The times (and technologies) are changing. So too must finance directors, says David Carrick, CFO of Apex.
A decade ago, financial teams and their directors stuck to the numbers. Those days are over.
Today, in addition to budgets and accounting, finance teams must work closely with other departments to manage the impact of digital disruption and technological evolution, balance innovation with operational effectiveness, and make data analytics a key priority for their organisations.
This expansion of responsibilities – and the requisite skills – began before the coronavirus pandemic. But the Covid-19 crisis, with its accelerated push for digitisation due to remote work, sped up the transformation that many finance departments and their respective leaders are undergoing.
What do these changes mean exactly for finance teams, their directors, companies, and operations in the future? If they can rise to the occasion, they will have opportunities to play key roles in shaping increased collaboration, greater efficiency, and heightened growth throughout their respective industries.
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From silo operation to active partner
Finance directors and select members of their team were stepping out of their departmental silos long before the pandemic thanks to the onset of the digital transformations that began impacting businesses several years ago. Finance departments were already moving toward digitisation, using new technologies to manage the company’s finance and accounting functions more efficiently, and using data to inform strategic decisions on finance, operations, and strategy.
The start of the pandemic saw companies scrambling to elevate their digital operations as teams and clients went remote. More than 18 months later, after vaccinations have reopened some offices, many professionals are still working at home or in a hybrid arrangement, and it’s unlikely that work will go back to the pre-pandemic business as usual anytime soon.
The changing conditions have compelled finance middle management to become much more digitally literate and to transform how they operate. That’s not just in terms of skills.
There is variation between firms in terms of how digitally mature their operations are. There is variation within teams between individuals and layers from the top to new professionals entering finance. Digitally advanced middle management has had the opportunity to gain leadership opportunities, or needed to learn how to manage up when directors are reticent to make leaps forward. Meanwhile, directors have had to gauge how much change their teams can manage all at once.
It’s not just remotely accessing data and engaging with it digitally. It’s also contending with the proliferation of applications digitized data enables and prioritizing each, and the learning curve of each. Finance teams have often become the primary overseers of application programming interfaces, blockchain, cloud computing, data analytics and robotic process automation. Their education in accounting practices has been pushed up against information technology trends.
These technologies, generate enormous amounts of data, which is translated with the help of artificial intelligence and machine learning tools into more effective, objective insights around financial performance, greater security around the data, and fewer costly mistakes in decision making.
And that is the key, to drive toward standards upon which better workflows can sit.
Finance directors managing these processes are finding themselves working to achieve common standards across traditional finance functions, promoting open-book approaches to company data, and staying on top of markets, regulatory changes, and risk management issues that might affect them. That’s further driven the need to work across all departments, from sales to acquisitions to human resources to obtain the most representative data that paints the most accurate picture of their enterprises.
In other words, technology doesn’t just help financial directors get things done. It is a business enabler that makes directors essential players who work with C-suite leaders to create strategies for growth and business transformation.
Among directors-to-be this creates openings for middle managers who have invested in digital skills, potentially taking in courses and conferences beyond those required in the past to advance. These managers can be pulled up into more strategic roles where their digital familiarity can aid leaders with experience, but without a grasp of new technologies coming online.
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Challenges and opportunities
All of these changes entail operational and procedural challenges, of course. But I believe this transformational period will create great opportunities as we continue as well, both in terms of operations advantages and career opportunities.
Communication provides one example. A few years ago, it was easy to take for granted face-to-face communications with leaders and team members. Now, financial directors must be proactive and flexible with colleagues, especially in their cross-functional communications with other departments. Managers that can build best practices can earn an edge.
Collaboration is another issue. Where there were once traditional operational hierarchies are now blurred lines. In this time of transformation, the best finance directors are enablers who can inspire and manage departments that work outside of their silos in the interests of pulling together enterprise-wide strategies and pursuing organisational goals. At the same time, teams can demonstrate merit more visibly to colleagues.
Be part of the change
For growing businesses, expansion places new demands on the finance functions to be flexible and nimble as they integrate new acquisitions and information technology systems and implement different accounting standards and regulations into their workflows. With financial responsibilities becoming increasingly global, the finance function needs to navigate across different cultures, working practices, languages, and time zones, too.
To rise to the occasion, finance directors and their managers have become more technologically savvy, more elastic in assuming new roles and more proactive in upgrading skillsets – all with the goal of better participating in the most important discussions in their companies. The best ones know that the ability to access relevant data and quickly propose solutions will be critical to delivering growth in the years ahead.
David Carrick is CFO of Apex Group.
AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.