Dive Brief:

• Automation is creating a finance and accounting skills disconnect, according to a report from Gartner released last week. The research firm identified the skills gap as the most pressing digital issue for finance leaders in its report of trends CFOs must be familiar with to prepare for the future.

• These top 10 trends are critical to the success of modern CFOs, whom they say often struggle to make sense of the many factors that impact their finance function and the wider organization today.

• The list points to artificial intelligence (AI) integration, robotics process automation (RPA) adoption, and generalized skill sets being the cornerstone of the modern finance department.

Dive Insight:

Gartner lists the following trends as most critical for CFOs to have future success.

1. Digital is creating a skills disconnect

With digital transformation rapidly becoming the norm, finance talent management strategies must evolve in lockstep. This will include revising competency models to address the digital shifts, which will inform recruitment, development, talent retention and career growth strategies.

"A lack of digital savviness in finance will impact an organization’s ability to make good decisions," Craig Wilton, Gartner advisory senior director, said in the report. "[CFOs] must understand how digital technologies interact with the corporate ecosystem, and also how to articulate bias and risk in machine learning."

2. Demand for decision-ready data

Currently, organizations often handle data in a rigidly regimented fashion, which often fails to aid decision-making. Instead, CFOs should make governance standard trade-offs to make their data more useful. 

This will require a "pragmatic mindset where governance principles can be loosened, where data can reside with its owner, and where highly governed data is presented alongside more intuitive sources," Gartner said. 

"Finance must optimize data for decision-readiness rather than accuracy and precision," Wilton added. 

3. (Re)centralization of finance analytics

CFOs will need to determine which types of analysis belong in which parts of the business, and then develop a scalable partnership model to facilitate them. 

To do so, Gartner recommends CFOs ask which decisions most need the finance team’s deep analytical support. Then, they should develop a partnership structure that optimizes analytical scale without undermining the partner relationship.

4. The AI revolution has begun

Wilton predicted in the 2020s, AI will optimize or transform "nearly every activity in finance." To be prepared, CFOs must self-educate on how the finance function may change, and, more specifically, explore the investments needed for AI deployment.

Wilton recommends figuring out answers to questions like, "How can I build a data infrastructure that can support AI?" "How do I develop or acquire the necessary skills?" and "Where are the low hanging fruit for me to deploy AI?"

5. A new era for ERP

CFOs must finalize standard, organization-wide global processes with real-time data and intelligent platforms. 

In doing so, finance leaders must consider how their team will operate in a real-time planning, budgeting and closing environment, Gartner said. "They must consider what new platform capabilities such as AI, machine learning and blockchain will mean, and how it can leverage these to improve actionable data insights."

6. Growing use of global business services

Conceptually, shared services have moved far beyond finance transaction processing and currently include value-added services across departments. CFOs should focus not just on cost reduction, but also on value delivery.

"Automation is reducing the need to chase labor arbitrage across the globe," Wilton said. "Finance leaders should think about how shared services can maximize value-added services, and how they will develop the necessary skills to do that."

7. Reporting goes on-demand

Financial reporting expectations have evolved, which has increased pressure on the finance team to deliver real-time reporting. Additionally, stakeholders now demand real-time access to finance data and advanced analytics, and will continue to do so in greater measure.

The onus is on CFOs to make this a reality. Gartner encourages asking: what technologies will enable finance organizations to deliver on-demand reporting? How should data be governed as reporting expands to integrate financial and non-financial data? What skills will finance leaders need to deliver on-demand reporting?

8. RPA is putting internal controls at risk

RPA’s efficiency and potential have already spurred widespread adoption in the finance department. It’s crucial CFOs not allow themselves to be blinded by its many benefits, however. Occasionally, RPA robots are deployed without prior knowledge of internal control teams, causing unknown reporting risks.

Finance teams must efficiently balance RPA and digital tech governance, and think about how they can track RPA use cases for their impact on internal controls.

9. Cost scope is harming efficient growth

According to Gartner, since 2014, corporate cost growth has outpaced revenue growth by 1.8 times.

"CFOs must know how their costs compare to peers, identify how to adapt their cost structure to outperform peers and drive change across the organization to pursue targeted growth bets while eliminating value-destroying projects," Wilton said.

10. Unlocking growth through supplier innovation

As organizations come to rely on their suppliers for key capabilities, and continue working with even more suppliers in varied capacities, they must leverage key relationships to strategic and competitive advantage, as well as to contain risk, Gartner says.

Encouraging procurement teams to have an innovation mindset when dealing with suppliers can lead to important new growth opportunities, Wilton said. "It’s also important to understand whether suppliers prioritize you over other organizations."