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Finance Disrupted: How to Prepare for What Comes Next

Mar 6, 2019

Spurred by technology advances, the speed of disruption in organizations is perpetually fast—and only getting faster. From advanced analytics enabling better decision-making and forecasting accuracy, to extreme automation challenging existing delivery models and helping break down functional silos, the finance function will be radically different in 10 years.

Below is a sneak peek of KPMG’s hypotheses for the future of finance.

  • • Proactively leading enterprise performance: The chief financial officer (CFO) is  the only position in the company with both the permission and the duty to integrate strategy, finance, and analytics. In addition to owning and organizing all financial data, finance can take responsibility for the quality and governance of other data as it impacts enterprise performance—including which data is used, how to ensure its reliability, and how to structure it.

    Managing and measuring enterprise performance and value contribution will be a top priority for CFOs of the future. They will be expected to unite their organization towards one goal: understanding inputs, perspectives, and challenges in order to drive the right strategic decisions for both investments and growth.
  • • 70 percent less labor: As routine activities such as regulatory reporting or accounts payable become highly automated, labor requirements are expected to decline significantly. In fact, KPMG estimates that extreme automation will help achieve a nearly 70 percent reduction in labor.

    However, the automation of other areas of finance—such as reporting and planning—may result in an increase in the number of humans who will work with intelligent automation to provide strategic insights to the business.

    • Increased speed of insight: As the speed of disruption increases, finance also must move quickly. Luckily, in the future, the data for predictive and prescriptive analytics—along with the descriptive and diagnostic measurements used for financial statements and operational reporting—will become fully automated, improving speed to insight.

    New technologies will extract data in real time from multiple systems and publish it straight to user-friendly dashboards that are available to the business for collaboration, analysis, and better decision-making.

    • Improved forecasting accuracy: Forward-thinking CFOs are quickly realizing that the finance function must broaden its vision and scope from traditional financial planning and analysis to business planning and analysis—with a clear link to strategic and operational imperatives. These leaders are emphasizing a forward-looking mind-set while keeping an eye on how business drivers affect current-year targets.

    What’s more, in the service delivery model of the future, finance will use automation to extract internal data from cross-functional systems and combine it with external data related to competitors, economic factors, emerging regulations, and more. Using this data with advanced analytics, finance will deliver much more accurate and continually refreshed forecasts in a fraction of the time.

HOW SHOULD CFOS RESPOND?        

Today’s rapidly changing business environment requires finance to address disruption head-on or risk being left behind more nimble competitors.

Leading CFOs are focusing on leveraging disruption into opportunities for competitive advantage and growth while also improving their delivery of products and services to their stakeholders. Experience shows that CFOs are deriving specific benefits for their companies by focusing on six key areas.

Attend our FinNext 2019 session, “Finance Disrupted: How to Prepare for What Comes Next,” on March 18 from 1:15 p.m. – 1:45 p.m. to discover the six key areas that make up the CFO’s agenda for disruption.

Brett Benner
Managing Director, Financial Management
KPMG LLP

Brian Mace
Director, Advisory, Financial Management
KPMG LLP