Four Ways CFOs Should Prepare for the Future of Finance
Of all leadership roles at any organization, the chief financial officer (CFO) may have one of the trickiest balancing acts. In a volatile business environment, the CFO is responsible for both driving growth and safeguarding against risk.
There’s a lot at stake. Ninety percent of respondents to a recent Harvard Business Review Analytic Services survey said the volume of data their finance team collects and uses has grown in recent years. Nearly as many said their future performance will depend on building a data-driven culture in finance.
But in a time of rapidly accelerating change, finance operations that depend on legacy on-premises enterprise resource planning (ERP) systems for this data are increasingly at risk of falling behind those with more advanced infrastructure. Mired in manual processes to collect a deluge of data—and often hindered by a shortage of skilled labor— those departments may not have the insights or efficiency they need to make the transformational data-driven decisions their competitors can achieve by using a next-generation cloud ERP platform.
An agile cloud ERP platform can help finance leaders drive enterprise-wide transformation and value creation by finding unique insights that can lead to new revenue streams, optimal planning and talent decisions, and greater agility.
A seismic shift is underway. By 2024, 30% of organizations will implement and use artificial intelligence–enabled processes within their financial management infrastructure, according to Gartner. And 40% of organizations in service-oriented sectors, Gartner reports, will consolidate their core financial and operational solutions in a single ERP system.*
For CFOs, unlocking the power of finance data goes beyond adopting next-generation ERP. A checklist of strategies in four areas may help your organization increase agility and drive transformation to thrive in the future of finance.
Four Steps to the Future of Finance
- Increase Automation
An ERP platform with optimal flexibility and reporting capability can empower people to access data and push out decision making to the edge of the business, thereby speeding finance automation and removing friction to make finance a true business partner to every line of business.
Trustpower, an electricity company in New Zealand, found that its inefficient, customized, on-premises ERP system was keeping its people from drawing the insights it needed. “We wanted those who actually make the engineering or the retail decisions to make the financial decisions too,” the company’s CFO, Kevin Palmer, said.
After upgrading its financial management, adaptive planning, procurement, and expenses software, Trustpower was empowered with fully automated and integrated finance reporting that lets all users tap financial data for their own insights and has strengthened finance’s partnership in the company.
- Consolidate Data and Processes
Traditional finance operations may draw data from multiple systems using processes tailored to each system: accounting may use general ledger data, while financial planning and analysis departments collect data through forecasting or income statements. But disparate processes can generate and distribute data inconsistently, preventing analysts from producing reliable planning and forecasting, causing process inefficiencies, and increasing the risk of analytical errors.
Adopting an intelligent data core—a flexible data source enabled by machine learning and capable of processing large volumes of financial, external, and operational information—can help an organization consolidate and reconcile these processes, as well as learn and automate transactions while surfacing exceptions and anomalies. Implementing a flexible data core can help the finance function own the data model and governance so it can lead an organization’s transformation.
Consolidating multiple systems onto a single platform is helping Nasdaq drive a strategic growth pivot. “Our future is in using all the information we have in Workday Financials, Workday HCM, and other surrounding systems, bringing that data together, and using it in the most powerful way,” Nasdaq CFO Ann Dennison said. “Over the past two years, we’ve unified our processes around the globe and unlocked tremendous scale and efficiency.” Watch the video to learn how Nasdaq leverages consolidated finance and HR data to help power its strategic growth pivot.
- Empower Your People
At any organization, leading transformation through finance depends not only on implementing SaaS ERP but also on leaders deliberately empowering the full workforce to tap ERP data for strategic insights. Company leaders should be thinking beyond current efficiencies and considering how they might scale and connect data and insights for the future.
Fostering change requires a data-focused organization to motivate employees, reevaluate metrics, and align goals, reinforcing the imperative for integrating financial data into all business decision making. And change requires leaders to break down traditional silos, emphasizing the benefits of partnership to any lines of business that may view their data as proprietary.
- Reinforce Resilience
Resilient organizations are those that thrive under volatile conditions. Investing in SaaS infrastructure that helps organizations seamlessly integrate lines of business can allow continuous company-wide planning that boosts resilience and helps finance leaders anticipate and proactively respond to risks and opportunities.
At the start of the pandemic, a global professional services firm, Alight, faced challenges including varying needs and regulations across markets, as well as siloed information.
Alight boosted its resilience by upgrading its legacy business applications to an integrated, scalable platform that increased its global workforce’s visibility into the business and gave all employees across all lines of business a single source of truth that fostered better decision making at every level. (Watch the video to hear Alight Solutions explore the benefits of improving business processes.)
The Workday Advantage
Even before the pandemic, future-minded companies could see the benefits cloud ERP offers: easier deployment, lower IT management overhead, and continual innovation. But today’s global disruptions are pushing organizations to accelerate transformation by upgrading to Workday’s Enterprise Management Cloud. According to a Gartner Market Share report, Workday had the largest market share in 2020 for ERP Worldwide SaaS Revenue, at 18.7%.**
With more than 9,500 core HR and finance customers (including through its acquisitions of Adaptive Insights, Peakon, Scout, and Zimit), Workday continues to demonstrate why implementing and integrating SaaS ERP are helping organizations prepare for the future of finance.
Learn more in Gartner Predicts 2022: The Office of Finance Is Consolidating Applications to the ERP Suite | Workday.
*Gartner Predicts 2022: The Office of Finance Is Consolidating Applications to the ERP Suite, John Van Decker, Robert Anderson, Greg Leiter, November 12, 2021
**Gartner® Market Share: Enterprise Application Software as a Service, Worldwide, 2020, Neha Gupta, Yanna Dharmasthira, Chris Pang, Craig Roth, Jim Hare, Alys Woodward, Julian Poulter, John Kostoulas, Balaji Abbabatulla, Eric Hunter, Kevin Quinn, Satyam, Supradip Baul, Amarendra, April 30, 2021