Leading in a technology-driven world - KPMG Denmark
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Leading in a technology-driven world

Leading in a technology-driven world

CFOs need to make some difficult long-term decisions about the future of the finance function.

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Senior Manager, CFO Advisory

KPMG in Denmark

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Beach and water

Today’s CFOs need to make some difficult long-term decisions about the future of the finance function.

Given the pace of technological change, it seems fairly obvious that finance functions are evolving. Across the Nordics, we are seeing finance functions invest significant amounts into new technologies. In part, these investments are aimed at ensuring the function remains highly relevant as the business itself transforms. But finance leaders are also looking for new ways to improve the efficiency and productivity of the function itself.

By Antero Elonen, Senior Manager, KPMG Finland

Yet the underlying problem isn’t necessarily about the technology or tools. It’s about the purpose. The reality is that – in the past – the finance function’s role has been to process financial and operational data into useful knowledge. But with the introduction of new technologies and trends such as the use of big data, analytics and intelligent automation, many finance functions are finding their traditional tasks are now being disrupted by technology.

Data and analytics technologies can crunch much bigger volumes of data than humans, and in a multitude of different ways. Intelligent automation virtually eliminates manual data entry. Visualisation technologies offer decision-makers deep visibility into their finance and operational numbers. Indeed, when investments into new finance technologies are properly aligned to corporate operating models and IT strategies, they can significantly enhance both short-term and long-term business opportunities.

No wonder respondents to our survey suggest that organisations will be investing more into these new technologies. Indeed, respondents indicate that the vast majority will increase investments into artificial intelligence and machine learning. Around three-quarters of respondents plan to increase investment into data and analytics tools.

An opportunity for change
So what does all of this mean for the CFO and the finance function? And how will these pressures and new technologies influence different parts of the function? Based on our experience, we see three key areas where finance leaders should expect both disruption and opportunity.

1. Operational finance

We expect to see operational units such as A/R and A/P generate measurable value as ERP systems move to cloud-based platforms. That will allow processes to be simplified and controls to be improved. At the same time, we expect automation (led by robotics process automation, machine learning and blockchain technologies, but quickly followed by new tools enabled by better system integration and cognitive computing) to eliminate most of the routine manual transaction tasks currently conducted by the function.
As the efficiency and quality of transactional processes improves, finance functions will also enjoy more efficient and effective shared service centres and outsourced processes. Based on our experience, that will lead to enhanced quality, better control and improved cost savings.

2. Business control

The finance function is privy to massive amounts of enterprise data, processes and analyses. This provides finance with a unique opportunity to refresh the function’s role as a champion of internal analytics with a focus on analysing and leading data strategies and business insights across the organisation. Combined with a renewed focus on strategic trend analysis, research capabilities and forecasting abilities, finance functions can become leaders in the predictive modelling of not just finance data but also consumer behaviour and trends.
We believe that, by deploying intelligent automation into finance processes, finance leaders will uncover massive new opportunities such as, for example, creating insightful real-time reports based on live data.

3. Treasury

Like many other teams within the finance organization, the treasury function has secured significant value from digitisation. Technology has enabled the treasury function to automate transactions, manual reconciliations and many other routine tasks. This has freed resources up to focus on more value-adding tasks such as delivering deeper analytics and acting more like a business partner than a cost centre.

A new sense of purpose
While these three areas seem ripe for continued disruption and opportunity, the reality is that technological trends are fast-changing. And we believe that – enabled by new technologies and better data – CFOs will be better placed to improve both financial and business decisions throughout the enterprise.

However, it must be stressed that the future of finance will require the function to take on practical tasks such as executing complex financial modelling and advising the enterprise on the financial and business impacts of different scenarios. This will require finance teams to improve their analytics, programming and data modelling capabilities.

Leading through disruption
While most CFOs recognize they need to adapt and embrace these disruptive trends, many are struggling to develop a roadmap that balances transformation against continued cost pressures and the uninterrupted delivery of core finance services.

Our experience suggest that it requires CFOs to develop a practical yet visionary roadmap that combines tools and capabilities to help elevate the function and develop its variety of new roles within the enterprise: business partner and strategist; business solutions architect; financial data modeller and scientist; and process and control leaders.

To be clear, this type of change does not happen overnight. It takes time, effort and – perhaps most importantly – the support of management and the organization as the function starts to tailor itself to the needs of the business. Our view suggests that the most successful finance functions of the future will be the ones that now leverage these opportunities (and tackle the associated challenges) to achieve competitive advantage.

© 2019 KPMG Statsautoriseret Revisionspartnerselskab, a Denmark Limited Liability Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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