Technology continues to be the main lever of change for business and society today. This is leading to an ever-widening gap between companies using advanced technologies to innovate and those being left behind in the transformation game. This means that digital disruptors are capturing the lion’s share of market demand, capital investment and skilled talent, thanks to higher levels of digitisation. Companies that have not embraced this digital, customer-first way of working are struggling to stay relevant in their industries and with their customers.
One of the main hurdles that is holding a lot of businesses back when it comes to digitisation is the lack of digital skills in finance teams. To tackle this issue, finance teams need to invest in digital skills and technology to effectively support the wider organisation’s growth.
Finance teams have a crucial role to play in readying their organisation for the future, however, our Agile Finance Unleashed report shows that nine in ten (90%) finance professionals do not think they have the skills they need to support their organisation’s digital ambitions. This is a serious issue for organisation which aspire to be more innovative and make a better use of technology.
Recent research from the Association of International Certified Professional Accountants (the Association) and Oracle, shows that businesses could be missing out on huge growth potential by failing to invest in digital skills. When asked about revenue growth over the previous 12 months, close to half of Digital Finance Leaders (46%) had achieved growth. This drops to less than a third (29%) for non-leaders. Clearly, organisations with digitally-savvy finance teams are more likely to see positive revenue growth.
One factor preventing teams from fulfilling this role is a lack of digital technologies in the finance function, including artificial intelligence (AI), with only one in ten (11%) finance leaders saying they have implemented AI. Without these tools to automate mundane tasks, finance teams remain burdened with transaction processing, manual controls and compliance. This leaves little time for digital strategy, with more than a third (37%) of finance professionals saying they spend more time collecting data than analysing it.
Automating tasks could also help to free up more time for business partnering, helping finance professionals to move up the value chain and use their data and insights to improve decision-making and performance management. Currently, nearly half of finance professionals (48%) say they are playing a significant and influential role in partnering with managers, but better use of technology could help to increase this further.
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Organisations also typically look to the finance function to provide data-driven intelligence and guidance about managing the risks and opportunities of a digital economy. However, only 15% say finance is widely recognised for its strategic awareness of new technologies and their ability to drive new business models.
In a situation where technology is widening the gap between digital leaders and laggards, the finance function plays a critical role in ensuring the organisation is not left behind. This means CFOs will need to confront difficult technology and human challenges, while at the same time meeting finance’s intensive, business-as-usual demands.
To remain relevant, management accountants need to be strategically aware—alert to threats and opportunities such as the potential of new technologies to change the way people work. In addition to technical knowledge, they need a commercial mindset to develop an understanding of business models and the drivers of cost, risk and value across the business’ value chain. They must also be able to join the dots between data about those drivers and how it might be analysed through to financial outcomes. They must be able to work with others to make things happen.
The responsibilities and requirements of finance professionals have fundamentally changed. Improved investment in technology and digital skills will help them to make this transition from being the cost centre within the organisation to the value creator.
Andrew Harding, Chief Executive – Management Accounting, Association of International Certified Professional Accountants