Digital paves the way for simpler and smarter Finance

09 February 2016 Consultancy.uk

How will the financial function change once the monthly closing process starts taking place virtually? How do we deal with a forecast that is constantly being updated? What happens if Excel become superfluous?

The world is changing at a rapid pace and our society is increasingly becoming faster and more digital. This digitisation has given rise to large companies like Airbnb and Facebook. This development has pulled the rug from under traditional sectors like logistics and financial services. Organisations must formulate an answer to these rapid and significant changes in the environment. Pages Jaunes in France has opted for an entirely new business model, various banks have simplified their operational process and retailers are focusing their attention on customer behaviour and experience.

Going digital entails numerous challenges when it comes to unlocking data, information requirements and financial decision making. It also offers opportunities in terms of efficiency, risk management and value creation, however. ‘How, as CFO, do you respond to the challenges and cash in on the opportunities offered by digitisation?’ ‘What implications does this changing world have for the role of Finance?’ Digital Finance provides an answer to this.

Chief Financial Officer

The seven certainties of the financial function
In our view, the foundation of the financial function consists of seven certainties. These certainties constitute the basis for the many new possibilities offered by Digital. Curious about what these seven certainties are? The CFO will always be the [1] financial conscience of an organisation and he must remain a [2] reliable partner into the future. In order to be able to safeguard this reputation, the CFO will also have to remain [3] in control in the new digital world. The organisation must be able to rely on the [4] accuracy and correctness of the financial reporting and decision making. The CFO must ensure financial [5] continuity in order to guarantee the growth and innovation of the business. This continuity can only be realised by maintaining an optimal [6] relationship with investors and other stakeholders. The last certainty of the financial function is the permanent [7] compliance with legislation and regulations. Actions must at all times be in accordance with laws and regulations.

Finance Operations
Because of the digital transformation, we see Finance’s core processes developing strongly in the direction of automation and cloudification. Whereas tasks and processes used to be outsourced, everything is now being automated in-house, or even robotized in some cases. In cash flow management, forecasting and monthly closing, we see that everything is moving towards cloud applications. This transition has an enormous impact on how work takes place. By gaining insight into how these core processes are developing, an organisation can take steps and transform together with its customers and society. What if the financial closing can be realised with one push of a button? What are the implications for decision making if my day-to-day S&OP planning is translated directly into an up-to-date forecast? How, as CFO, do you monitor the validity of decisions when management takes place on a day-to-day level?

Capgemini Consulting - Digital Transformation

Finance Insights
Being able to deal properly with data & insights, scenarios and real-time planning gives organisations a competitive advantage. This advantage enables them to operate more efficiently and better satisfy customer requirements. We see that at many organisations, there are big data initiatives that go beyond the financial function, however. We believe that the CFO must steer and give structure to these initiatives. Digital Finance also demonstrates that significant efforts must be put into data enablement, as well as into digital performance management and mobile reporting. Organisations must become data-driven, so that performance management can be set up much more digitally. As business manager you should be able to do your analyses and comparisons from the comfort of your home, glass of wine in hand. Digitisation and mobile go hand in hand. Mobile devices rule the world and the financial function must keep pace by facilitating the organisation with digital reports, forecasting and communication.

Digital Transformation
The CFO cannot hang back in giving an answer to the digital transformation of companies. Information must be faster, personalised and more secure. Digitisation helps with this. Digital Finance shows that we are growing towards a financial function that is ‘Simpler, Smarter and Safer.’ The first thing that is needed for this is a clear vision on Digital Finance from the CFO. This vision must inspire and reform. How are you going to realise this vision as CFO? How do you find the support to move your community forward in the reforms? Finally, the required skills and staffing of the future organisation must be examined. We advise CFOs to make a start as soon as possible on preparing their organisations for Digital Finance.

An article from Jaymi Cornelisse, Managing Consultant Finance & Performance Management at Capgemini Consulting, and Jasper Smink, Senior Consultant Finance & Performance Management at Capgemini Consulting.

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