We are, by all accounts, in the middle of a digital revolution and not only is it changing the way we interact and do business, but it is also shaping how a finance function operates. 

Once you have a sense of where a finance function is heading, finance professionals can then consider what skills & training they may want to pursue to ensure they are best placed to thrive in this new digital world.

This is one of a series of three blogs – assessing some of the predictions about the future role of finance. The other two blogs focus on the skills needed for the digital world, one covering technical/digital knowledge and the other covering soft skills.

Assessing some predictions about the future of finance

There are a number of quality publications, particularly from the big four accountancy firms and professional accountancy bodies, that attempt to predict what the finance team of the future will look like. Below is a summary of some common elements together with my views.

1. More technology

You don’t have to look very hard to find predictions around the use of Artificial Intelligence and Robotics. However, for your traditional conservative, resource stretched finance function this feels a long way away, particularly when considering the legacy estate of technologies that will already be in place. 

I suspect of more relevance to most finance professionals is the current move to the cloud, the constant innovations around ERP and ancillary software, the criticality of cybersecurity and the tentative adoption of blockchain technology. 

Certainly, there is a need to keep up-to-date with technological & digital innovations, so that, as a minimum, you are capable of evaluating and selecting which ones are worth pursuing further. This is covered in more detail in my next blog in this series. 

2. More automation 

There have been increasing levels of automation within Finance for the last two or three decades, particularly for back-office functions and this will surely continue. Now I am reading about extreme automation - although specific tangible examples are thin on the ground (and please feel free to share!).

However, my feeling is that advances here are likely to level out for most corporates simply because businesses are rarely simple and often have numerous exceptions to the way they do business. I remember only too well from my days as a manufacturing engineer that the key to automation is (1) consistency of process and (2) consistency of inputs. 

Therefore, there are always going to be exceptions to some finance operations that prevent the ‘extreme’ side of automation from occurring. 

3. More (big?) data, more analysis and more insight

There is no denying that more business-related data is being made available to companies. And as custodians of the financial data, finance teams possess the skill set to also manage non-financial data as well. 

However, will there be diminishing returns to the quality of analysis and insight that can be gained with extra data? I think there is this possibility partly because of bandwidth/time constraints and also because both human behaviour and the future (e.g. in forecasting) can be uncertain and unpredictable – and extra historical data may not solve this

On a more positive note, there are certainly some smart analytical tools around (and more around the corner) and notwithstanding the challenges around data quality (which company doesn’t have this problem!) I can see an upside here.

4. Fewer people, more commercial

I think this is a fairly safe bet, particularly from a back-office perspective. However, most of the studies talk about finance becoming more strategic and taking a more business partnering approach (and indeed this is something that has been forecast for the past couple of decades). Therefore, I believe anyone involved in FP&A or the commercial side of finance may see their roles expand and their teams grow. 

5. More integration with other teams

Linked to all of the above, I do agree that Finance will become less siloed and more integrated with other teams. The pre-eminence of technology in business means that Finance will have closer links with IT departments; the explosion of data means closer links to Business Intelligence & Marketing teams (think of the emerging roles of data scientists that didn’t exist 20 years ago) and in becoming more commercially focused, Finance will inevitably sit closer to business units or product teams.

With more integration and a more commercial focus (point 4) finance teams will need to draw on their soft skills to maximise their effectiveness and this is covered in more depth in my final blog of this series.

Concluding takeaway – some hype, business complexity a barrier, but technology will help

Business complexity and resource constraints make me skeptical that the digital revolution can always solve some of the problems faced by Finance – e.g. getting hold of automated, clean data that can be ‘sliced and diced’ to give in great insight. Without that foundation terms like AI and robotics feel a few years off. 

However, some things are very real today – like the move to the cloud, the evolution of blockchain, the ability to house large volumes of data and to process it ever more quickly. 

Moreover, finance professionals will benefit from becoming digitally savvy and continuing to improve their soft skills as they become more commercially focused and integrated with other teams. Both topics are covered in my subsequent blogs.

The article was first published in Unit 4 Prevero Blog