What’s the most important quality a finance team needs to succeed in the digital age?
What are attributes essential to helping finance achieve more influence within the business?
What’s the most important benefit of cloud applications in the digital age?
These are three important questions that finance teams are asking themselves. They came to the fore in the recently published AICPA research, Agile Finance Revealed: The New Operating Model for Modern Finance. The research found that agile finance teams share three major characteristics:
1. Greater efficiency through automation
2. Better information to predict the future
3. More influence to drive business outcomes
The results of our informal poll indicated that finance teams are eager for more agility and that one particular element of the new operating model is top of mind for them.
By a wide margin, the majority of respondents chose “Better information through advanced analytics” as the most essential element of the new finance operating model. This outcome dovetails with our own experience as we conducted the research: Finance teams are hungry for more information and analysis, so that they can make more informed recommendations about where the business should go next.
One reason finance teams want the ability to make these recommendations is that they see it as an opportunity to increase their own influence and stature within the business. This is borne out by the responses to our next question:
The majority of respondents felt that the ability to provide “forward-looking analysis to identify new revenue growth opportunity” was the most important attribute a finance team could have when it comes to influencing better outcomes for the business. This is in line with our findings that CFOs are increasingly seen as the “copilot of the business” along with the CEO. Better analysis—and, more importantly, better recommendations based on that analysis—naturally leads to more influence.
One surprise was that “mitigating risk” was seen by our audience as an important attribute for influencing better business outcomes—more important than identifying and measuring the intangible drivers of business value. This indicates that finance teams still see the traditional responsibility of “risk avoidance” as an important part of their jobs, despite (or perhaps because of) the changes and uncertainties brought on by the digital economy.
Adjusting to the Pace of Digital Change
The rapidly changing shifts of the digital age weigh heavily on the minds of finance teams. When considering the benefits of cloud-based finance applications, more than half of respondents felt the greatest benefit came from the flexibility the cloud provides to change and improve the operating model when the need arises:
In an era where new business models are springing up almost overnight, and new players can enter the field from any corner, finance teams recognise the importance of being able to rapidly shift gears to respond to new market conditions. This is where they see the biggest benefit of cloud applications.
Aspiring to Drive Revenue Growth
In one of the most important outcomes of the AICPA research, we found that businesses with agile finance teams were significantly more likely to achieve positive revenue growth: 89% of organisations with agile finance teams reported positive growth, vs. 63% of those with non-agile finance teams. These numbers indicate that finance can not only make an accounting of a company’s wealth but actually drive it.
When it comes to influence, positive financial results have the greatest potential impact on a CFO’s continued ability to lead, guide, and act as copilot of the business.