The business world has continued to change. From tax reform to major changes in accounting standards to the demographic shift in the workplace, the decade since the recession ended has made for an intriguing set of rules for the modern business. With 2019 just over a month from beginning, one can only expect more change in the way businesses operate.
Financial evolution and the increasing role of finance as a business leader has been one of our most popular topics in recent years, as it is a constantly changing topic and is something vital to the short- and long-term success of the business. It also happens to be another leading trend as we enter 2019, according to Microsoft. A recent Microsoft Dynamics 365 report looked at some of the changes that business leaders can expect in the coming year, discussing what’s new and what one can expect in 2019.
The 2019 Finance Trends Report explored the six most important trends businesses will need to consider in the coming year, ranging from financial evolution to customer demands to the impact of uncertainty on business as a whole. An extensive 65-page report documenting the needed changes organizations should plan for, the number one trend discussed in the report is that of the increasing role of finance. Over the next few days, we will look more at this trend, sharing key findings from the report as well as some of our own, discussing why the role is changing, the new roles finance is taking on, and more.
Why the Finance Role is Changing
From the Chief Financial Officer down to the accounting staff, the role of the finance professional has continued to move into new frontiers. The CFO has an increasing say in IT decisions, finance professionals focus more on strategy, and it’s no longer “bookkeepers and transaction processors.”
Most notably, this change has come in the form of finance taking a bigger role in risk management and technology. Empowered by technology, finance has to spend less time on the formerly laborious tasks that exist in their world and can now focus on the bigger picture.
Everything Affects the Bottom Line
Documented in the Microsoft report, the role of the CFO can be summed up in two simple truths:
- if something impacts the bottom line, it’s the CFO’s responsibility, and
- everything impacts the bottom line.
Both very good reasons that CFOs are spending more time getting involved in technology and risk management (among others), but it goes much deeper than that. Finance needs to evolve.
Finance Needs to Evolve
With the rise of cloud technology, the CFO now plays a part in technological decision making—nearly 70% of CFOs reported plans to increase investment in digital transformation this year. However, throughout the finance organization, this has been a cause for concern, as the increasing use of automation and AI has made professionals nervous.
Remaining Necessary to the Business—Don’t be a Bot
While the role of the financial professional will always exist, the coming decade will result in further use of technology. Although one can’t expect that a robot will take the job of the CFO, CPA, or staff accountant for at least a couple decades, increasing use of RPA and AI could displace workers unable to provide the “human touch.” A 2018 CPA Trendlines interview with Todd Shapiro asked that very question and found that:
“AI can only do so much […], the analysis can be done by a bot, just the same as a person. It’s the interpretation and communication in a way that brings insight, and I think that we’re a long way from the computer actually providing the insight, interpretation, and explanation. You’re always going to have individuals who are not financially astute, so you’re always going to have CPAs, accountants, who will have to interpret the information and present it in a clear and concise format. What they (the humans) won’t be doing is the processes.”
Skills Needed to Remain a Necessary Part of the Long Term
In our 2018 blog, New Skills for Finance in the Wake of the ‘Robotic Takeover’, we found that professionals needed to develop four key skills to remain relevant and increase their clout:
- Strategic Vision
Finance has embraced this, finding more place in the technological decision making process, finding creative solutions to financial challenges, and working across the organization to bring the company closer to its goals.
Where Will Finance Grow?
From the staff accountant to the CFO, there are a wide range of places that finance will move into. In part two, we will look at the finance organization’s increasing role in technology decision making, followed by a look at the move to lead operations and strategy. At Wipfli, we work with organizations of all sizes and industries to help you find, select, implement, and operate software that builds your business, solidifies your cybersecurity, and improves your day to day operations. Learn more about the software solutions we work with, download the 2019 Trends Report from Microsoft, and contact us for more details.