Chief Financial Officers (CFOs) will need a long-term strategic vision for their financial functions if they are to stay competitive in the business landscape, new research shows.
Research carried out by PwC found that 46 per cent of CFOs see technology as the biggest barrier to finance enhancement, while 32 per cent see lack of funds for people as the second biggest barrier.
Furthermore, only 22 per cent of CFOs have a fully developed three- to five-year vision for their finance function.
The findings come from the report ‘Finance Evolution: Thriving in the Next Decade’, which was conducted with the ACCA and Chartered Accountants ANZ.
It examined the future of finance and provides insights into the development of the finance function towards 2030 and beyond, as well as highlighting emerging trends and offering recommendations for CFOs.
“The report finds that finance teams can no longer be seen as being in a support role and instead need to evolve and take on an increased span of control beyond its traditional financial remit,” said Ruth McNamee, PwC Ireland finance transformation director. “For finance functions to stay relevant, they need to look ahead.”
“The role of the CFO is fast evolving beyond finance into the role of Chief Value Officer; encompassing wider value creation and management.”
“As stakeholders and regulators seek greater transparency and granularity of reporting, the CFO also needs to help the business manage conflicting priorities, increased speed of innovation and new competitive threats.”
Data governance will be a key building block of financial functions in the future. To ensure clean data and intelligent use of it, organisations will need to invest in their data management strategies and the required skills and technologies.
PwC’s most recent CEO survey found that 63 per cent of business leaders expect generative AI (GenAI) to significantly change how their business creates, delivers and captures value.
However, 62 per cent are worried about the increased risk of misinformation spreading across their business, meaning finance professionals need to take a proactive approach to changes in the regulatory landscape.
One area where GenAI can help is with enterprise resource planning (ERP) systems. The report also notes the increasing use of cloud-based ERPs to help drive process simplification, standardisation, and automation.
However, only 30 per cent of Irish survey respondents consider their core finance applications to be fully integrated. This is expected to more than double to 65 per cent within the next three to five years.
All of these innovations will falter without the talent and teams to help underpin them. The report found 64 per cent of CFOs foreseeing a skills gap in digital tooling and technology, with the greatest skills and talent deficiencies in the next three to five years. Survey respondents highlighted digital, data, and sustainability skills as the most significant.
The report emphasised other abilities like influencing, communication, and decision support and highlighted some of the intergenerational differences in attitudes to work as significantly influencing the future nature of the finance function.
Technology is seen as a means to address some of these expectations, such as balancing workloads, but the report stresses that finance leaders must go beyond this and clearly communicate the purpose and value of what these functions deliver to the organisation and society.
The report recommends five key actions businesses can take. This includes leading with change and being clear on changing dynamics and value drivers within your respective industries. Leading with performance through trustworthy, high-quality information, as well as with data by defining and protecting the primary data sources that underpin trust.
The remaining two involve leading with good tech-powered processes which allow for effective and efficient operation of finance and identifying the right people and engaging your teams with meaningful experiences to build lasting momentum.
Read the full report at www.pwc.ie/financeevolution