For many finance directors, 2018 could be the year when the power of developing technologies is fully realised. It can mean that for the first time, finance heads have at their disposal the means for their function to really drive the performance of their organisations.
What marks out this year is the prospect that FDs will really become skilled and knowledgeable about these technologies, harnessing them for business performance and pushing down costs.
Amongst the trends that are likely to go big is data and advanced analytics– which add intelligence to the planning and decision-making processes based on dynamically changing data.
By using predictive analytics that enable foresight into the most complex and planning and operating scenarios, departments across a whole organisation can be aligned with finance- so that effective decision-making can take place across a group.
Until recently, many FDs using predictive analytics didn’t have the ability to easily simulate or configure analytics to reflect reality for decision-makers. But 2018 promises to be the year when technology will provide connectivity between the predictive functionality and the modelling and planning functions.
This year, FDs will be able to ensure their organisations benefit from the insights provide by predictive analytics through capabilities such as Monte Carlo simulations, smoothing methods and multivariable linear regression to which advanced statistical forecasting and modelling processing can be added across an organisation.
The FD can be the catalyst for using predictive analytics to enhance intelligence in areas such as workforce optimisation, supply network panning, transport assignment and product marketing.
Naturally flowing from the role of new forms of predictive analytics is the power of integrated planning to make new leaps forward. Regarded by many organisations as the ideal way of undertaking their planning processes, the FD can be the catalyst to take this approach to a new level.
By extending the process out from finance to every part of the group-ensuring every element is embedded in the process through connecting on a single service platform- finance can interact with sales, marketing, supply chain, IT and HR.
Another major advance expected this this year is the ability to engage successfully with every department- by examining all economic, social, and environmental costs and benefits to determine the most appropriate action and thereby plot a suitable course of action.
In interpreting the wider ecosystem that companies must operate in, there are positives from also interacting with stakeholders that this platform approach makes available.
Joining it up
This year also promises to be the moment when companies fully recognise the value of using technology platforms to connect financial and operational plans.
Enterprise planning platforms that can link finance and operations with one another have been shown to heighten collaboration, improve data transparency, and bolster productivity by alleviating laborious manual processes.
For finance teams that rely on spreadsheet-laden environments, a natural barrier prevents them from being able to adapt and thrive within volatile business conditions.
This year also expect to see connected cloud technology and automation receive significant airplay—especially around the benefits of integrated business planning and connected planning approaches in finance.
Although the jury is out on how fast Artificial Intelligence (AI) is developing in some areas, it is widely expected to grow faster this year.
According to a recent survey in the US by AI provider Narrative Science of 235 business executives, 38% were using AI in 2017 and 62% expected to be using AI technologies in 2018.
In accounting systems AI is expected to grow, with more user-friendly systems such as automated purchase and sales ledger transaction processing between clients and suppliers featuring.
In addition, integration and large scale application of automatic processing of digital invoices and further digitising invoices are expected to make a major impact this year.
The result will be that more than ever before, finance departments will become more focused on developing and evaluating key strategies.
Seizing the day
If all the above technologies weren’t enough of a game changer for 2018, consider the boost from better data visualisation.
For some, this combination could mean FDs being able to consider a completely different way of looking at things-with greater awareness and understanding of clients and suppliers, in a real-time setting.
When a range of other surfacing technologies are brought into the mix it is possible to see this year as a defining moment with FDs engaging more and more with their organisations- in a way that is highly influenced by technology.
This might include the integration of blockchain and virtual reality into financial management. At each turn it will see FDs developing a new focus within their organisations- moving from the mechanics of producing reports to ever more value-added assignments.
The by-product of all these developments is that the FD will become ever more involved with the strategic aspects of their companies- a digital finance head chief that is aware of and understands the strategic direction of their company.
Despite waves of disruption that threaten organisations everywhere, 2018 is likely to be seen as a watershed year when FDs moved to fully harness technology.
With technologies such as advanced analytics, integrated planning and strategic business partnering really taking off, the CFO can be recognised as a real value creator- a chief value officer in the making!
For more information, visit Bedford Consulting.