Business has been transformed by our connected society, the explosion of data, the blurring of industries, and new upstart competitors. Technology has also made a tremendous impact on how we work.
These trends are forcing CFOs and controllers to reimagine the finance function—not just how to develop flexible processes and perform tasks more efficiently, but also how to deliver value to the business and adapt to its needs, and what skills and tools are required to do so effectively.
This next evolution is often referred to as “modern finance.” Companies that recognize the need to transform their finance function, enabled by technology, are often focused on resilience and adaptability to align with business goals both today and in the future.
Modern Finance in the Digital Age
At BeyondTheBlack 2020, I’ll be sitting sit down with leaders from McKesson to discuss what modern finance is doing for this industry leader. We’ll also talk about how they’re generating competitive advantage by equipping their business with better insights for decision-making and efficiently combining the power of emerging technologies and dynamic human talent, despite tight budgets.
In helping clients like McKesson make the leap to a modern-finance future state, EY teams bring a change management framework that includes stakeholder mapping, communications planning, and execution. We use a “now, next, and beyond” framework, where we help EY clients define the future vision (or the “beyond”) and then work back to determine what needs to be done now.
This framework emphasizes that the people, processes, and tools used today are a reflection of past needs and priorities, but are not necessarily the right approach for the future. By beginning at the end and working back, it’s easier to fully understand the gaps to be addressed.
So in general, a successful transformation to modern finance delivers on these three priorities:
- The ability to innovate at scale by institutionalizing change, not just executing once
- A future where humans are at the center and everyone acknowledges that, while technology has a role, it is ultimately the humans who put that technology to work
- Increased options driven by partnerships, ecosystems, and cloud computing, with generally a great deal more flexibility around implementation timelines and level of effort
Embracing a Modern Finance Mindset
A modern finance function is a strategic partner that is less inward-looking and more forward-looking, offering better forecasting, analytics, and ultimately, business insight. Finance can play a critical role in innovation by articulating the value of investments, developing strategic business analysis, and in some cases, driving internal venture-capital functions designed to advance innovation.
Modern finance will also make significant use of robotic process automation, artificial intelligence, and cloud computing, all of which have proved their value during recent events. Yet despite these technologies, digital confidence is rooted in human performance, so finding the right talent and engaging that talent is just as important as ever.
The need for new talent and new skills coincides with emerging operating and service delivery models driven by remote work. Ultimately, the entire operating model for Finance is starting to look very different, and the organizational model, as it reaches maturity, could look very different from traditional finance and accounting organizations as well.
All of these issues were and are present as McKesson embraces a modern finance mindset. However, these issues aren’t unique, and any company engaged in transformation will face similar challenges.
Overcoming the Challenges of Finance Transformation
Most noteworthy is that McKesson started its enterprise transformation in Finance and Accounting, and within this area, it started with the close process and the general ledger—the very core of the business. BlackLine software was a key enabler of this transformational shift, yet this implementation alone was only the first step of a broader journey.
Reimagining what people do and how they do it, how they leverage enabling technology, and how these changes come together to reframe the business around a future vision are the real challenges of building a modern finance function.
To learn more about leading practices from a Fortune 500 company that has transformed its finance function, join Ernst & Young LLP and McKesson for Modern Finance in the Digital Age at BeyondTheBlack 2020 at 1 pm PT on Wednesday, November 18.
This publication contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Member firms of the global EY organization cannot accept responsibility for loss to any person relying on this article.