huge amounts of data in a context to determine the best actions across functions, and at all levels of the business. Taking analytics to the next level requires robust data and computing skills.

6. Eliminating AI bias

When organizations use AI in to enhance processes such as forecasting speed and accuracy, weeding out bias is critical. For example, some F&A teams use AI-enabled technologies and historical data to make decisions on customer credit or payment terms. Biases in these systems may lead to certain customers being unjustly offered inferior options.

And, as AI solutions become integral to finance, controlling bias in the data and algorithms, establishing trust, and overcoming skepticism will be new responsibilities for finance. But our study shows that only 30% of senior executives are confident about their function's ability to combat AI bias.

7. Creating dynamic controls

The controllership team, tasked with maintaining integrity in organizations, has been getting a digital facelift. New technologies, such as cloud computing, robotic process automation, analytics, AI, IoT, and blockchain will pose new risks. This means a new set of prevention and control methods; for example, data protection regulations for cyber risks, edge security for hacking, and deciding the tradeoff between explainability and accuracy for black-box models in AI.

As the control environment changes, finance teams will need to use continuous risk monitoring, action-based controls, dynamic control hierarchies, and cognitive control ecosystems to strengthen governance, risk management, and compliance.

8. Building a digital-savvy risk workforce

All organizations must comply with new accounting standards (such as, IFRS16 or ASC842), changing tax regimes, new regulatory reporting requirements (such as, GDPR), and others related to cybersecurity, bribery, corruption, or money laundering. And as regulations change and governments introduce new legislation, the cost of compliance increases too.

To provide faster, more forward-looking, and deeper insights, risk and compliance functions are integrating more data usage and technologies into processes, reporting, and oversight. They will need to recruit, retain, and engage a team with the right profiles – risk management expertise, business experience, and digital literacy.

Achieving the right balance

As finance teams consider these responsibilities, they must also assess whether they have the right talent to perform them effectively.

Our research shows that nine out of ten finance leaders agree they need to bring in non-traditional F&A skills. They say knowledge of advanced digital technologies and data science skills are the capabilities they most urgently seek. But business acumen, change management, negotiation, and leadership skills are not far behind, and are important to scale up technology adoption and get data insights. And collaboration skills are important to shape working relationships with internal and external partners.

Building a ‘bilingual’ workforce – one where people have both traditional F&A and industry knowledge alongside data and digital expertise – is key. Finance executives say they struggle to compete with tech giants to attract data analytics and digital talent. Finance functions need to find ways to attract the right people to these roles and their companies while also upskilling their existing teams. Many finance functions are already engaging specialist consultants, tapping into the gig economy on a short-term basis, and rethinking how teams are incentivized and appraised to attract new skills.

These eight roles may seem like a lot of added weight for finance teams to shoulder. But with digital advances, and a new mix of skills and responsibilities, finance functions will reveal their ability to enhance experiences, provide strategic insights, and bring transformation to the whole enterprise. A true partner to the business.

 

Katie Stein is chief strategy officer and global business leader, Enterprise Services at Genpact.