There’s a big gap between what finance executives say they expect digitization will mean to their companies in general, and their finance functions specifically, and what they’re planning to do to prepare their talent for the coming digital transformation.
Few question that digitization will dramatically change the way finance will deliver services to its internal stakeholder. New technologies, the transition to the cloud, robotics, artificial intelligence, and access to big data and predictive analytics will disrupt the old model. Transactional processing and standard reports will be automated. Talent will be redeployed to higher-value tasks. Finance will have to seriously upgrade its tech-savviness, including its familiarity with data management and discovery tools and database platforms.
Even though finance professionals may collaborate with data scientists – not become ones – to be successful, they’ll need to know what kind of questions they can ask of the data. This is what digitization and big data analytics are all about: It’s not about fancy technologies. It’s about asking questions you couldn’t ask before to help provide the business with better insight so they can make smarter decisions.
With so much on the line, you’d think finance would put talent management atop its agenda for next year. In fact, finance executive did rank talent as a big priority for 2017 in The Hackett Group’s 2017 Key Issues Survey. But two worrisome trends emerged:
- A large share of companies said they don’t have the capability to raise their talent profile.
- Even more counterintuitive, most companies assigned only moderate importance to initiatives related to talent like training and developing new competencies.
Why are executives who believe digitization will have a profound impact on their companies’ performance in general, and on their function specifically, not planning to take significant steps to upgrade their staff’s competencies? Here are a couple of possible explanations:
- Lack of urgency. One reason may be that senior executives believe this will be a big issue, but just not right away, so they’re not taking any significant steps next year. That would be a mistake. In the digital world, the velocity of change is much higher than ever before. Take robotics. Right now only a small share of organizations deploy it in finance. But that share is expected to double in two to three years. This adoption rate will dramatically alter the finance landscape.
- Lack of resources. Investment in talent doesn’t have an easy-to-measure or immediate ROI. At a time when CFOs are cutting finance staff and operating budgets, they must prioritize how they allocate hard cash. Their tendency is to spend on projects with hard returns. This again is shortsighted. When the day comes, and it’s coming soon, they won’t have the necessary competencies in place to provide the business with sharper insights through advanced analytics or work hand in hand with business partners to solve critical business problems.
For digitally minded CFOs, this presents a unique opportunity to catapult past the competition. The investment in new technologies is only part of the path toward digital transformation. Without the commensurate investment in people’s ability to leverage it by applying more advanced analytics, asking the right business questions, collaborating with the business and transcending finance’s day-to-day operations, the technology won’t transform the way finance delivers value to its stakeholders.
For more insight on digital transformation, read 2017: The Year Businesses Will Learn The True Meaning Of Digital Transformation.