What To Expect As A CFO In 2017

Jeff Thomson

In 2016 we saw a variety of trends manifest in the finance function. From the emergence of the cloud and the increased use of Big Data to the pervasiveness of the skills gap, it’s been a year of growth, change, and challenges. With 2017 around the corner, finance professionals are turning their attention towards what’s to come, and according to Thack Brown, global head of Line of Business Finance at SAP, there will be a slew of political, economic, and societal factors to account for in the New Year. I spoke with Thack this month to discuss how to navigate economic volatility, what trends he’s anticipating, and why technology will continue to be a crucial game changer in finance.

This interview has been edited and condensed.

Jeff Thomson: As 2016 comes to a close, what three trends do you think finance professionals should anticipate in the New Year?

Thack Brown: In 2017, I’d expect the following:

  • Finance executives will focus more on optimizing business performance and strategic activities and spend less time on compliance and basic administrative tasks. As enterprises continue to become more digital, finance will become increasingly dependent on automation and analytics to deliver real-time, clear, actionable, and forward-looking insights.
  • Finance teams will tailor their departments to best find and retain millennial talent. As millennials’ priorities around where they want to work differs more than the generation before them, finance departments will continue to adapt. This includes implementing up-to-date technology, developing modern policies around work-life balance, and integrating community efforts into job descriptions. The rapid evolution of technology can mean that skills quickly become outdated. Having grown up with digital disruption, millennial workers have a better understanding of the new business landscape. The result is that finance functions are having to hire a younger group of workers.
  • Artificial intelligence will begin to transform the finance function. The limits of the 20th-century finance systems have gone and in-memory computing allows for on-the-fly analysis, dynamic planning, and simulation. Artificial intelligence will help finance professionals go beyond this by simplifying the complexity of business processes and translating information into actionable business guidance with the evidence to prove it – instantly.

Thomson: You recently wrote on economic volatility and how companies can best navigate the uncertainty involved. In the coming year, many are predicting continued instability and volatility. What can finance teams do to overcome anxiety surrounding economic uncertainty?

Brown: With unexpected market risks arising every day, CFOs need to be able to evaluate and prepare for the impact political, economic and societal events may have on their organization. With that in mind, finance teams need to make predictive algorithms and tools a top priority and take on a more strategic role in planning. Teams should also be nimble in allocating resources across the organization, doing so ahead of time, and leveraging foresight.

Using ad hoc decision support and analysis, finance teams can assess economic risk and implement the best processes and tools needed to simulate mitigation. The right tools can give finance departments information in real-time, eliminating confusion, delays, and inefficiencies. This enables finance departments to act more proactively and combined with other technologies – such as in-memory computing and robotics – this capability allows the automation of core processes, and allows the finance department to advise on business strategy.

Thomson: You talk often about the insurmountable amount of data now at finance professionals’ fingertips. What are the pros and cons to having access to this much data? Is it too much data to manage or do you think professionals can learn to harness it in 2017?

Brown: Advancements in technology allow finance executives to increasingly be seen as strategic business partners by minimizing the effort spent on transactional tasks and information gathering, and maximizing the effort dedicated to providing strategic insights. Technology morphs from a barrier to an enabler of optimal business processes. With access into each function of a business, the finance department is able to not only maintain financial stability but to also help guide investment, review operational and business performance, and migrate risk. This expands the role of the finance executive exponentially, and provides the C-suite real-time access into the state and future of an organization.

While having data at finance professionals’ fingertips provides numerous opportunities, it also brings with it a skills gap. New technologies such as Big Data analytics are leading to the creation of new business models and processes. This has led to a period of rapid learning for CFOs, as they seek to understand the changing role of finance and its contribution to the organization in this now digital landscape. A disadvantage is that this evolution has brought with it a skills gap. CFOs are tasked with expanding the range of skills within the finance function to harness the possibilities of new technology and new ways of thinking. The core skills of financial accounting remain critical, but now these are being supplemented by new disciplines as the function looks to deliver new services beyond its traditional domain. Additionally, traditional organizations find themselves in competition from startup businesses that also demand these skills, which is further diluting the talent pool while pushing up costs.

Thomson: We are expecting to see a continued focus on accounting technology in the next year. What are the benefits of implementing financial management software in the workplace? Does it free up a financial professional’s ability to be more strategic in their oversight?

Brown: A decade ago, IT systems were built to oversee a company’s finances and report on historical data. With a lack of digital and real-time process enabling infrastructure, accountants’ and finance professionals’ time was devoted to data movements and manual reconciliation. Today, finance executives are using technology to go beyond the month-end close process and the annual budgeting cycle to both effectively manage an organization’s day-to-day and provide forward-looking insights. By providing financial experts with the proper foundation for data migration, costs, risks, and time consumption, finance is able to act as business partner. Advancements in technology widens the breadth of data insights available and enables management to deliver clear and actionable insights to company decision makers faster than ever. The time once spent balancing books is now spent interpreting and proving valuable insights.

Thomson: Around the New Year, we often think of the old adage, “out with the old, in with the new.” What aspect of the finance role do you feel is most outdated, and what functions do you think would best serve from an upgrade?

Brown: One is the annual budget cycle. Finance executives no longer believe in it anymore and no longer believe that the annual budget cycle serves as a viable guide for the year. Budgets are completely outdated within four months of being made official, yet we insist on this process year after year, rather than moving to a more dynamic planning methodology. Because finance plays a key role in accelerating the planning process within an organization, planning will continue to become a normal daily activity to dynamically adjust to market conditions and performance.

The second is shared services. This is a legacy structure from before automation existed. Organizations should be actively seeking to dramatically reduce redundancies related to shared services and drive major automation in this area. This will drive cost reduction and be a major accelerator for a business.

For more insight on how technology and the role of the CFO in 2017, see Prioritizing The CFO’s To-Do List In 2017.

This article originally appeared on Forbes.com. It is republished by permission.


About Jeff Thomson

Jeff Thomson is president and CEO of IMA (Institute of Management Accountants). Prior to joining IMA, he was the CFO for business sales at AT&T. During his tenure at IMA, he has spoken on accounting regulatory issues, providing testimony to the U.S. Congress on internal controls and risk management as it relates to Sarbanes-Oxley implementation, appearing before the SEC and PCAOB on critical regulatory matters impacting U.S. global competitiveness, He served as a member of the COSO (Committee of Sponsoring Organizations) board of directors, which delivers global guidance on internal controls and enterprise risk management. He has authored numerous trade articles on accounting issues and recently contributed a chapter on ethical leadership to “Trust Inc.: Strategies for Building Your Company's Most Valuable Asset,” entitled Trust: The Uncommon Denominator in an Uncommon Business World.