Increasingly, businesses are depending more on the data and insights from the finance team to make complex, time-sensitive decisions. The finance function is under tremendous pressure to spend less time crunching the numbers and more time analyzing data and producing insights as quickly as possible. As we move into the era of real-time data and digitalization, is the traditional finance function in danger of dying?
This is exactly what a panel of experts tackled in the Nov. 18 episode of Coffee Break with Game-Changers, a program presented by SAP on The Voice America Business Channel. The experts agree that there’s still a chance for the finance function to survive, and even thrive, but only if CFOs are willing to look up and out at the digital world – and rock the boat.
“Finance 2020 – Life or Death by Digital” was moderated Bonnie D. Graham, with guests David Axson, managing director, Accenture Strategy; Bob Parker, vice president, IDC Research; and Birgit Starmanns, senior director for Product Marketing, SAP. The following is an excerpt.
Bonnie: Some analysts are saying that digital will kill finance. Is this a good thing or a bad thing?
David: Well, frankly for the last 30 or 40 years we’ve probably been pushing the boat in the wrong direction, increasing complexity, and lengthening our cycle times.
I think that finance really has to step up and become the “Rosetta Stone” of the business. Finance has to translate a very complex world into context, with insight that allows business leaders to make fast and more competent business decisions. The good news is we’re seeing digital technologies that can really turbocharge this transformation and allow us to liberate the finance professional from the tyranny of the spreadsheet.
Bonnie: Obviously you heard me say “ugh” when you got to the words “spreadsheet,” so I certainly agree. In your view, how many finance organizations are still looking down at spreadsheets instead of up at the digital world?
David: Current benchmarks still show that the average finance professional spends 60% to 70% of their work week getting ready to switch their brain off. By this I mean collecting and organizing data, consolidating multiple spreadsheets, and then making sure that the data is correct. Finally, maybe around Thursday morning, they switch their brain on and say “what does this mean for our business?” Frankly, this is just unacceptable. Business leaders are looking for real-time insight tied to the real-time flow of the business.
Bonnie: Your thoughts on this, Bob?
Bob: I agree. Also, if I may add, if you are rowing the spreadsheet boat, chances are you don’t have time to stand up and look at how your role has to change. I really think that we need to encourage folks to start to take advantage of digital and rock the finance boat in their organization. Reorient the role to something more productive.
Also, to your point about complexity, David, I think that there’s a difference between complexity and complication. With digital we have brand-new business models that are quite complex, and that’s okay because business IS complex. Complications, on the other hand, are things that we can simplify to make operations more efficient. What we need to do is attack the complication and simplify so that we can embrace the complexity of the new world and be successful.
Bonnie: Great to get your take, Bob. Now that we’re talking about transforming for survival, I’d like to get Birgit’s take on what it takes for the finance function to start this change.
Birgit: Thanks, Bonnie. I think transformation is taking a break from what you have done in the past, creatively thinking about new ways to do things. If you don’t think out of the box, you are just going to be automating what you’re doing today, and that’s not going to be beneficial in transforming your finance organization. Finance needs to be more at the forefront of advising the business and not just reporting after the fact. If finance doesn’t transform their business, they won’t be able to do that. So it’s really important not to just reinvent what you have today, but to come up with new and innovative ways to do things and put them into practice. Creativity is thinking about new things, and innovation is about implementing new things.
This excerpt from “Coffee Break with Game-Changers: Finance 2020 – Life or Death by Digital” Nov. 18, 2105 on the Voice America talk radio network was adapted for the Digitalist Magazine. It is available on demand. Upcoming topics in this series:
- What are the new demands on finance given the changes of the past six or seven years?
- What will the CFO’s job description be in 2020?
- What is the impact of hyperconnectivity?
- What’s really going to happen in the next four to five years?
To learn more about how finance executives can empower themselves with the right tools and play a vital role in business innovation and value chain, review the finance content hub, which offers additional research and valuable insights.