What CFOs need to know and can do now
The digital disruptions that informed our thinking about finance trends several years ago have accelerated. And all signs suggest they’ll continue to do so. Our new Crunch time report takes an in-depth look at what we know now about the future of Finance.
Finance faces new realities
COVID-19 has sped up business innovation and stress-tested the concept of 100% remote work. Industries are converging, with global M&A activity in the first five months of 2021 reaching a record $2.4 trillion.1 And companies have raised more capital in the past year than at any time in recent memory. At the close of Q1 2021, nonfinancials in the S&P 500 held more than $2 trillion in cash reserves.2
In 2018, as digital disruption was prompting its own new realities, Deloitte predicted eight finance trends in our Crunch time report Finance 2025. Now that we’re halfway there—and everything changed, then changed again (to quote Tom Petty)—the time feels right to revisit those predictions.
- The finance factory: Finance will continue to automate, but the focus will shift from operational finance to financial insights.
- The role of Finance: Finance will, as predicted, focus more on service, analytics, and business insights, all of which mandate new capabilities.
- Finance cycles: Although real-time financial data will still be a ways off, quarterly reporting will gradually lose its relevance for investors and management, both of whom require more timely information to make decisions.
- Self-service: Finance will remain uneasy about the use of self-service data, but it will embrace self-service as a way to rationalize reporting requirements and special requests.
- Operating models: Cost reduction has historically been the driver of changes to finance operating models. But that focus will evolve as new models look to expand Finance’s core capabilities and what it can deliver in partnership with other functions.
- Enterprise resource planning: Through acquisitions and functional enhancements, ERP vendors have largely staved off competition from specialized applications and microservices.
- Data: Standardized, high-quality data will become even more important, as data is the foundation for business insights, automation, and touchless operations.
- Workforce and workplace: Finance will hire more people who can configure and customize digital tools to generate insights. And work will increasingly be done remotely as hybrid workplaces become common.
Tomorrow’s winning organizations
In taking a fresh look at our 2018 publication, one insight stood out: Doing just one or two things exceptionally well probably won’t cut it. Nor will working in isolation. The future of Finance is all about managing across functions, building the right combination of capabilities, and establishing a strong data foundation. That’s what will distinguish tomorrow’s winning organizations.
Excelling in multiple areas can sound like a tall order. But it may be easier than it appears. Gains in any one area can create a multiplier effect, facilitating progress in others. The key is knowing where to place your bets (based on evolving business needs and existing Finance capabilities), then managing change holistically. With steady progress, you can get where you need to be.
Endnotes
1 Reuters, “Global M&A Surges to Record High for Third Straight Month,” June 4, 2021.
2 Bloomberg, “S&P 500 Firms Beef Up Their Cash Piles to Deal With ‘New Normal’,” June 16, 2021.
