Change is the new normal. The rate of change due to digitalization and technology continues at a breakneck pace. Technologies that were nascent last year are becoming mainstream.
Businesses and organizations need to be agile to keep ahead of the competition. An Oxford Economics survey showed clearly that finance organizations that are taking advantage of digitalization are reaping the benefits. Automation allows finance organizations to focus on strategic and value-added topics. What does all this change mean for the finance professional in 2018?
We asked finance thought leaders to share their 2018 predictions for finance in this new digital world. Their insights include a sharp focus on automation, providing immediate insights, agility to support change and new regulations, reskilling the workforce for all these new technologies, and more.
Review the predictions from 2017 and see how they have evolved for 2018.
1. Sebastian Behrendt, SAP, Regional CFO, Middle and Eastern Europe
Artificial intelligence (AI) as an academic discipline has been around for 60 years. In recent years, computer power has increased massively, and machine learning became available for everyone. At the same time, algorithms for the business community left the labs and become mainstream. In 2018 and beyond, we will see the benefits on a broader scale for the finance department, which supports self-driving end-to-end processes with a very high degree of automation like automated intercompany reconciliation and processing. The same applies for distributed ledgers (blockchain). We will see more productive scenarios and introduce reality checks against the hype. Besides all the new technologies, we should not forget to do our homework – to invest in training and upskill our finance colleagues. They need to gain knowledge about new technologies and not only about accounting rules. In addition, we need investments in data governance to ensure data consistency and reliability.
2. Alex Bennell, Capgemini, SAP Finance Transformation Practice Lead, @Capgemini
Cloud burst! Public cloud is now a genuinely disruptive option for finance organizations in large enterprises, offering agile solutions for rapidly growing business units or new group acquisitions, deployed in a two-tier landscape. The public sector will consider cloud to replace overly complex and expensive on-premise ERP, the overwhelming majority of which they don’t use, with something standardized yet powerful, robust yet frequently updated. Simpler; more agile; CapEx to OpEx.
3. Joel Bernstein, SAP, CFO Global Operations
2018 requires maintained focus on the redesign and automation of processes, continued focused on customer service, gained experience with embedded business outcomes, and ongoing compliance adherence. We need to shed the burden of legacy data, processes, and systems, which will allow us to spend our time on innovation and the future.
4. Thack Brown, SAP, GM Finance Audience, @thackbrown / @SAPFinance
The digital revolution in corporate finance has been underway for a solid 3 years now. With a solid foundation of first-movers now achieving material improvements, 2018 will be the year that established best practices using digital tools will go mainstream. At the same time, artificial intelligence and predictive analytics for automating processes and delivering insight from data will become standard operating procedure. Just to show that digital is a journey, and not a destination, blockchain will emerge with its first enterprise-scale applications, offering fuel for more improvement in the future.
5. Tammy Coley, BlackLine, Chief Strategy Officer, @BlackLine
Under pressure to increase efficiencies and productivity and ever fearful of competitors gaining an advantage, businesses in all sectors are taking a serious look at new technologies, such as AI and robotics. Many businesses are already dipping their toes in the water. And it’s happening throughout organizations — including finance and accounting. A recent survey commissioned by BlackLine revealed that the role automation is playing in F&A is gaining prevalence. Nearly half (46%) of those surveyed said that AI plays a role in their organization today, and 30% currently are investigating its use. This certainly won’t make accountants irrelevant, nor does it mean they’ll lose jobs. It does mean, however, that they need to evolve along with the technology. Every challenge is an opportunity: in this case, upping their game to add an even higher level of value.
6. Peter David, SAP, Regional CFO Europe Middle East and Africa (EMEA)
With enhanced capabilities in machine learning and artificial intelligence, we will see further automatization on standard finance processes and improved predictive analytics, increasing the relevance of the finance function for future business success. It’s important for finance professionals to realize that they own the data, not only to analyze the past, but much more importantly, to deliver insights to improve business in the future, dig for new opportunities, and propose new business models. Finance departments need to be prepared for much faster and shorter innovation cycles using state-of-the-art finance systems and setting up the finance organization for success.
7. Nilly Essaides, The Hackett Group, Senior Research Director of Finance/EPM Advisory
The Hackett Group research reveals that finance’s main objective in 2018 is to support the enterprise with better analytics. Faster and better insight gives management the intelligence it needs to make decisions about capital allocation, investment and assess strategic objectives. Digital technologies are a core part of finance’s ability to deliver insight and drive business value. Increasingly, finance will leverage predictive analytics tools and AI to create more robust forecasting and business analysis capabilities. By automating and augmenting finance’s decision-support abilities, new digital technologies will enable finance to build better business partnerships and support senior management in the assessment and development of business strategy.
8. Joe Harpaz, Thomson Reuters, Managing Director, @joeharpaz
In 2018, U.S. tax reform (Tax Cuts & Jobs act), new sales and value-added tax regulations abroad, (notably in Middle East and India), and new OECD reporting requirements will introduce the biggest disruption that U.S. corporate tax departments have faced in over 30 years. To meet increasingly stringent compliance requirements and deadlines, tax departments will have to streamline and automate quickly, and effectively utilize its enterprise resource planning (ERP) technology and tax compliance solutions. Those who are heavily dependent on spreadsheets and manual processes will struggle, given the rapid and compressed timeframes to adjust their processes.
9. Drew Hofler, SAP Ariba, Senior Director, Financial Solutions Marketing, @dhofler
2018 is a year when finance will build upon the foundation of networked finance and peer-to-peer (P2P) data, combining visibility into data at all points in the P2P process with robust, collaborative tools to yield new insights and respond nimbly to changing market dynamics and business goals. Through a connected business network, finance will have the visibility and the tools to collaborate with suppliers to increase free cash flow, improve working capital, and increase yield on cash to improve their bottom lines while concurrently reducing supply chain risk. With the application of AI to sort through the massive amounts of transactional data, finance will be able to make smarter decisions faster, and execute on available opportunities in a more timely manner.
10. Brian Kalish, Kalish Consulting, Principal, @FpandaBTK
The trend of using increasingly sophisticated tools and technologies that we have witnessed over the past several years will only accelerate in 2018. That will enable today’s FP&A professionals to break free of mundane and low-value data-focused activities, and focus on providing business partners and organizations with the insights and foresights to make those better, smarter decisions faster, which is needed to support the strategies designed to make the organization thrive in the years ahead. There will also be a higher premium placed on the ability to communicate findings and insights to greater and more diversified audiences, both inside and outside the organization.
11. Tony Klimas, EY LLP, Partner, Global Finance Practice Leader, @tonyklimas / @EY_Alliances
As traditional finance and accounting objectives around controls and reporting are fully met, the ability to see value where no one else does will continue to become an important capability that sets apart world-class finance organizations from others. The cloud will play a big role in making unstructured data something everyone is focused on, with the best finance organizations figuring out how to leverage this date to create value. A focus on the human capital agenda, from career paths to competency models, will become even more critical, and the best finance organizations will inspire their teams to innovate and lead despite all the uncertainty that exists today. Disrupted career paths and automation technologies will make simulation- and scenario-based training more important than ever. The concepts around blockchain and distributed encrypted ledgers will start to move from theory to practice at an accelerating pace.
12. Richard McLean, SAP, Regional CFO, Asia-Pacific and Japan
2018 will see finance leaders accelerate the adoption of digital and innovative technologies to drive continued finance transformation in three main areas. The first is core process automation, with technologies such as machine learning and robotic process automation (RPA) becoming more mainstream to drive even higher levels of efficiency. Second will be Big Data management and powerful analytics to bring increased transparency to key business metrics and enable better data-driven decision making at all levels. Third, we will see finance leaders increase their investment in training and upskilling their people with the essential “soft” skills to play a more influential and collaborative role and to drive improved business performance.
13. Phuong Nguyen, Principal and Central Finance Lead, SAP Center of Excellence, Capgemini, @phuongnguyen_1
2018 will position finance as an important piece in the digital transformation strategy. The triangulation of unified reporting-cum-distributed ledger technology, machine learning, and cloud will tackle complexities of back-end reporting processes and infrastructure scalability and security. Finance will sit snugly with supply chain and procurement initiatives like Integrated business planning (IBP) and robotics, creating a need of a redefined ERP play within the organization.
14. Rob Ried, Deloitte Consulting LLP, Senior Manager, @Rob_Ried
Automation everywhere. Automation will blossom from niche solutions to a pervasive solution juggernaut. Maybe you have heard about it? That little automation proof of concept that showed some promise has now proven its mettle. 2018 will be the year of the bot. Digital transformation will emphasize automation as a prime enabler for change. We will see a surge in white-collar automation; organizations big and small will deploy bots and quickly redeploy their human resources. Organizations that embrace automation will take the lead within their industry.
15. Henner Schliebs, SAP Global Marketing, Head of CFO Marketing, @hschliebs
CFOs will start managing big-ticket items as part of their finance transformation initiatives. They will start to optimize their working capital to fund sustainable growth initiatives and gain better insights into their corporate spend via connecting their financials to the value chain. This will enable the capture of employee-related costs like salaries, contingent workforce, employee-initiated cost, direct and indirect spend in the supply chain, as well as sales, marketing, and all other costs that affect profitability. The connected finance department will focus on the use of modern automation capabilities such as machine learning, advanced predictions, and connected platforms to continue to feed the need for insights and decision-making support. As the CFOs are leading the strategic aspects of their companies, they will be the natural drivers to tie the strategy to operational guidance to optimize the company’s performance.
16. Joan Warner, Oxford Economics Group, Thought Leadership Managing Editor and Senior Analyst for Finance, @OxfordEconomics
This year, CFOs will work more closely than ever with their tech colleagues in the C-suite—as signaled in the Oxford Economics/SAP 2017 research study, How Finance Leadership Pays Off: Six Ways CFOs Stay Ahead of the Pack. The finance mandate and the technology mandate will intersect in three ways: firstly, as CFOs evaluate tech investments to improve enterprise competitiveness in the digital economy; secondly, as cybersecurity is recognized as a grave business risk in every industry sector; and thirdly, as CFOs improve finance-function effectiveness with automation and AI.
17. David Williams, SAP, VP, Global Product Marketing, Analytics (EPM & GRC) @daveswilliams
Financial applications are about to get much more intelligent. Whether it be in the form of embedded compliance to reduce risk, automated routine processes to improve efficiency/reduce errors, guided machine discovery with prescriptive actions to make better decisions, or natural language processing to simplify search for answers, in 2018 it gets real. Modern financial apps will have these capabilities woven in, in a way that finance teams can actually use without having to rely on IT.
Credits to Judy Cubiss for her input and research.
Brian is Founder and Principal at Kalish Consulting. He is Former Executive Director – Global FP&A Practice at AFP. He has over 20 years of experience in Finance, FP&A, Treasury and Investor Relations. He previously held a number of treasury and finance positions with the FHLB, Washington Mutual/JP Morgan, NRUCFC, Fifth Third and Fannie Mae. He has spoken all over the world to audiences both large and small hosting FP&A Roundtable meetings in North America, Europe, Asia and soon South America. Brian attended Georgia Tech, in Atlanta, GA for his undergraduate studies in Business and the Pamplin College of Business at Virginia Tech for his graduate work. In 2014, Brian was awarded the Global Certified Corporate FP&A Professional designation.