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The pace of technology-enabled change is rapidly increasing across the Finance landscape. The focus on Finance transformation is everywhere, and for good reason. Implementing technical change often involves the adoption of new tools or technologies, as well as subject matter experts to help redesign and transform existing processes. Once large transformational initiatives are complete it is up to the workforce who support those processes to adopt, adapt, and continuously improve. As such, the finance workforce is critical to whether organizations can effectively embrace such change and accelerate the use of new and emerging technologies, however data shows that there is a significant talent gap between traditional finance and the finance function of the future. Closing that gap is not easy, is not a one-size-fits-all, and is not something that will happen overnight. It is however, vitally important as we continue to evolve into a more digital world.
Based on a 2019 Gartner survey of over 150 Finance leaders, they concluded that over two-thirds of leaders felt that they did not have talent with the overall mixture of data, technology-based and social-creative competencies. That data, combined with an 87% response rate of whether digital competencies are more important than traditional finance competencies in today’s environment outlines a concerning scenario. Furthermore, 73% of CEOs agree that AI and robotics alone will create more jobs in the future than they will eliminate. This type of digital disruption and acceleration will require that the employees in these functions have a strong understanding of how to harness the power of data and its ability to drive insights through analytics. They will also need a more comprehensive understanding of the underlying technologies available to improve the finance function and how to integrate them at the strategic planning level down to the everyday activity interaction. As such, most finance employees will need to expand their skill set as transformation impacts their day to day work.
So how should organizations approach closing the talent gap and what are some best practices? As stated earlier, there is no one-size-fits-all solution, and approaches that focus solely on hiring to improve digital competency or focusing only on training for existing associates often fall short. The reasons for this often come back to the work. Not until leaders focus on the work in both the current state and target state (inclusive of new technology), can they effectively design the workforce of the future by aligning the type of worker (or role), with the necessary competencies needed to perform that role. By defining the competencies needed through an understanding of the work it is easier to determine where to focus with existing talent, and where gaps exist that may require hiring to fill.
This article will not go into detail on finance redesign recommendations but it is safe to say that a strategy around transforming the work will need to be established before considering how to redesign and align the supporting workforce. Once the future state of the work is well understood and the corresponding roles needed to support that work are outlined, the focus can shift to bridging the competency gap that will most likely appear in every finance role to some extent. This starts with understanding and clearly outlining the job responsibilities and the changes that result from the integration of new tools or technologies. This allows a more focused approach on where gaps exist and what actions are needed to close them. The need for finance to accelerate into the digital world is ever more important given the increasing reliance on the CFO and the finance function to be thought leaders in transformation and a strategic partner between the CEO and the CTO. 2020 and the COVID-19 pandemic have created more emphasis on the need for technology to reduce unnecessary manual work. The focus on automation within the finance function is expected to increase each year and CFO’s will play an even more integral role in leading by example across organization. To do that effectively they need to ensure that part of that strategy includes a focus on the talent.
Up-knowledge vs. Up-skill: In order for employees to embrace technology and build their digital competencies they need to first understand the concepts, use, and applicability of the tools and technologies leaders want to integrate. Understanding what these technologies are, how they can enable finance transformation, and why the employee is critical to the success is key to adoption. Eliminating the fear of technology-driven change and approaching it as a developmental opportunity for the Finance workforce will help gain the necessary buy-in at all levels. This should be part of the overall vision which is clearly communicated from the top and embraced across all levels of the Finance function, allowing leaders to champion and lead the charge for employees to see, understand and therefore want to be part of the future. Once the vision is understood and the parallel is made between the change in the work and how that impacts the type of role needed there are several ways to then address key competency gaps and focus on the necessary skillset evolution. Examples of key technologies that finance leaders and employees should be familiar with include robotic process automation (RPA), enhanced data analytics and visualization solutions, as well as tools to promote process collaboration and automation through the use of artificial intelligence (AI) and machine learning (ML).
Some upskilling best practice examples include multi-pronged learning paths, where a mixture of self-paced, on demand learning materials is made available, as well as instructor-led hands on focus to improve digital literacy. A model where employees can gain recognition of achievements through gamification and internal competition (the carrot) in addition to where leadership goals and objectives are shared and communicated through competency requirements (the stick) is an effective way to not only motivate but to encourage employees to embrace their own digital transformation. These paths can be customized to the organization and overall vision and objectives as well so that the focus can be as targeted or broad as needed. Early engagement with internal learning and development (L&D) can save time and effort in the long run by utilizing existing frameworks and strategies to engage associates, while potentially only needed to create or refine content applicable to the function.
Our current pace of change, coupled with unpredictable events such as the COVID-19 pandemic and the integration of the virtual work environment are driving the increasing need to ensure that the finance workforce is adequately prepared and skilled to thrive in a digital and transformational world. According to a recently published McKinsey & Company survey, “greater technology adoption in finance could drive lasting effects on a company’s overall resilience”. Companies who considered themselves considerably more prepared for future crises based on their response to the COVID-19 pandemic also reported greater use of digital and automation technologies within the finance function. That said, integrating technology to improve processes and reduce cost and risk associated with outdated, manual processes only works if the people who perform those processes are equipped to support them in the target state. Several approaches to doing so successfully have been shared in this article, but it is important to step back and review your individual strategic objectives and apply the right approach (or mixture) to ensure the highest probability for successful adoption and continuous evolution of not just the process through technology but the people.
This article was authored by FEI's Committee on Finance & IT (CFIT) Emerging Technologies Subcommittee.