Digital in finance: eight predictions

What does the future hold for CFOs as finance teams experiment with new technologies?

Ghamazy Rashid, accounting operations advisory leader, and Ng Peng Fei and Kaitlyn Ong, accounting operations advisory directors, at Deloitte Singapore

When we look at where things stand today, the pressure on finance teams to do more with less is getting more pronounced. The good news is that the technologies needed to reimagine finance are already here and will only get better. A number of finance teams from leading organisations are using pilots to experiment with new technologies, but we are not yet seeing evidence of widespread scalable, transformational change.

Over the next five years, the same technologies already driving the top line and transforming other business functions – for example, robotic process automation (RPA), blockchain, artificial intelligence (AI) and smart machines – will continue to reach finance, with a promise to make things better, faster and probably less expensive. In today’s climate where business needs are growing and the pace of innovation accelerating, CFOs should plan for change – or else, plan to retire.

With business needs growing and the pace of innovation accelerating, CFOs should plan for change – or else, plan to retire

Looking into the future, predictions can be made by asking (and answering) these questions:

  • What would be possible if we combined different technologies to reimagine the future?
  • How would the work of finance get done, and who would do it?
  • How could finance contribute even more to the success of the organisation?

Lifting the burden

The first prediction is the rise of the finance factory, where transactions will be touchless as automation reaches deeper into finance operations. The key is to adopt technology that improves visibility, governance and efficiency. If done right, this will eliminate traditional arduous processes, such as operational finance.

Second, self-service will become the norm – something finance teams will be uneasy about. Data will be at the fingertips of decision-makers, enabling the business to make real-time decisions on the basis of market and operational intelligence coming in via connected processes. Finance is no longer required to act as an intermediary for information needs such as budget queries and report production.

Next, we can expect finance cycles to go real-time. The work around batch processing, quarterly/monthly forecasting and periodic reporting (except for statutory purposes) may diminish significantly and eventually completely disappear.

Finance professionals will find themselves freed up to harness real-time metrics and data analysis to close the gaps between expectation and performance

Traditional enterprise resource planning (ERP) will be challenged by new players with specialised finance applications and microservices that sit on top of – and integrate with – ERP platforms. Organisations will very likely shift to cloud-based ERP to help ensure that finance is constantly updated on the latest release.

In terms of data, the proliferation of application programming interfaces (APIs) will drive data standardisation. However, it will not be enough – organisations will still be struggling to clean up their data. While automation and cognitive technology will make it easier to get the work done, it will still be hard and tedious. What is important is for finance, and indeed the organisation, to properly analyse its data and invest in data management so that quality data can be easily used to make critical business decisions.

Where operating models are concerned, new service delivery models will come from a combination of robots, algorithms and a more diverse finance workforce – freelancers, gig workers and crowds. We will also see organisations assessing the benefits of automation in relation to onshore and offshore operations.

Another prediction that is already becoming reality is the new workforce and workplace. Employees will be doing new things in new ways, and the skills needed for finance in the future will be markedly different from the traditional skills today. CFOs will need to make investments to ensure they have the right finance talent, placing a premium on those who understand both technology and the business. The identification of strong leaders will also be crucial to lead and navigate finance through the transition.

Reinventing finance

The final prediction, in a culmination of the seven made above, is that the role of finance will change. Finance will drive the change and reinvent itself; it will be the key designer and owner of the new normal, and expand its reach into the business in doing so. If all the predictions come true, finance professionals will find themselves freed up to harness real-time metrics, shifting from the preparation of data to the analysis of data to find out what it tells them about the business, and how to close the gaps between expectation and performance. Finance will also be driving comprehensive supplier management and spend compliance across different spend types and channels – a trend that has accelerated due to Covid-19 as the profile of spend has changed.

While some of these predictions may not come to fruition in a five-year time frame, it is certain that the automation and digital trends will continue to accelerate and expand, and the benefits are simply too large to ignore. A clear vision and strategy for finance is needed in the digital world, and now is the time for CFOs to ensure that their roadmap to the future is clear.