Industry Analysts’ Take on F&A Priorities

Accounting and Accounts Receivable articles

July 25, 2024

This is a blog post from our partner BlackLine, highlighting the top three F&A priorities according to analysts at The Hackett Group and ISG Ventana Research.

As automation technology continues to permeate the business accounting landscape, finance and accounting (F&A) leaders are increasingly tasked with navigating complex challenges and driving strategic initiatives.

BlackLine hosted a panel with leading analysts to discuss the current F&A landscape. Here are the most significant developments for accounting professionals to watch.

AI: Bridging the Gap Between Perception & Reality

Artificial Intelligence (AI) has captured the imagination of finance leaders, promising transformative capabilities. However, a disparity exists between the perceptions of CFOs and the expectations of corporate boards.

While CFOs are optimistic about the potential of AI in F&A, boards often seek tangible results and ROI. It’s crucial to distinguish between realistic AI applications and fantasy to harness its true potential in finance operations.

Here’s a picture, painted by a leading analyst with the Hackett Group, of how CFOs are facing increasing pressure from board members regarding the usage of AI. “CFOs have told us that, at least initially, their intention was they didn’t see a need to go into AI, but the boards are asking them questions. What is AI? Have we assessed it? What is that going to do for us operationally? What’s it going to do for the top line? What’s it going to do for cost?”

While board members inherently tend to look at the bigger picture regarding AI implementation, such as cost, there are also very specific demands increasingly being placed upon F&A teams that AI can help accomplish.

“They, in essence, are telling CFOs very clearly that what I need from the finance organization are things like the ability to forecast predictive analytics, driving value, and what if modeling for various scenarios.”

One of the key considerations is talent. As AI reshapes the F&A landscape, investing in talent development and cultivating a workforce equipped with both financial acumen and technological prowess is essential. This blend of skills is integral for leveraging AI tools effectively and driving innovation in finance functions.

Talent & Career Development: Embracing Change

In the era of predictive AI and process automation, talent development takes center stage in F&A organizations. As accounting transforms into a tech-driven domain, there’s a growing emphasis on making accounting careers appealing and engaging.

Analysts highlighted the importance of continuous learning and career advancement opportunities to retain top talent. A noteworthy quote from an analyst underscores the evolving expectations of finance professionals: “If I don’t get a skills-enhancing opportunity every six months, I’m leaving.”

This sentiment emphasizes the need for organizations to prioritize career development and provide avenues for skills enhancement.

For more insights on talent management in the digital age, check out our guide on unlocking the power of talent management.

Value Delivery: Moving Beyond Efficiency

Efficiency is a critical metric for F&A operations, but true value delivery goes beyond mere productivity gains. Analysts advocate for a shift from efficiency to productivity—a mindset that questions the necessity of tasks and seeks to eliminate them altogether through technology and process improvements.

An executive director of ISG Ventana Research made an interesting observation when contrasting productivity with efficiency. “It’s one thing to talk about being more efficient, and I think a lot of senior finance people in the old school, they just think in terms of efficiency, which is if it’s taking seven minutes to do this, we should be getting it down to five minutes.

Productivity asks the question: why are we doing this in the first place? So, it’s a way of using technology to get rid of having to do tasks in the first place. And that is both from automating things, which we’re familiar with, but there’s also the notion that if you fix a problem upstream in a process, nobody has to fix it on the downstream.”

Four Strategies for Addressing F&A Priorities

To effectively address the top priorities outlined by leading analysts, F&A departments can implement strategic initiatives aimed at building resilience, fostering innovation, and driving value creation. Here are some actionable strategies.

Create a Culture of Continuous Learning

Investing in talent development is essential for building a high-performing F&A team. By fostering a culture of continuous learning, organizations can empower employees to acquire new skills, stay updated on emerging trends, and adapt to evolving technologies. Additionally, identifying and developing technology evangelists within the F&A team can facilitate the adoption of innovative tools and processes, driving efficiency and productivity gains.

Leverage Technology for Operational Excellence

Harnessing the power of technology is crucial for enabling real-time, touchless, and efficient finance operations. By leveraging automation and digital solutions, F&A teams can streamline processes, strengthen internal controls, and drive continuous improvement.

Implementing a real-time/touchless/one-day close approach can significantly reduce the time and effort required for financial reporting, enabling F&A professionals to focus on value-added activities such as strategic analysis and decision-making.

Build a Robust Data Foundation

Data is the lifeblood of modern finance operations and building a robust data foundation is paramount for success. By consolidating and centralizing financial data, organizations can provide F&A teams with access to accurate, up-to-date information for forecasting, predictive analytics, and decision support. This data-driven approach empowers F&A professionals to make informed decisions and drive business performance.

Understand AI & Its Implications

AI holds immense potential for transforming F&A operations, but it’s essential to fully understand the technology and its implications. Organizations should differentiate between generative AI (genAI) and specific AI applications and identify use cases that align with their strategic objectives.

Moreover, it’s crucial not to view AI as purely a productivity tool but as a catalyst for innovation and value creation. People remain a critical piece of the AI puzzle, and investing in talent development is key to maximizing the benefits of AI in F&A.

This blog post was originally published on the BlackLine blog.

Author

Revelwood

View all posts