The future of Finance is here. Are you prepared?
If you missed NGA ANZ's Finance Breakfast last Thursday, then you missed a terrific opportunity to learn how to transform your Finance function to navigate the challenges ahead. This was all thanks to our guest, Craig Larsen, a director at Deloitte Consulting who specializes in corporate and operational strategy.
Deloitte conducts the quarterly Australian CFO Survey, which provides insights into global economic trends and the impact on Australian CFOs. Larsen said that in the short-term, at least, we’re experiencing some showers, but there are brighter days ahead. Uncertainty around federal government policies, weak commodity prices and a slowdown in the Chinese economy all impact CFO optimism, which seems to have plateaued at the moment. Continuing uncertainty is affecting CFO attitudes toward risk-taking, specifically:
- Seventy-three percent are currently unwilling to take on risk; and
- More CFOs expect to reduce gearing, or leverage, in the year ahead.
But there’s also some good news:
- More than three-quarters of CFOs surveyed expect modest growth during this challenging time, largely organically.
- Low interest rates and an improving exchange rate for Australian dollar provide some reason for optimism. Over half the CFOs surveyed expect the dollar to drop below $0.80 US yet in 2015.
The longer-range forecast is, of course, more difficult to predict; however, we can be certain that every aspect of Finance will be affected. Larsen presented a number of business predictions:
- Market volatility and competitive pressures will drive demand for greater, faster insight and value from Finance.
- Workflow, cloud- and mobile device-enabled processes will continue to be adopted and refined.
- Scenario-planning, cost modeling, and risk simulation tools are becoming must-have tools.
- Finance information models will be based on analytics requirements, including customer events and product attributes.
What does this actually mean for the future—and now? The implications for Finance and organisations overall are many and far-reaching:
- There will be increased demand—and opportunity—for business partnering.
- The demand for analytics to support decision making will continue unabated.
- Decision support will be expanded and elevated to a “Centre of Excellence” (COE), as reporting and forecasting processes are further “industrialised.”
- Forecast cycle times will continue to be compressed and will increase in frequency.
- Finance, Treasury and Risk data will be integrated into the management ledger to support regulatory and management reporting.
- The Finance environment is being transformed by changing technologies:
- Adoption of cloud-based performance management solutions is now the norm.
- We’re seeing trends in Finance structure, talent and capabilities: Shared services locations, for example, will consider access to talent and capability the top priority, rather than cost arbitrage.
- Finance will increasingly include business process consultants, business analysts and technical specialists to meet the ongoing challenges of a shifting landscape.
- Finance talent remains scarce, as the skills most needed shift to:
- Challenge and negotiation
- Being comfortable with ambiguity
- Business acumen
- Strategic thinking
- Design as core skill
The bottom line is this: The future is coming—now. Are you ready?
Stay tuned for part 2 of my Finance Breakfast Blog this week.
-- Sonya Clark