Let's create the Agile Finance Function, shall we?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
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Want to know what the modern Finance Function looks like - and, in fact, how it's already organized in businesses around the world?
"Machine-learning and robotic systems will ruthlessly automate many routine businesses, freeing up your finance team to spend 75% of its time on decision support and predictive analysis, guided by artificial intelligence and input from statisticians, data scientists, behavioural economists, and even anthropologists."
That's the view of leading analyst David Axson, as reported in the AICPA and Oracle's landmark report Agile Finance Revealed.
Depending on the current state of your organization and its predisposition to change, this view of the Finance Function might sound like science fiction - or, more likely, it might sound increasingly familiar. The new operating model for Finance is being birthed right in front of us, although its progress is not yet evenly distributed.
Reorganize or die
Change is imperative, as opposed to an option. The benefits of the modern Finance Function are well-documented, and the downsides associated with sticking to the old model are many and serious.
This series is looking at the practical work that needs to be done to get to Finance Function 4.0. One of the most important such steps is a complete rethinking of the way the function is organized.
Agility is the name of the game. The Finance Function itself must be agile, but it must also be structured in a way that supports the agility of the organization as a whole. Mirroring the explosion of SaaS, cloud-based technologies, and practices of decentralization, the new operating model for Finance makes use of distributed and shared services as opposed to relying on proprietary or 'vertically-integrated' systems.
In practice this means:
Every link connected
This three-pronged approach can be summed up in what we might call the creed of the business partner: led by humans, augmented by technology.
By adopting this principle we can create and solidify a new, fully-integrated Finance value chain dedicated solely to the creation of value for our stakeholders.
Reorganizing a Finance Function (or indeed an entire business) is a significant program of work. Start by taking an audit: how close is your current way of organizing to the three-pronged approach presented here? Then check back for the next articles in this series, in which we'll be exploring the practical steps you need to take to future-proof your Finance Function.
This was the third article in my new series "The Finance Function of the Future". You can read the previous articles below.
While you await future articles you can read my latest series about the "Data to impact journey" below.
Continue reading below for more articles about trends in finance and accounting.
Anders Liu-Lindberg is the co-founder and a partner at the Business Partnering Institute and the owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 11,000 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 120,000+ followers and 200,000+ subscribers to my blog. I am also an advisory board member at Born Capital where I help identify and grow the next big thing in #CFOTech. Finally, I'm a member of the board of directors at PACE - Profitability Analytics Center of Excellence where I support the development of new analytics frameworks that can improve profitability in companies around the world.
Startup CFO | Founder of Point | Using finance to start, grow and scale companies from day 1 to exit
1yAs someone who has worked with CFO's of more mature $1B+ businesses as well as many younger (5 years or less) companies, I can tell you for fact that the speed in which both move are vastly different. It would greatly benefit the more mature companies to take a page out of the younger company playbook. Problem is most later-stage CFO's are very risk adverse.
Helping Finance Managers of ‘busy’ SMEs improve profits | Turnaround 'busy' loss-makers | Improve profits of the already profitable | A proven step-by-step process | 90-day projects | Training & Coaching throughout |
1yIt's important that any new initiatives to increase the 'value' which a 'Finance' function delivers within their organisation, doesn't go as some others have: i.e. "When all was said and done - more was said than done" 🤔
I Help FP&A Teams Supercharge The Way They Forecast
1y'Agility is the name of the game' - 100% agree with this Anders! I like the inclusion of Subject Matter Experts as a specific role - of course every business is different, but are there any ones you see heavier focus on sooner rather than later?
Global SaaS Marketing Leader | Product Storyteller | AI for Finance
1yGreat stuff Anders Liu-Lindberg thanks for sharing. Is ruthless automation a good thing lol? No doubt the unification of AI/ML to enable Finance teams is a question of when not if and a massive opportunity for organizations to embrace.
Pharmacist, CEO, Founder & management director @ medicine Guinea sarl/ Pharma representation, regulatory, marketing, sales & consultancies/
1yNice to be here for learning