We are observing growing complexity around business decision-making, with additional dimensions for consideration by finance teams. Paul Turner, vice-president – UK and Ireland at AICPA & CIMA, writes
The last decade has been defined by rapid technological advances, evolving market dynamics and increasing stakeholder expectations.
Finance teams must now go beyond financial stewardship and play a strategic role in improved decision-making to guide their organisations toward long-term value creation. The AICPA & CIMA Future of Finance research 2.0, Redefining Finance for a sustainable world, points to four key shifts that the finance team needs to make to successfully navigate this evolving landscape:
- Adopting a longer-term time horizon. Teams should ensure effective resource and capital allocation towards innovative strategic projects, for a transitional business model adapted to a circular economy that require significantly longer-term perspective and forecasting;
- Expanding stakeholder relationship management. Teams need to look beyond investors, regulators and boards to include employees, suppliers, distributors, customers and the impacted communities that the business operates in;
- Managing intangible capitals. This encompasses the management and investment in human, intellectual, natural and relationship capital, to drive intangible value creation;
- Partnering across the entire business model. This means shifting the focus to the dimensions that create value – shaping strategy, culture, innovation, technology, and the customer value proposition and not limited to only the measurement and reporting of the costs and revenue dimension of the business model.
By enabling these shifts, finance teams can move from being stewards of financial resources to also becoming drivers of innovation and architects of sustainable business growth and long-term value creation.
Becoming high-value partners
Demands placed on the finance team are changing significantly – not least because the nature of the work is transforming. They are no longer just the number crunchers and gatekeepers, but strategic business partners equipped with new skills and deeper insights to meet modern business needs.
Finance teams must evolve to add value to their organisations – developing new skills and competencies, embracing technology, and thinking more strategically. Whether you are just starting out or an experience professional, there is only one way forward: adapt to grow.
One of the most essential areas of development is problem solving and critical thinking. These skills are more important than ever, as they impact every area of business and enable the finance team to make informed decisions, drive business performance, and navigate challenges with confidence.
Here is how they can help enhance the finance team:
- Analysing complex data. The finance team often deals with large datasets and intricate financial models. Critical thinking allows them to go beyond surface-level analysis and interpret financial information within the broader business and market dynamics.
- Driving innovation through problem-solving. By analysing issues from multiple angles and considering long-term implications, the finance team can develop creative solutions and make data-driven decisions that drive long-term value creation and business success;
- Adapting to change. In a constantly evolving business landscape, the finance team must remain agile and able to quickly assess and respond to changes in regulations, market conditions and technological advancements;
- Making better decisions and assessing risk. Critical thinking skills are essential for the finance team to evaluate potential risks, understand their impact and develop strategies to manage them effectively;
- Planning strategically. Analytical thinking is vital for long-term planning, helping the finance team to interpret historical data and analyse market trends to align financial strategies with business goals;
- Communicating and collaborating effectively. The finance team must be able to translate complex data into actionable recommendations, and effectively communicate and collaborate across the organisation to support success;
- Mitigating bias. A finance team that can recognise and address their own biases will make more objective, balanced and effective decisions;
- Staying ahead of the curve. In a competitive business environment, a forward-thinking finance team anticipates change, identifies opportunities for innovation and growth, and helps to drive the organisation forward.
Transforming the finance team
Finance teams are no longer confined to managing numbers. To thrive in this new era, they must hone broader skill sets and cultivate open, forward-thinking mindsets.
The future of finance is incredibly bright, if we are ready to step into it with purpose, agility and a willingness to keep learning.
