Survey: finances slowly perform new business function of data guards

Another challenge is shifting from a just-in-time mindset to forward-looking predictions.

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A new Genpact report found that financial leaders find it difficult to fulfill the non-traditional roles needed to make digital transformation a success.

The “Finance and accounting: Unleashing transformation” report identified three major hurdles among CFOs and financial and accounting teams. Leaders do not want:

• Expand the rollout of transformational technology
• Become the guardian of business data
• Connect internal departments around data projects

Research firm Longitude interviewed more than 500 financial leaders on behalf of Genpact to understand how artificial intelligence and advanced analysis change strategy and tactics in financial and accounting teams.

Expand transformational technology

A key to AI’s success is connecting to other technologies such as the Internet of Things sensors and machine learning analysis. Many leaders struggle with this and financial managers are no exception.

The report found that 81% of the functions implement automation, analysis and AI (AAA) to improve only a few business processes and only 13% use them to transform many business processes.

None of the respondents uses the technology to rethink their functions with AAA.

Finance is known to offer analysis of past performance, but an important advantage of artificial intelligence is the ability to look ahead. Financial leaders regard this as another difficult shift, since most functions only provide predictive insights when requested.

Only 24% of respondents say that their functions offer a structured approach to providing predictive insight and none have a structured way that supports the needs of individual business units.

Leading financial and accounting leaders in the retail sector are leaders in this field, with 47% offering a structured approach to predictive insights.

Very few financial departments in insurance (20%), banking (18%) or consumer-packed goods (15%) have a structured approach to generating insights.

AI also has the potential to reduce fraud, but the study found that F&A leaders do not use this option either.

Fewer than 10% of participants have improved risk assessments and mitigation, and fraud identification and prevention with predictive insights, despite respondents saying that the risk and compliance are very advanced when AAA is introduced. Also currently only 9% use predictive insights to identify new revenue opportunities.

Become the guardian of company data

Traditionally, financial teams collect data and offer just-in-time compliance and reporting. According to the report, these tasks need to be replaced with more forward-looking work, such as identifying high-margin customer segments and directing sales teams to focus on that.

Performance insight is the pivot and what finances should actually do, according to Katie Murray, the CFO at RBS.

SEE: The ethical challenges of AI: a guide for leaders (free PDF)

“Finance must use its ability to bring data to life and its ability to stimulate economic and strategic value creation,” Murray said in the report.

The Genpact survey data shows that only 49% of financial respondents think they should be the company’s data guards.

Financial leaders should embrace this responsibility given the established data capacities of the financial sector and understanding of the wider company, according to Hari Avula, senior vice president and CFO of US retail pharmacy at the Walgreens Boots Alliance.

“The finance function has the skills to manage, organize, and analyze data, allowing sit to generate a holistic set of insights based on analysis for multiple statistics, shareholders, consumers, and employees,” he said in the report.

Connect between departments

Just as financial leaders are skeptical about monitoring data, they also hesitate to take the lead in connecting business processes between internal departments.

Only 32% of financial functions have integrated technologies for all functions to ensure that the process is managed end-to-end. Only 10% have a global process owner or visibility of performance results for different functions.

Other important financial processes, such as tendering to pay, ordering to cash in and recording to report, also lack initiatives that could connect them throughout the organization, the report found. Financing teams can improve service, transparency and efficiency by connecting these processes.

Financial leaders may need to reform their recruitment plans and start reshuffling current employees to meet this challenge to make these strategic shifts. Sanjay Srivastava, chief digital officer at Genpact, said the key is to find “bilingual” individuals with both technological expertise and traditional F&A skills.

“The world no longer needs computer scientists, nor accountants,” said Srivastava in the report. “It needs people who can do enough of both to understand the right questions and then implement the right technologies to get them answered.”

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A survey among financial leaders has shown that these executives are struggling to renew their business roles and responsibilities to integrate new technologies such as artificial intelligence.

Image: Genpact