Why CFOs need to rethink their reporting and operating models

Finance leaders need to tap opportunities for innovation that can help align to new and open operating models, and drive long-term value.

In brief

• Clear understanding of targeted business interventions will help finance leaders proactively provide data-based operational insights.
• AI-powered forecasting can help finance leaders generate predictive insights and reduce margins of error.
• CFO and finance leaders need to keep abreast of the constantly changing legislative and regulatory environment.

One of the prerequisites of working in a disruptive market is to design a more open finance operating model that is dynamic in nature. CFOs are reassessing gaps in their current target operating models and rethinking their reporting and forecasting capability to future-align it. The transformation of the operating model is no longer an option, it is an imperative.

The finance leaders are working on strategies that can help the operating models reorient to the new platform-based virtual markets that connect buyers and sellers in a seamless way. Where machines can transact autonomously with other machines and with people directly, where everything can be connected to everyone in a new, hyperconnected reality.

Riding the crest of the innovation wave

There is need for a balancing act, no doubt. To design a well-calibrated finance and reporting operating model, CFOs should:

1. Define priorities around cost-efficiencies.
2. Unlock opportunities for innovation and efficiencies that can drive long-term value.
3. Prepare a roadmap for risk management.

Since the outbreak of the pandemic, automation of manual finance processes has allowed finance teams to concentrate on higher value-added activities. What has really emerged as an important area to focus on is the future of forecasting. AI-powered forecasting can help finance leaders generate predictive insights and reduce margins of error.

As expectations from the finance function grow, there will be need for instant forecasting and in real time. To build a better view of the future, organisations will not just have to build a culture of innovation, but also create the right ecosystem strategy to use technology and data differently.

In the coming years, finance teams will have to open themselves up to new ideas that help them to work as part of an extended ecosystem and bring higher collaboration both within and outside the organisation. In the journey from “running” finance functions to “driving” high-value finance services, CFOs and senior finance leaders need to increasingly focus on:

• Partnering with external parties to provide finance processes or activities that require specialised technology or knowledge.
• Embracing data ecosystems could prove important as organisations look to share business information across internal boundaries.
• Getting people with the right skills, giving them a career path so that they can be retained, and attracting in-demand talent.
• Keeping abreast of the constantly changing legislative and regulatory environment.

Transformation in operating models may create opportunities for finance-as-a-service. To future-proof the operating models and in order not to feel the strain, finance functions will need to build cross-functional teams. A clear understanding of targeted business interventions will help finance leaders proactively provide data-based operational insights that can drive value creation at scale.