This article originally appeared on PwC Tech Effect.
The pandemic has significantly impacted many aspects of finance — from closing the books remotely to near-constant scenario planning and shoring up supply chains. Faced with the need to be more agile and decision-ready, finance organizations are evaluating their processes and prioritizing key areas to deliver the outcomes they seek.
Comprehensive and continuous planning is driving deeper collaboration among functional business partners, providing greater visibility across the organization. According to our March 2021 CFO US Pulse Survey, CFOs’ top priority for the finance function in 2021 is to establish finance as the business partner across the enterprise (47% see this as a priority). While business partnering isn’t a new goal, the pandemic has been a catalyst to expand the level and access of these partnerships. One particular area is ripe for better partnering: capitalizing on the digital economy that exploded out of the pandemic; nearly half (46%) of CFOs see it as a high-growth opportunity.
Tech Effect sat down with Chris Dimuzio, PwC’s Finance Transformation leader and Michael Magaro, senior vice president, Business Finance and Investor Relations, Workday, to discuss what’s happening in today’s finance function — from broader business partnering to innovation and investment in enabling technologies.
Where are you seeing the need for innovation in finance, and what’s driving it?
Chris Dimuzio: There’s a constant push to do more with less in finance, and this has been happening for some time. How we do transactional finance more efficiently is an example. This push is what often drives the question about how the finance function can bring more value back to the broader business. It’s about more efficient planning, reporting and financial close, which technologies like artificial intelligence, cloud and automation help make happen. It’s also about investing in the skills you need to execute. Data democratization also allows finance to spend more time partnering on strategy and analysis rather than data collection and distribution.
Really, innovation is happening — and should happen — across all aspects of finance. A more agile and efficient finance function can deliver more value across the company, to all business partners.
Michael Magaro: Finance as a whole has to move faster than ever before and needs to be the trusted source for real-time data. That speed and accuracy demand innovation across the entire finance process — from enterprise planning and analysis to record to report, report to forecast, contract to cash and source to pay. And while the past year has shined a light on the need for better, more automated technologies and processes across the board, a big learning has been about the need to redefine partnering with the rest of the organization. Let me give you an example of how we are doing that at Workday.
This past year, we rolled out Workday Adaptive Planning across sales, marketing, service, support, HR, operations and R&D to continuously gather inputs from the business as we dynamically adjust resources against opportunities. Using dashboards, I was able to work in tight collaboration with sales and marketing to realign resources around several of the company’s strategic growth initiatives and fund their efforts to deliver on those objectives. This couldn’t be done with our previous annual planning process.
Company-wide planning works best when everyone is operating off the same data source. Our applications run off a unified data core, and we also use an intelligent data hub to bring in external and industry data, so our insights are richer and our decisions more data-driven. Through deeper partnerships and greater mutual understanding of the company’s strategic goals, partnering with sales, HR and operations, for example, finance will be in a much better position to deliver the insights the organization requires.
Where do you see the most valuable partnering for finance across the business?
Chris Dimuzio: One of the most important relationships I’ve seen develop out of the COVID-19 crisis is that between the CFO and the COO. Supply chain constraints caused chaos across the globe, highlighting vulnerabilities companies may not have anticipated and, more recently, underscoring how constraints can be a big driver of revenue for some businesses — right now, many companies can sell as much product as they make. Supply chain resiliency is critical — and a key issue for the C-suite.
The pandemic also highlighted the need for strong relationships between finance leaders and human resources leaders, tax leaders and risk leaders. And, of course, as companies accelerate their digital investments, it’s important for CFOs to partner closely with the CIO/CTO.
Michael Magaro: One thing became clear in the pandemic: the way we work has changed. For finance, that means that we’re partnering more deeply with the CHRO to better understand and plan for our workforce, locations and employee experiences. We’re also partnering more deeply with the CIO as we align on technology initiatives to move the organization forward and meet the changing needs of our workforce and customers.
And I agree that we’re also seeing greater alignment with the COO. At Workday, I meet with our COO and CFO on a biweekly basis to get into what we call “the right operational rhythm.” In these meetings we consistently review our product roadmap, our sales and our finances — bringing these together for a comprehensive view of our business. This allows us to plan at a very granular level three years out, mapping to our strategic growth plan and making adjustments as market conditions or business needs change. This continuous planning process is emerging as a new best practice as we, like many organizations, look ahead to a post-COVID-19 economy.
Where do technologies like cloud fit in?
Chris Dimuzio: Our recent US Pulse Survey showed that CFOs see significant growth opportunities in key areas around the digital economy, with 46% predicting high growth and 36% expecting moderate growth. CFOs are achieving this growth through technologies like cloud and machine learning by improving predictive analytics and automating certain processes to allow for more data.
Cloud is a great way to drive standardization and can be a means to get to lower costs.
The combination of technology and digital talent puts the finance function into a strategic position, one that drives higher quality financial reporting and better data-driven decision-making across the company.
Michael Magaro: Finance’s adoption of cloud technologies is a question of when, not if. And while the move to cloud technologies has been happening across the enterprise for years, finance functions have been a bit slower to adopt, given the disruption it can cause to business operations. But recent data shows CFOs are now prioritizing the acceleration of digital transformation fueled by the cloud — especially since the pandemic — and for good reasons. Cloud technology offers customers the latest innovations, the software is easy to update and access, and the cost can be lower.
Replacing legacy systems over time is the best option for many organizations, particularly product-based industries. As a result, we’re now seeing companies adopt individual Workday solutions that coexist with current ERP systems to realize efficiency gains. That allows companies to continue to transition the rest of their systems to the cloud at their own pace. While some organizations will transition their entire financial software suite to accelerate their digital transformation, the goal remains the same: enable finance to better manage data to deliver trusted insights to the organization.