Finance 2022: The time for talent

21 December 2021

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Talent development efforts were curtailed by COVID-19, but they should be a key priority for organizations now.

The past two years have been a unique experience for finance and accounting professionals: the emergence of a global pandemic in less than a month; moving from an office-based to remote working environment almost overnight; almost-instant cessation of global trade; disruption of supply chains; a revolution in the business models of multiple industries; the development of effective vaccines at unprecedented speed; and a rapid economic recovery in many markets. Yet despite all the turbulence, the books continued to be closed, balance sheets for many remained strong, technology adoption in finance accelerated, and finance professionals continued to shift from manual accounting work to technology-enabled analytics. The adaptability, resourcefulness, and resilience of the finance profession was yet again demonstrated. So, what should finance leaders be focusing on in 2022 and beyond?

A new talent agenda

At the heart of the transformation wrought by the pandemic and its effects sits the finance and accounting professional. The speed with which finance teams were able to reshape budgets, retool forecasting processes, conserve cash and capital, and adapt to remote working while also sustaining ongoing accounting operations has created a strong platform for the next wave of finance transformation. In fact, Accenture reported in February 2021 that 79% of CFOs surveyed said the effects of COVID-19 have compelled them to ramp up their finance transformation efforts.

We have seen technology adoption increase as organizations have used new tools to help them operate in a disrupted world. However, one area has largely been neglected. Despite the scale and scope of change endured over the past two years, many organizations have had little ability to invest in effective talent development. Almost all on-site training was rapidly cancelled, remote programmes were slow to ramp up, and valuable one-on-one coaching and mentoring moved to a less-than-satisfactory virtual model. Even if such programmes were available, few professionals had the time to participate. In addition to their schedules being disrupted by working from home, including in some cases overseeing their children's remote learning, they also worked to constantly reforecast as they dealt with the impact of local virus strains, lockdown rules, vaccination rates, and government stimulus programmes.

The biggest risk for finance and accounting teams going forward is that business models, working practices, and technologies have fundamentally changed without any corresponding investment in equipping talent to sustainably operate in the new, uncertain world.

It's not just the pause in talent development that has dangerous implications for the future, it's that the skills needed to be successful in a post-COVID-19 world are different.

As the pandemic took hold in early 2020, many finance teams were already adapting to changes unleashed by digital technologies. Robotic process automation, artificial intelligence, machine learning, advanced analytics, data science, visualization, blockchain, and other emerging technologies are transforming the work of the finance professional. Manual work is not just being automated but eliminated or reduced to a minimum; reliance on spreadsheets as the sole analytic tool is reducing; calendar-driven processes are being replaced by event-driven processes; and compliance-and-control activities are moving from being largely detective in nature to a balance of preventive and in-process methods. Taken together, these changes demand a reskilling of the whole finance organization. Finance education needs to be retooled to be fit for purpose in a post-COVID-19, digitally enabled world.

Educational institutions need to reshape curricula to equip graduates with an understanding of how accounting and finance theory is applied in the for-profit and not-for-profit worlds. This needs to include newer disciplines such as data science, data governance, analytics, and a stronger emphasis on finance's expanded role across the enterprise.

Professional bodies need to develop not just technical accounting skills but also equip professionals with the communication, collaboration, and deductive skills needed to clearly explain financial performance and recommend alternative courses of action in the context of an enterprise's overall strategy and market position. Audit skills need to be less procedural and more risk-based, extending across an organization's ecosystem no longer limited by organizational boundaries.

Career development for finance professionals needs to expand to include greater cross-functional teaming, use of scenario and risk-based techniques for planning and investment evaluation, and rotational roles across lines of business, functions, and geographies. Long-term remote working will require rethinking mentoring, supervisory, coaching, and performance-evaluation methods.

5 areas of increased focus for the finance professional in 2022 and beyond

From task execution to process management

Instead of processing transactions, finance and accounting professionals are moving to managing automated accounting processes ensuring efficient execution, data governance, and change management (remember, the optimal number of manual journal entries or account reconciliations is zero). Instead of focusing on micro-tasks such as matching, reporting, and budgeting, more time needs to be spent on managing the overall finance and accounting architecture to adapt to new business needs, changing market conditions, and expanding regulatory and compliance requirements.

From lean to optimized

For many years, the objective for managing operating expenses and supply chains was low-cost and lean. For many this led to complex global sourcing strategies, just-in-time inventory management, and zero-based expense management. The negative impact of such policies was illustrated by bare supermarket shelves, dealerships without cars, and rising expenses to cover unexpected staff and shipping costs. Companies are already looking at restructuring their supply chains to increase resiliency without fully sacrificing the benefits of low-cost and lean. Finance has a crucial role to play in assisting the business in analyzing the trade-offs across expense budgets, supply chains, and associated working capital.

From analytic experimentation to analytic management

It sometimes seems that no matter what the business problem, the answer today is analytics. The result is that over the past five years, analytic experiments have proliferated. Often such experiments operate outside established data, technology, and governance processes that have been too restrictive or simply too slow to adapt. The good news is that many of these experiments have delivered real value in short order, making clear the business rationale for embedding analytics in the DNA of business.

It is time to take control of the analytics wave. Embedding analytics in the fabric of strategy, planning, operations, finance, and overall decision-making in a planned and coordinated manner is essential to realizing long-term value. Finance teams are perfectly positioned to understand the balance between speed and discipline, having addressed the same trade-offs in core procure-to-pay, record-to-report, and order-to-cash processes. Moving from analytics experimentation to an analytics culture will be a high priority if the value of ever-increasing data availability and advanced analytic tools is to translate into profitable growth.

From enterprise to ecosystem

During the pandemic, the boundaries of the organization have moved from the office to many employees' living rooms or kitchens. More importantly, no organization operates in isolation. The ecosystem of customers, suppliers, employees, shareholders, lenders, regulators, and other stakeholders needs to operate harmoniously. Imagine how valuable Google or Amazon would be without broadband technology supplied by phone or cable companies. As the pandemic showed, those organizations that did not only adapt their own business but also aligned elements of their total ecosystem to a new model were most successful. From restaurants establishing delivery or kerbside takeaway services to personal trainers delivering workouts over Zoom, ecosystems were redefined. Going forward, finance needs to take an expanded view of how an enterprise creates value and, perhaps more importantly, where business risks reside. Recent examples include third-party data breaches, supplier use of child labor, product provenance, and carbon emissions, all of which have a significant financial impact.

From technology to talent

It seems that the past 25 years have been a series of technology-led finance transformations: enterprise resource planning, data warehouses, e-commerce, and digital. Now as the level of automation of standard finance and accounting work nears 100% even for the smallest organizations, the differentiator in performance will be determined by talent, not technology.

World-class finance teams will be defined by their ability to attract top talent; develop, motivate, and retain that talent; and most important, continuously invest in that talent in terms of skills, competencies, tools, technologies, and experiences.

The events of the past two years have created a once-in-a-lifetime opportunity to reinvent finance — let's not squander the opportunity. As we move into 2022, it's time to define and implement a coherent finance talent strategy that positions our most valuable finance resource — our people — for success.

Source: fm-magazine.com