How the Office of Finance Can Become a Strategic Forecaster in Professional Services Firms
The Digital Disconnect
Technology is revolutionising the finance function within many Professional Services organisations, enabling the Office of Finance team to progress from a back-office accounting role to an enabler of corporate change and opportunity. To turn data into strategic action, the chief financial officer (CFO) should help enact a culture change within the department, repositioning it to involve more future-gazing.
While that may sound like a simple task, Richard Hilton, managing director, Europe, Middle East and Africa, at Miller Heiman Group, explains the reality for CFOs in the boardroom.
“Data analysis is integral to the CFO’s role of forecasting and meeting the business’s strategic goals,” he says. “However, some have been stuck making business decisions tracking on the quarter behind.”
Mr Hilton says that while reflection on past events can be useful, techniques now enable data to be viewed as a driver for future corporate behaviour.
“We’re seeing marginal movement to this way of working, but CFOs really need to be pushing business units to collect real-time data so they have an up-to-date view of how the company is operating” he explains.
“To get them on board, they need to demonstrate the value it will deliver to them too, otherwise it’s viewed as an admin job, with CFOs consistently struggling to get accurate data; a laborious task.”
Data literacy and a thorough understanding of technology – even beyond the finance function – is becoming critical in Professional Services; just this year, Accenture agreed to acquire data consultancy firm Mudano. George Marcotte, a managing director of Accenture’s Applied Intelligence group in the UK and Ireland, made the point that, “in the UK, 87% of businesses are still struggling with how to scale artificial intelligence to deliver business value”- demonstrating that this is where the battleground will be for Professional Services over the next few years.
In addition, Bigger, Faster, Stronger – a joint CBI and Oracle report – found that many larger UK businesses are struggling to implement a digital transformation due to issues such as skills scarcity, complex legacy systems and a greater threat of cyberattacks.
This means that as the CFO role continues to evolve and organisations place an ever-greater emphasis on the insights that data and information can generate, so the skill set of the CFO needs to grow also.
Yet to enable this, organisations need to invest in empowering the CFO (and indeed, the broader C-Suite) by ensuring easy access to both the information and technology required to generate these insights.
According to the research, greater adoption of technology, alongside better management practices, has the potential to boost the UK economy by £100 billion and slash income inequality by roughly 5 per cent. However, just 54 per cent of UK companies consider disruptive technologies to have an important role within their organisation.
Curt Anderson, CFO of Icertis, explains: “The speed and scale of business is accelerating on every front. Finance is no exception; we have to keep up and even try to get ahead. New digital processes allow us to automate many time-consuming and repetitive functions, for example tracking contract expiry dates, allowing the finance department to focus on supporting and driving long-term value creation.
“Because many of the new tools are designed for the modern workforce – self-service, mobile enabled, easy to use, customisable – they are having a positive impact on the corporate culture. Employees in finance and across the company want to be able to do their jobs quickly, efficiently and with a high degree of impact, and the best tools are the ones that enable them to do this.”
Turning Today’s Data Into Tomorrow’s Strategy
Chief financial officers have greater access to data and better analysis techniques than ever before, yet, as we have seen, many have been reluctant and / or unable to embrace real-time forecasting. But this ‘digital disconnect’ needs to end if the Office of Finance is ever able to become a strategic leader and forecaster. Technology that turns today’s data into tomorrow’s strategy will be the key to success in 2020 – and beyond – giving Professional Services organisations a competitive advantage that will be hard to overtake.