Accenture: The Finance Department as We Know it is Dead

Writing in CFO Magazine, David Axson, Managing Director of  Accenture’s Strategy, CFO & Enterprise Value practice tells us that the finance organization of the future will be nothing like that of  today:

Finance 2020 — tomorrow’s digital finance organization — is a radical departure from the status quo. It deals in analytics and forward-looking decisions to create value and manage risk. It shifts traditional accounting and processing to cross-functional, integrated business services models that use robotic process automation. It trades reporting the past for predicting the future.

Finance teams in general, and CFOs in particular have had the goal of transforming themselves, becoming more value add and analytical for a long time.  We believe that finance organizations have a huge potential to add analysis, planning and vision for the enterprise, and that this  transformation of finance organizations will be crucial if the enterprise will thrive in the future.

However, color us skeptical that the road to this future state will be a straight line or easy.  Axson tells us to

Say goodbye to today’s process-focused finance model. Digital technologies are blowing it up. Traditional finance components — transaction processing; control and risk management; and reporting, analytics, and forecasting — are getting reconfigured.

 

We absolutely agree with the goal of refocusing the finance department to be a strategic contributor to the enterprise.  The question is how to get there.

The drive to automate financial functions is certainly nothing new. Transaction processing systems were first introduced in the 50s, and since then have consistently grown more faster and more capable.   Yet somehow the promise of fully automated reporting remains elusive.

In our experience, the issues arise almost exclusively in the spaces between systems.  If you think of your systems as “tiles”  the interfaces between the systems is the grout.  It is in this space that professional judgment and manual intervention is necessary, and will probably continue to be necessary for the foreseeable future.

In order to free the finance department to fully meet its potential, and to gain a seat at the strategic table, finance will have to become far more efficient at the “grout” functions.  That means that they will need to instill cultures  of continuous improvement.  Looking forward we see see change continuing, and probably accelerating.  Business conditions, reporting and auditing standards, and internal business structures will constantly evolve.  The finance department of the future, whatever form it takes will need to be agile and responsive if the enterprise is to thrive.

Communication, education, and continuous improvement will be vital to the finance department of 2020