Finance in 2020: A Radical Departure
The following conversation is derived from my recent sit-down with Accenture Strategy’s David Axson, one of America’s leading thinkers when it comes to the transformation of the finance function. Mr. Axson will share his latest research and advice on APQC’s financial management webinar Finance 2020: the Rise of Analytics Competency on December 9, 2015. Wrap up the year with an eye on the future of finance. Register here http://bit.ly/1lHvGJK
Mary Driscoll: Finance transformation generally comes after a business changes in response to new market or operating exigencies. What is the problem with that sequence?
David Axson: The CFO’s organization can no longer afford to be out of step—delayed—as the business responds to emerging conditions and opportunities. Finance today must turn to digitization at the same time the business is going digital. Consider new order-to-cash models that deploy, say, Apple Pay. (Apple Pay is a mobile payment and digital wallet service by Apple Inc. that lets users make payments with a range of Apple devices.) If the business goes this route, finance is going to have to manage and account for cash [triggered] digitally, if, indeed, the business is going to fulfill its promises to customers about the value offered. In all, the business needs to compete against upstarts that are determined to take advantage of latency among established organizations. Finance needs to be a part of the competitive response.
MD: You contend in your latest paper, Finance 2020: Death by Digital, that by 2020, finance will be “the go-to source for decision support, delivering analytic insight to drive strategy across economic, market, competitor, and customer perspectives.” Example?
DA: For many organizations, digitization is not just an option to achieve competitive advantage. Rather, it is a competitive necessity. And the CFO’s organization plays a very key role in enabling this. How much capital is to be invested in digital across the enterprise is a question that is tied to where the biggest impacts can be anticipated. So, the CFO has to help in defining the digital road map. For example, finance analysts and planners should be able to understand, and weigh in on, choices; for example, social media versus e-payments.
MD: You also contend that by 2020, finance will work off a digital technology backbone. Elaborate?
DA: Cloud-based platforms will become the finance organization’s predominant technology for reporting, planning, forecasting, and analytics. Accenture research reveals that 85 percent of CFOs say they plan to increase their investment in the cloud. And more than one third expect the investment to grow by more than 25 percent over the next two years.
MD: We agree that cloud is inevitable. But APQC research finds lingering doubt among senior finance leaders. What will melt that doubt away?
DA: A look at the cost of buying servers and the on-going cost of owning servers and running IT organizations will stand out. That will certainly help to convince CFOs that the cloud makes sense. They will likely also begin to appreciate the concept of outsourcing data management. Finance in 2020 is going to be a departure on multiple levels.
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