Finance in 2030… my thoughts on what the future holds.

Its the time of year to look ahead to the future.  I’m putting it out there…  the finance function of 2030 will look very different from the finance function of 2015. Here are my predictions:

REAL TIME INSIGHT A REALITY

  • Real time info and insight will be king.  Quarterly closes will remain, but on a daily basis a soft close will take place. Most CFOs will demand and have a real-time ‘flash’ overview of their p&l, balance sheet and cashflow delivered to their mobile devices.  This capability already exists, but software vendors and corporates will have effectively reengineered their architecture to take advantage of cloud and in-memory processing as well as automating the many reconciliations and sub-processes, enable scenario and close simulation at any point.
  • The annual budget cycle will be ‘so 2015’Instead, in 2030, almost every business will have a rolling forecast process with an outlook of 18 months that at pre-defined dates a snapshot is uploaded as the budget.  Significantly more time will be spent on scenario analysis, risk adjusted forecasting than in compiling the underlying data.

INDUSTRIALISED FINANCE SERVICES

  • Finance will do more, with less head count than ever before.  Automation, artificial intelligence, standardisation of processes and systems and robotic process automation will drive efficiency and economies of scale.  As a result world class finance functions will cost less than 0.5% of annual revenue.
  • Each finance function will have a highly industrialised finance factory or next generation shared service capability.  Transactional processing will be largely automatic.  Automation of FX allocation, consolidation and intercompany and reconciliations will take away a lot of traditional operational activity.  Those finance personnel in shared services will be largely be overseeing systems that perform intelligent process monitoring, being able to jump rapidly onto a limited number of exceptions.  Paper will not be required within the finance function.
  • Finance shared services will become part of many organisations Global Business Services team, and will take advance of improvements in communication technology and virtual hubs to enable ‘follow the sun’ processing from networks of offshored teams and centres (whether captive or outsourced).
  • Core finance processes will have intelligent process management and policy breach detection software running 24×7 to reduce the risk of fraud or non compliant activity.  Artificial intelligence will make internal and external auditors lives a lot easier!

SIMPLIFIED, MOBILE TECHNOLOGY

  • This may seem far fetched but I don’t believe Microsoft Excel will be the prominent tool of choise for finance staff… organisations will use other technology tools for data analysis, simulation and visulisation – linked directly to accurate source data sets.
  • The age of customisation of ERP and financial tools will be over. Instead businesses will adopt standard processes provided by software providers and purchase them on an  ‘as a service’ basis, via the web.
  • With less customisation, and simpler web enabled processes ERP implementation cycles will shrink and CFOs will have a key role demanding that major ERP switchouts / replacements can be implemented in an agile fashion within the cloud in less than a year!
  •  Finance will be mobile, and will be providing mobile services to the business.  Every general manager will be able to review their business unit’s financial performanc on a daily basis via their mobile tools of choice.  No longer will the business be able to cite lack of real time information as a reason not to do something.

FINANCE TALENT WILL NEED NEW SKILLS

  • A new breed of finance personnel will emerge … The data analyst with ability to deliver insights with authority will take centre stage.  With strong mathematical and modelling skills coupled in teams with knowledgeable and influential business partners, the analysts will pro-actively provide insight from the ever expanding data sets available to the finance function from across the enterprise.
  • Remote working will be the norm. The Finance team will be dispersed across many locations, with modern communications, shared workspaces and lack of paper allowing finance personnel to work effectively remotely. This will force finance leaders to become adept at managing a geographically remote workforce.
  • There will be more routes to make CFO than ever before. Shared service, financial accounting and business partner functions will all breed CFO contenders… Expect that leaders are cycled through roles in each of these groups to develop rounded skillsets for their executive CFO role.
  • The next decade will be the time of the Finance Business Partner.  This rare breed, of commercial savvy, strong influencers with excellent communication skills will be developed through extensive targeted training and in larger organisations… an increasing proportion of these business partners will not have a core finance background.  They may have started out as data scientists, commercial managers, lean process black belts or learning communications and influencing within sales organisations.
  • Digital, analytics and technological nouse will set finance high performers apart from their peers along with strong influencing skills.  A word to the wise, any finance professionals should start brushing up on those skills now!

I’m looking forward to helping CFO’s on this roller coaster journey to the finance function of 2030 :-).  see you on the journey…  reach out to me with your thoughts and comments on the future of the Finance function by contacting ean.evans@au.ey.com.