CFO Balancing Act

“Where we work” meets “how we work” in a redefined Finance workplace

While public speculation on return-to-the-office questions focuses on timetables or transition issues for remote employees — “where we work" — our ongoing marketplace conversations with Finance leaders suggest “how we work” may be just as significant.

During the past 18 months, while attention riveted on dramatic disruption, back-office work processes went through their own silent revolution, paced by steady developments in data and analytics, extreme automation, and cloud. Chief financial officers (CFOs) are very aware of the fast-moving state of play. Now, as they consider virtual, hybrid, or on-site work models, the smartest among them are also thinking ahead, asking how they’ll navigate the ripple effects of continued digital acceleration — on workflows, teams, strategic agendas, and even the future role of Finance in the enterprise.

Despite the chaotic conditions that prompted dispersed workforces, many CFOs report pleasant surprise at how nimbly and effectively their Finance teams performed under duress, with touchless or near-touchless closes a commonly cited example. The unexpected achievements reset expectations and catalyzed visionary questions about additional digital possibilities such as footprint flexibility, workflow efficiencies, and value delivery.

Emerging paradigms

Because every business is unique, the digital target-state for any given Finance organization will also be unique. That said, we are seeing an emerging consensus around a next-gen Finance paradigm, built upon six dimensions of envisioned digital enablement:

Strategy and Value Management: Foundational strengths will remain clustered around business resilience and liquidity management, now combined with newer emphases on value creation through growth or innovation. As a strategic partner to the chief executive officer and Board, the CFO’s portfolio will expand to include traditional chief operating officer arenas.

Extreme Automation: Leading Finance organizations will continue to invest in a target-state of end-to-end process automation, low code development, machine learning, and cloud migration. Process redesign or streamlining will help CFOs deliver faster closes, real-time performance transparency, and dashboard-accessible reporting.

Data, Analytics, and Forecasting: Finance will take the lead in merging high-quality internal data flows with external market-signal streams, to fuel more robust and accurate forecasting. As the key steward of critical insight to both the C-suite and investor communities, the CFO’s profile as strategic adviser will expand.

Operational Agility: Finance models will morph and CFOs will balance core functionality with adaptability to multiple economic scenarios, using forever-virtual and hybrid delivery models that can scale as needed.

Modern Workforce: With Finance talent freed from routine manual tasks by process automation, CFOs will design new employee value propositions, based on upskilling or reskilling, digital literacy, higher added-value activity, and location-agnostic teams.

Risk and Compliance: Risk will transition from a purely back-office function to embedment across the business. Through the CRO, CCO, and CISO functions, CFOs will prioritize Cyber resilience, regulatory effectiveness, and value preservation capacities.

Holistic consideration

Finance leaders tell us they have a daunting surplus of tactical digital options to consider. What they don’t have is time: The general reset of assumptions has only increased the stakeholder expectations they face. To meet them, CFOs need roadmaps that meet them where they are right now and can take them to tangible results quickly.

With the clock ticking, these same leaders indicate they welcome holistic perspectives that meld business process insight, Finance function savvy, and implementation experience. In addition, they want help with “soft” factors of successful digital adoption, which can’t be underestimated in this transitional period, when employees are questioning their own goals and preferences. CFO know redefined work will impact skills and training, culture and behavior, roles and incentives, and retention of key talent.

Building the roadmap to a digitized finance workplace

While digitally reimagined work has already delivered noteworthy impact, it’s important to remember that we are only in its earliest stages. Like other technology maturity cycles we’ve witnessed, this one will unfold through predictable if uneven stages — paced by frontier thinking and early adopters, followed by rounds of improvement and widening use, and arrival at eventual saturation and acceptance as standard practice. CFOs who want to get ahead of the curve are asking:

  • “Where does my Finance organization stand in relation to peers, on matters of digital adoption?” The question implies willingness to frankly assess current-state readiness for initial digital process transformation, as well as organizational capacity to absorb continuous change.
  • “How do I adapt the digital innovations pioneered by recognized Finance leaders to my own circumstances?” To leapfrog generic challenges that others can or have solved, CFOs are considering accelerators, including pre built “plug-and-play” digital solutions and managed services subscriptions.
  • “How do I frame the business case for investment in reimagined work”? Strategic clarity, defined target states, and accelerated paths to value will remain critical to securing stakeholder buy-in and executive sponsorship for change. Must haves: Investment in training, professional development, and change-management.

CFOs know they’re operating in a once-in-a-generation inflection point. The past 18 months have sharpened the gap between digital leaders, who are pulling away from competitors in what seem to be winner-take-all scenarios. In the next three to five years, we expect to see the same divide in Finance, between CFOs holding fast to legacy mandates and those who see digitized work as their opportunity to recast Finance as a growth and innovation enabler to the business.

Sanjay Sehgal

Sanjay Sehgal

Head of Markets, Advisory, KPMG US

+1 216-875-8113

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CFO Balancing Act
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