Shaken not Stirred

This dialogues from the Bond thriller, best describes the hard-pressing reality for the Finance leadership in todays world.

Conventional Reporting is not something, the finance leadership can take comfort in anymore. Nearly a decade ago technology just changed the game forever for all of us. Probably, the introduction of smart phone redefined convenience ushering a new standard of Expectation. With quick not being quick enough and easy not being easy enough. The perception and expectation have changed and the difference is night and day.

The Internet and more importantly open source have been influencing the finance world in a multi-dimensional way which also is known for convenience as Democratization of Data.

To understand this phenomenon, we need to understand things outside of Finance world that have been influencing, the daily lives of our stakeholders. If you sit back and view the landscape change, in the last decade or so, we have had phones become from mere a communication device, to a utility device. The apps have redefined the way we look at all the things. Running household errands to hailing a cab to watching a movie to educating oneself to health and exercise and the list can go on. The application of technology and data evolution is such that today we have all industries and org planning their strategies around it. The impact on our lives has been so dominant that, it has changed the way we perceive things to happen. Essentially the difference between a successful and unsuccessful change management, is that how well has the expectation been understood and mapped in order so that the solution being addressed to that.

So, taking a step further what is the expectation that the average user of Financial information has. Of course, the list of expectation can be endless but revolving around 3 themes.

* Convenience
* Timeliness
* Accuracy

And how technology has impacted the DNA of these traits that finance has to embed them into itself.

Convenience got redefined in a manner no one imagined. Talk about not just hailing a cab but tracking it moment by moment or ordering grocery to get an online doctors’ consultation. Today we have octogenarians using video calling apps and operating via WhatsApp. It could be paying for a glass of tea, via a payment wallet or getting an loan in less than 5 minutes via an app. Hence, the general expectation from an experience standpoint of a task has changed tremendously. Today the expectation from the financial reports/mis’s is that they convey information in a manner that is easy to consume and tell them what to do next. Management and every user of information is expecting the same seamless experience that they are accustomed to from rest of the world. They want information at the finger tips, when they want it and in a simple manner. In fact, lot of organization have moved the MIS report to include via an app where in the top management receives the daily update of milestone and accounts being updated Realtime. This enables the management to make decision on the go.

The convenience of being on the top of things and being more so in control of the information is a predominant need.

The second theme that had an overarching impact is timeliness. Timeliness is no longer defined as, on a given time and a date, but instantaneous gratification of informational needs.

Imagine what it would be for the Sales team to know while pitching a deal, on the best price that he can give while having a luncheon with the customer. That is the shape and form of expectation from the Finance team in helping the other functions. Gone are the days wherein people had the patience for waiting it out till month end and teams would compute and conduct discussions on how the commission payout has been calculated and then with the back and forth in e mail it just sounds cavemen days in today’s terms.

The third theme is accuracy. Today not only is the information needed at a lightning speed and one’s convenience, but it also has been be precise. This on the face of it seems like an age-old requirement with finance, but traditionally there were always gaps and finance had its own reconciliations and justifications. Today the systems have to talk amongst themselves. The speed at which information is reported have to be precise to the T’s cross and I’s dotted. The phenomenon of everything getting blown out of proportion on social medial has every org thrown into a jittery. Imagine an employee getting a wrong salary credit and a comment of LinkedIn about the company’s payroll system being laggard. It is any company’s nightmare to manage any mess on any media and this needs preparedness. The information that is being released is open to a million analyst and virtually any prior information being pulled the or has to be in sync with all that has been told and held back.

Well, till now we have been talking about the easier part which is defining the problem. The harder part is understanding how can finance as a function address these. Of course, it’s easier said than done. Technology has to be at the core of it and finance has to evolve itself so that technology is not used as a tool but in its basic DNA to alter and change. There are 3 challenges here that has kept the Finance function from a complete transformation.

* Adoption
* Learning
* Agile

The finance function has traditionally been viewed with a reluctance in adopting anything nascent or new. Hiding under the garb of Data being critical, statutory reporting etc. It’s time that the community has to come out and accept that adoption of new technology like AI, blockchain, Automation is not a ask but a basic survival from hereon. Success of the function will depend on how much are they able to leverage these.

The second unsolved saga is of Learning and development. It’s no news that the usually the L&D is conventionally low in the finance teams. This also has been driven by the fact that usually in Finance, experience was considered a solution to most problems. So, if an organization was growing, the quick fix was to get an experienced CFO. This is a diabolic problem that we all have to face. At one end we have AI, automation simplifying things and reducing the human interface and other we have to invest in our skillset and people. This makes the current structure of the team more redundant and the need for training is ever more. Just to quote an example treasury function was not only held and managed by complete manual efforts, imagining replacing this with digitization was a nightmare.

Today there are solutions that automate your treasury function. Of course, in the current state of affairs you need few souls to man the system but with increase in AI, the dependency may be lessened.

Lastly finance teams have been accustomed to what was known as specialization, hence each team building its own silo. This has rendered the individuals specialist in their own area. With the sea change in approach of doing task the workforce is finance needs to be agile. Ready to change itself, as per the need of the hour.

The solution to all of this, is that the workforce needs a paradigm shift in its style of working and structuring. The workforce diversity should include technology folks, analysts etc. We need members who are able to look at the data dispassionately and structure a solution. The conventional model of working needs to be challenged internally so that we rise up before the challenge is external. Instead of viewing technology as a disrupter the community needs to work on it as an enabling tool to grasp with the new realities. The cape of technology has wrapped every function, the Finance leader of tomorrow needs to be technology native first before being able to lead.