Another area in which high-performing organizations excel is in deploying agile operating delivery models to adapt to changing business models and taking advantage of new technologies. Their success in this area compared to others once again confirms that while execution is critical, it remains a challenge for most finance teams.
In the past, Finance has sought to balance the benefits of centralization – such as the ability to enforce a consistent strategy across the enterprise, reduce costs through economies of scale, and leverage scarce skill sets – with the flexibility and local responsiveness of decentralization. Centralization will still often prove to be an important element of future operating models. The impetus of these centralized models, however, are expected to increasingly shift away from cost reduction, with digital technologies and the availability of data making value creation the primary focus of operating model redesign.
High-performing companies have recognized the implications of the shifting technological landscape for their operating models and have taken actions to match: they are more than twice as likely to be very active in overhauling their SDMs. What’s more, they view the desire to fully utilize Cloud, analytics, and automation technologies as by far the most important rationale behind their SDM redesign initiatives. Non high-performing organizations, on the other hand, tend to overemphasize improving talent capabilities when redesigning SDMs, indicating that they face greater skills issues than their high-performing peers.
Centers of Excellence (COEs) will also play an important role in the Finance delivery models of the future. As more sophisticated systems are able to extract key data for analysis, Finance will not need to embed as many staff in business units and geographies. These COEs, equipped with intelligent automation (IA) and concentrated expertise in analytics, should help guide the business in such areas as forecasting and capital allocation decisions.
As the function continues to evolve, finance organizations will likely grow smaller, with a primary focus on governance and exception management. As automation becomes more sophisticated, even exceptions should be rare as predictive analytics will increasingly be able to minimize them. Reporting should be real-time, self-service and flexible enough so that users can get to the level of detail they need to support decision making. Global teams should be fully supported by a service catalogue, with standard KPIs focused on both financial and operational excellence.