Part 4 of the of the 4-part “Transformation Ahead” series
I see the future of the finance organization being changed by 10 key trends. As I wrote in my previous blogs in this series, CFOs must prepare themselves for the changes to come to ensure that finance can lead the digital transformation of the business.
Trend 8. Compliance will be a strategic differentiator
In the years since the global economic crash, CFOs have faced a deluge of new legislation and compliance mandates. This trend is likely to intensify in the coming years.
In this environment, companies with highly automated compliance capabilities will realize strategic cost and velocity advantages. For example, they can implement a comprehensive compliance and risk framework and gain a single source of truth for enterprise risk that helps keep all business units aligned on compliance.
As these control environments become more automated, they can begin to employ machine learning features that support self-learning systems. Further on, deep insight from business networks and access to third-party information will provide strategic advantage to companies by opening safe opportunities to do business with more customers and suppliers. For more on this topic, read
Trend 9. Blockchain will reduce transaction costs and increase compliance and transparency
Although it is still in the early stages of development, I expect to see blockchain mature quickly over the next three to five years. This maturation will increase transparency and accuracy in commercial activities between entities, such as business-to-business, business-to-consumer, and public/private transactions. By increasing automation, blockchain will also significantly reduce transaction costs. Read this blog by my colleague Peter David for a broader perspective.
Trend 10. Finance must offer internal users a consumer-grade experience
Business users are also consumers, and they have come to expect business applications that are as intuitive as the ones they use in their personal lives. Cloud-based applications will provide business users with consumer-grade experiences. Purchasing apps will soon enable a buying experience like Amazon, travel and expense solutions will resemble Travelocity, and budgeting tools will remind users of Mint.
Next steps in preparing for the finance organization of the future
Successful companies are preparing to reimagine their finance organizations. Following are the key steps I am seeing CFOs take to enable this change:
- Formulate your plan. Knowing your priorities and identifying your goal state are the two first steps to identifying the best early actions.
- Plan to work at two speeds. Adopt the right pace for the core and the edge of your network. The core includes your operational financial systems and ledgers. It takes longer to consolidate and replace these systems. On the edge are your customer-facing systems, such as analytical tools, travel and expense, purchasing, and the like. Expect to move more quickly on these systems, adding value and rapidly bringing innovation and efficiency to your organization.
- Carefully choose your partners. To execute these changes, you’ll need help from partners – both technology providers and business process experts. Build an ecosystem of partners that supports your priorities and your vision.
To learn more about the key trends that will shape finance organizations, read the entire “Transformation Ahead” series. For more information on how CFOs work with SAP to enable digital transformation, read about finance solutions at www.sap.com/cfo.