Transforming the finance function in the digital age

Organisations need to invest in new capabilities and talent to stay relevant in the digital economy.

AS finance teams emerge as a driving force for digital transformation, businesses are increasingly incorporating data and digitalisation solutions into their finance processes to get better insights for planning and decision making. To do this, companies need to invest in new practices, technologies and talent, industry players say.

Elizabeth Ng, chief financial officer at Deloitte Singapore, says that organisations first need to develop a strategy that articulates clearly how transformation initiatives will create, deliver and capture value for the organisation.

"Focus and define the specific enterprise capabilities that will help achieve competitive advantage. Be explicit about how this drives value and establish strong, clear connections to execute the transformation plan," she explains.

Such efforts are also taking place in the public sector, which has embarked on various finance leadership transformation efforts in recent years. These comprise community building, capability and career development initiatives, and the uplifting of the role finance plays in supporting public sector agencies, says Don Yeo, assistant chief executive, Energy Market Authority, and senior director (organisational transformation), Public Service Division, Prime Minister's Office.

"A Finance Competency Framework has been rolled out as the foundation for the implementation of a competency-based development approach for the finance community. Apart from the traditional financial management skills, new competencies include business transformation, business partnering, systems and data management," he says.

DATA IS KEY

As companies continue to incorporate data in their operations, they must make business analytics a priority for all employees, industry players say. To motivate employees to incorporate insights into their roles, companies can consider tying individual performance goals to the meaningful use of analytics, proposes Ms Ng.

Management should also introduce a single master system that offers a holistic view of all areas of the company, making it simpler for employees to present information, make decisions and act on data. In companies where all personnel have been educated about how to leverage data, 88 per cent exceeded business goals, compared to just 61 per cent of those with only a few trained employees, research from Deloitte showed.

Says Ms Ng: "Eliminate the idea that highly-skilled mathematicians or data scientists are the only ones responsible for business analy-tics. Spread accountability broadly and train all employees about the role of analytics in their respective jobs."

GETTING THE RIGHT TALENT

With the need to harness data as a powerful business intelligence tool, having the right people with the appropriate skills is central to organisational success. As such, the finance department should no longer be viewed as a business unit that hires only accountancy graduates. Instead, companies should also consider hiring data scientists and IT graduates as well.

"Finance teams require people with storytelling skills who are able to communicate the results of the data and tailor the communication to respective audiences be it for business performance reviews or decision making needs. The massive data obtained is useless if the finance team is unable to explain what it means or how the data can be used to back up new ideas," says Ms Ng.

"Being data literate is not enough - we need to be able to marry business acumen with analytical skills to come up with predictive data for better decision making and for future budgeting plans."

Meanwhile, public sector organisations are also training their staff to leverage digital capabilities to meet the need for more citizen-centric programmes and policies, reveals Mr Yeo.

"Employees in the public sector will therefore need to acquire new skills such as data analytics and design thinking to help them better formulate appropriate policy interventions. Training is also now delivered as a blend of online learning such as through mobile apps as well as via the traditional classroom."

NEW MODEL FOR FINANCE EDUCATION

To ensure that finance professionals acquire relevant skills and knowledge, industry and educational institutions must work together to identify the skill gaps and to curate the re-levant training programmes, says Ho Yew Kee, associate provost (SkillsFuture), Singapore Institute of Technology. "There is no simple and quick-fix solution. All these will take time but the sooner we start, the faster we will close the skill gaps."

He noted that in training finance or accounting professionals to be future-ready, digital skills will need to be part of their foundational training. "It would seem that the 'T' shape education model would need to be transformed. The 'T' shape education is where the bar on top is the training of soft or future ready skills and the vertical bar is the deep finance and accounting technical skills," explains Prof Ho.

"However, with digitalisation, the soft skills and the deep technical skills will be resting on the foundation of digitalisation. This is the future of education, where without a good knowledge of digitalisation, a 'T' shape education will be unstable and insufficient."

The challenge, however, is deciding which specific digital skills and knowledge to teach students, and how deep this knowledge needs to be. For instance, while data visualisation is a necessary skill for finance professionals, it is debatable whether coding should also be introduced in finance and accounting courses.

Says Prof Ho: "This will be a debate which must be centred on resources, both in time and the students who will be undertaking the training. This must also be debated within the context of an already very crowded and busy curriculum and within the constraints of a three- or four-year degree programme."

ACCELERATING ADOPTION

Most companies, especially small and medium-sized enterprises, are still in the early stages of applying digital technologies to finance processes in ways that will create more efficiencies, insights, and value over the long term, says Haryane Mustajab, chief operating officer and head of finance, Bird & Bird ATMD LLP.

To accelerate this process, companies should embark on small pilot projects and digitise the most critical finance tasks first, she advises. This allows leaders to establish proof points and ease the eventual rollout of digital technologies across the entire function and, eventually, across other parts of the company. For example, automated tools such as robotic process automation (RPA) have advanced to the point that they are being applied across multiple areas of the business.

"The companies successfully implementing RPA at scale have done so by altering their operating models and redesigning their processes. Finance staffers are receiving training on RPA technology, so they no longer need to throw work flow requests to an already overworked and paper-centric organisation. That improvement has made it easier for some companies to move beyond RPA pilot tests and realise tangible outcomes," says Ms Haryane.

Ultimately, for transformation to be successful, organisations need to re-energise and accelerate the digitalisation of their finance functions. She says: "Even as the Covid-19 crisis continues to create a world of uncertainty, the goal must be to rejuvenate and build the workforce for the longer term. Companies that are strong and resilient will be better placed to survive and prosper. Those are qualities that can't be taken for granted; they need to be cultivated."