Digital Transformation » Q&A with CFO of Advanced, Richard Kerr: The importance of digitally literate finance teams

The UK is wrestling with significant talent shortages and skill gaps, limiting productivity at a crucial time for businesses who are struggling to bounce back from the impact of the pandemic.

This is encouraging a wave of firms to accelerate their digital transformation plans by upgrading legacy software systems with cloud-based solutions and data analytics tools in the hopes of boosting productivity – adding a new challenge for companies to ensure teams are now digitally literate.

Speaking with Financial Director, Richard Kerr, CFO at Advanced, shares his must-have digital competencies for finance teams, the importance of digital literacy in an organisation and how businesses can make the most of the new generation – Gen-Zs – joining the workforce.

Many finance functions are undergoing digital transformations. What are the new must-have skills that finance teams need to support the new future of the finance function?

If finance functions are to be successful today, they must, more than ever before, be made up of agile individuals. The finance team should always be looking to shake things up, challenging the status quo, rather than just accepting what they see before them. Your competitors certainly won’t stand still. Technology has drastically increased the pace of change in the finance sector. You should prioritise adaptability and innovative thinking as key characteristics during the hiring process, so that you have a chance of staying ahead of the curve.

Other soft skills such as effective communication and teamwork must continue to be developed too, as they are constantly evolving in response to new digital tools (such as instant messaging and virtual collaborative platforms). In the past, finance workers may have been expected to simply report historic financial information. Today there is a bigger emphasis on forward looking analysis and forecasting, collaboration, business partnering, and sharing information to gain more complex insights.

Similarly, what are the must-have digital finance competencies needed within the finance team that are missing or lacking in the current make up?

In terms of digital skills, it’s about taking many of the existing core financial competencies and moving them into the technological realm. Aspects such as planning, forecasting, data analysis, and reporting, are core tasks for finance teams. But now, due to the introduction of new methods, these competencies must be taken to another level. All processes must now be completed at pace and with extreme accuracy if the expectations of customers/partners are to be met.

To achieve this, finance workers need to master tools like cloud-based accounting software. The good news is that these systems take care of many repetitive tasks for finance teams. A lot of activities can be automated, such as data entry, complex calculations, and report building. But employees must take advantage of this, by developing their analytical and strategic skills. They will need to spot patterns within data and analyse reports to make powerful forecasts. Today’s CFO is expected to have a bigger say on strategy, and they will need their team to assist them with this.

In the new age of finance, how important is digital literacy? What impact does poor data literacy have on the organisation’s performance?

The importance of digital literacy shouldn’t be underestimated. It’s probably already at the point where it’s challenging to succeed in the finance sector without the appropriate digital skills. Of course, there are businesses that will still be using more traditional methods of accounting. These will be tried and tested methods that have perhaps never failed. But due to the sheer scale of digital adoption, it’s increasingly difficult to remain relevant without joining the crowd.

If we’re to talk about data specifically, it has become one of the most precious commodities out there, especially in the business world. Most companies possess a large volume of data. So, to not make use of this resource would be a real waste, particularly for finance teams. Data can be mined for valuable insights, and digital tools like accounting software help to keep this data as accurate/current as possible. Businesses will likely never reach optimal performance if they don’t take advantage of these methods. And if their data is inaccurate, they could make decisions that ultimately harm profitability.

What can CFOs do to develop the skills of their team that are essential in building a finance function of the future and its ability to successfully implement digital transformation projects?

The first thing a CFO should do to assist digital transformation is ensure there is an effective change management strategy in place within their team covering people, processes and systems. Whenever a new digital tool is implemented, look beyond the system to changing and improving processes, which will minimise potential turbulence or downtime. The finance team should also receive regular communications and in-depth training whenever a new technology is adopted, so that they can hit the ground running as soon as the new approach takes over.

The finance function should also be an environment of continuous learning, which the CFO can facilitate. Employees could perhaps be given at least one day a month to research the latest trends in the industry, to analyse competitors, and to generally see what’s new. If there is a culture of innovation, those in the finance team will be comfortable coming forward with new ideas, for example, if they discover a transformational digital system that they feel like recommending.

There’s a lot of discussion around CFOs needing to ensure they have the right skills and competencies in their teams. In your own experience, how far off is your own finance team from being competent and having the skill sets needed?

The past two years highlighted that CFOs and finance teams alike needed to adapt their digital skillset to understand in real-time what was being spent by the business, and how to report this back to the C-Suite in a controlled and accurate manner. Cloud accounting software has played a significant role in making this possible, both when working remotely and when in the office. If we hadn’t had access to financial data in real-time, we would have struggled to have visibility on cash flow, carry out financial planning and analysis or present precise financial forecasting.

Today, the world of finance continues to change and evolve, with new regulations, National Insurance rises and the need for real-time reporting. The same can also be said for new ways to automate processes and absorb financial data in the Cloud. This is why my finance team, and I are always looking to grow our digital skillset and use this to adapt to new developments in finance. This way, we continue to stay one step ahead of the curve and remain prepared to weather the storms ahead – should they occur.

A lot of people talk about the challenges and impact of Gen-Zs joining the workforce, how are they changing the talent market and what’s required of employers?

Digital transformation creates an opportunity to attract people who know “what good looks like” and are keen to implement better ways of working. When looking to attract and retain new talent, CFOs and Finance Directors must consider what they can offer, and extend to previous generations, which encourages workplace productivity, healthier lifestyles and greater well-being.

One crucial area to review is existing legacy software systems and processes in the finance team. Outdated or bespoke accounting software can hinder the skillset and development of employees and can hold back their personal growth over time. Investing in the right Cloud accounting software and developing your finance teams’ digital skillset will generate higher workplace productivity through the automation of manual tasks and attract Gen Z talent as their needs for technology will be met. It’s time to think beyond traditional employee benefits and begin planning to foster a workplace culture that establishes purpose in individual career development and lifestyle needs.

And thinking of those Gen-Zs joining finance teams, what impact will they have on the finance function?

The impact of Gen Z joining finance teams, and the workforce in general, will certainly shake things up. This is because this new generation holds a unique perspective on technology and how it will play a prominent role in their careers. More Gen Z employees will also be the driving force behind building a greater sense of community in the workplace, revised work benefits and new approaches to career advancements.

If managed correctly, the impact of this new way of working could extend as a motivator for previous generations in finance teams as the way of working continues to evolve. To keep your new and existing finance team members engaged and satisfied at work, the introduction of benefits such as flexibility on when to have time off, work location, mental health days, or activities that create a sense of community will be essential.

Why should CFOs prepare for Gen-Z joining the workforce and how can this benefit the rest of the organisation in the process?

Gen-Z is going to have very different expectations from previous generations when it comes to the level of technology use to gain the answers they need from financial data in real-time. They will also expect to tell stories using that said data through financial planning and reporting from a single, accessible source of truth. This up-and-coming generation of workers is going to want information coming directly to them – not only on their laptops but on their mobile devices. However, every generation in the workplace communicates differently.

Which is why CFOs should prepare now by embracing Cloud accounting technology early to support successful adoption by previous generations in the finance team. One size doesn’t fit all, so it’s going to be important to deliver technology changes with the benefits, hesitations and expectations addressed in advance. As a result, organisations will be better prepared for onboarding new talent while using the Cloud to stay ahead of competitors, both now and in the future.

 

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