Key Points
  • Agility will be imperative for finance functions to navigate the changes driven by digital transformation

  • A master data management strategy coupled with process standardization and centralization will be essential for finance teams

  • Technologies such as blockchain, artificial intelligence and robotics will accelerate the need for deeper change

In a world where there is no such thing as ‘business as usual,’ all functions in corporations are on a transformational journey. For some it’s re-alignment, for others it’s redefining their very existence and the role they will play in the future.

The finance function, arguably at the sharpest end of this transformation, is dealing with its own internal and external changes. This was the central theme of discussion at a special roundtable organized by WNS and CorporateLeaders at the Savoy Hotel in London, U.K. The delegates, an exclusive group of business leaders, exchanged ideas about the future of the finance function, and how it should respond to technological disruptions.

Agility to Tide Over Change

Talk to any finance professional today and it will be hardpressed to not talk about technology. Digital transformation is prevalent everywhere, from homes to cars to fridges. But, according to Krishnan Raghunathan, WNS’ Chief Capability Officer, this means the key question for all Chief Financial Officers (CFOs) is this: as business is impacted by technology, how is the role of finance affected?

While change brings huge challenges, it could yield benefits too. “Increased regulations and online payments change the nature and exposure to risks that companies have. But the opportunity this presents is the extent to which the finance function can convert data into insights ,” Raghunathan said.

“Be it systems or standards, one thing is certain: finance is now all about responding to changes as they come”

- Krishnan Raghunathan, Chief Capability Officer, WNS

“I’m not sure the issue of how finance can be more agile is getting the discussion it deserves and needs now,” Raghunathan told the delegates. “Will agility happen by default or design? This is one of the most interesting questions out of the many hundreds that CFOs will arguably need to answer. We believe this roundtable meeting is a starting point to at least start debating these important issues.”

Financial Data Management and Consolidation

Of the three key areas that were discussed, it was the issue of financial data management that was hotly debated. Claudio Altini, U.K. Head, GBS Advisory at KPMG, and moderator of the roundtable discussion, shared findings from a recent KMPG survey. Results from the survey shows that 57 percent of Chief Executive Officers (CEOs) think their business lacks the skills to respond to disruption, while 61 percent worry about the integration of cognitive processes with Artificial Intelligence (AI).

The CFOs present concurred that poor management protocols and defining who has access to data was the primary cause of data management issues. They also have to deal with issues of standardization, compliance, data protection, and as one finance director present said, ‘different versions of the truth.’

The debate soon moved on to where CFOs should add the most value. Notably, how the one percent of data that was most important to the organization could be identified. And furthermore, how to keep identifying it (and make decisions based on it) as the one per cent keeps changing.

The delegates also defined what agility meant to them. Having a master data management strategy was one line of thought. This essentially meant separating operational and financial data, and identifying what could be shared. This prompted discussions around how to get data to stakeholders so that they could make the right decisions.

Raghunathan suggested a multi-layered data approach. Research teams should first identify the data that needs exploiting and then ask the data team to turn them into insights. Productization and virtualization will happen after that. This model, he pointed out, had the ability to respond to change.

Process Standardization and Centralization

This led to discussion around data standardization. The delegates acknowledged the importance of data standardization in a continually dynamic business environment. The group agreed that it was best to hope for 90 percent standardization and live with the fact there will always be 10 percent variation, especially if it’s in non-business critical areas. However, one delegate did point out that CFOs do have the responsibility to challenge the reasons given by companies for this variation.

Most agreed that despite ERP systems having questionable return on investment, they do at least drive standardization. One delegate said: “You still need to tell the ERP what to do. It’s only the enabler, not the solution.”

The debate was most vocal around whether data should exist in the cloud or not. Most agreed the uptake was either slow or barely on some companies’ agendas. The suggestion, however, was that a ‘tipping point’ could now happen, unleashing a spike in demand.

This led to the importance of trusting Business Process Management (BPM) providers and understanding the concept of data on cloud. Some delegates felt that CFOs could be forced down this route mainly because technical support for older ERP systems will soon be removed and leave them with no other choice.

Adapting to Evolving and New Technologies

Is the finance roadmap paved with technology and what was once described as ‘extreme automation’? This was the final strand of the roundtable debate. Everything from blockchain to robotics to automation and machine-learning were highlighted as technologies CFOs should adopt to safeguard the future of their organizations.

But while increasing technological improvements wasn’t in doubt, the roundtable was divided over the extent to which technology was appropriate at present. One leader argued that there’s still plenty of room to use existing technology.

“We took 10 business problems we needed to solve and asked our team if they could deploy Robotic Process Automation (RPA). We found that the tech we already had was perfectly adequate,” he said. “We were able to solve six of the 10 problems by ourselves quickly and without increased costs.”

Some delegates believed that there was more hype around RPA than it really deserves. The question came up whether a company like WNS would ever advise clients to buy less of something? To this, Raghunathan responded: “Our mission is to bring down the overall cost of the finance function. We’d be honest about what a client needs because ultimately business is about strengthening relationships. Maybe BPM providers will need to add value in a different way.”

Conclusion

Will technology precipitate the need for greater, faster and deeper change? The answer, undoubtedly, is yes. The unanimous verdict at the table was that those who don’t change will get left behind. What is certain is that BPM will play its part, proving the technological case for improved standards and processes that will streamline the function further.

Though the challenge around data management and adoption of new technologies remains, the finance function is uniquely positioned to take this on. So, while the future looks uncertain for organizations, enlightened CFOs can steer the ship and make the finance function add more value.

Speakers

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