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The future of finance
Harnessing the power of data to enhance and position finance functions as strategic value drivers
Tech-powered change is positioning finance functions to unlock greater value across organizations. These areas of focus can help your teams improve performance and reveal opportunity.
Is your finance function ready for the next wave of transformation?
A new wave of finance transformation is emerging, in which leading finance functions will lead by successfully collecting, storing and gaining insight from huge quantities of data. This new wave can position finance teams as data stewards — a new role for many CFOs, but one that must be embraced and embraced quickly.
From rethinking organizational structure, updating operational toolsets and redefining planning to managing cash, creating investment opportunities and improving forecast and analytical capabilities, finance leaders can now leverage both internal and external data to help drive strategic opportunities for the company.
Exploding data volumes, radical automation and industry convergence — all augmented by a move to cloud — are creating this new wave of opportunities for transformation and expanding the role and impact finance functions can have in their companies. Modern CFOs are leveraging this new era of data to further enhance their capabilities within operational finance through advanced analytics to drive insights that penetrate into operations.
Data automation for financial operations
Identifying areas for improvement and savings is nothing new for CFOs, but by using the growing volume of integrated data being generated today, finance departments can address operational efficiency with greater precision. In PwC’s January 2022 Pulse Survey, 53% of CFOs said they saw accelerating digital transformation to drive standardization and automation as a priority over the next year. Leveraging interests like portfolio investments or integrating general ledgers with source systems, front offices or customer and sales data can improve both insights and optimization.
Moreover, many everyday financial tasks are based on rules and regulations that can easily be standardized and automated, improving efficiency while reducing the risk of human error. Efficient and trusted automation — through the use of technologies like machine learning (ML) and artificial intelligence (AI) — can save time and allow companies to make better use of human resources.
From PwC’s March 2022 study The Digital CFO, we learned that most CFOs see great potential for the use of AI and ML in planning and reporting activities. By applying these tools to historical and current data, organizations can improve analytics to better predict trends and scenarios, allowing CFOs to help the business refine its strategy and react with greater agility.
At a recent PwC engagement, machine learning and data modeling helped boost accuracy above 99% — a 60% improvement that turned weeks of work into hours.
Advancing your enterprise performance management capabilities
Today’s CFOs are faced with a complex, constantly changing environment in which organizations demand support from finance units that unlock insight efficiently and drive decision-making and performance. The ability to navigate high volumes of data is necessary for quick decisions, including scenario modeling for strategic pricing and new product development. Finance organizations must transform from a “descriptive” function into one that creates cohesive, forward-looking value.
Substantial technological growth opens up new and exciting possibilities for organizations as they streamline their enterprise performance management (EPM) capabilities. An integrated technology and data framework serves as a key enabler for finance, demanding agile processes, well-structured data and leading digital solutions. Top organizations build data frameworks that utilize both financial and operational data to answer key questions, tapping into traditional sources of information (like ERP) as well as newer sources (e.g. CRM, operations systems, supply chain) to produce additional insight.
As the technological landscape expands and both predictive and prescriptive analytics capabilities continue to grow, so too does availability of data and the ability to derive value from it. This allows the conversation to change from “what happened?” to “what will happen?” to “what should be done?”
How treasury departments can use data to manage cash and financial risk
Cash visibility, control and efficiency are paramount for today’s CFOs and treasurers — historically, most companies have struggled to forecast cash, currency and commodity exposure. Leveraging today’s leading data tools can help companies improve cash, liquidity and overall financial performance, all while gaining more confidence in their forecasts and reducing risk.
On-demand access to real-time dashboard views of cash and liquidity can inform more agile decision-making in a digital environment and allow better forecasting of cash and currency positions across all markets. A flexible platform that can be enabled by the latest technologies can dynamically generate scenarios to support this planning. Future solutions may even employ machine learning models to predict trends, then seamlessly trigger bots to optimally move and redeploy cash.
Accelerating the deals cycle and extracting value through connected data
As the fuel of insightful analytics, data can help reveal value throughout the deals process and lay the groundwork to unlock potential value in a transaction. Greater quality and quantity of that data can aid financial leaders in simplifying the deals process, making it faster and more efficient. Data isn’t going to fundamentally change the nature of deals, but it can help improve and accelerate each step in the process.
Having readily accessible and organized data can streamline the entire pre-deal process, including diligence and readiness, while modeling and transitioning systems of record help keep the negotiation and acquisition stages smooth and efficient. Meanwhile, seamless reporting and improved data analysis can allow deals teams to quickly recognize synergies post-acquisition, adding value that might otherwise have been overlooked.
Deals functions are more than just closing — they’re an entire process of determining value across portfolios. So it’s not just about having the data to complete a good deal, but the knowledge and ability to organize and extract meaning from it, analyzing and leveraging that data to ultimately drive strategy and value for the company.
Rich data and analytics aren’t meant to replace the deals process, but refine and enhance it.
Finance for business: Using data to identify value across the organization
Rapidly scaling automation and an abundance of structured enterprise data mean the role of finance functions is rapidly growing and evolving. Finance teams need to think past ledgers and periodic forecasts to bring their expertise to overall business strategy. Key areas like long-term growth, investment and operational decisions require not just insight but financial engineering to make capital available.
The concept of “data as a currency” is truer now than ever before. Each day, companies gather more data, not just on their products and services but on their customers and how they use or interact with those offerings — rich opportunities for monetization. To unlock this value, companies need to view all aspects of their business from a financial perspective: Support for strategic investment, incubation and (in some cases) product termination decisions need to be quick and timely but also holistic. Finance departments can stitch together the economic value of products and services for their companies. In our experience, domain-specific cross-functional data model approaches, centered around the customer and product, help implement value-driven economic decisions.
The people solution
So as the need for advanced data collection and analytics tools climbs, is the human finance employee becoming obsolete? Not likely. Currently, less than a third of employees overall are concerned that they could be replaced by technology within the next three years.
The rise of advanced tools and automation isn’t poised to supplant workers but supplement them. As these tools increase efficiency and productivity, finance functions will recover more time and resources with which their staff can pursue deeper, more critical tasks. Further, it creates a need for financial professionals with the skills to know how to interpret the data and work closely with operations to drive profitable outcomes.
What you can do next
Start considering how your finance function can help you realize value across your organization.
Workshop. Work collaboratively to identify strategic value opportunities.
Avoid a "data swamp." Rather than lumping all your data together, work methodically to identify critical data elements to solve current financial challenges.
Think holistically. Agree on your proof of concept and a people-centric strategy to begin your journey.
The next wave of finance transformation is here and PwC has the tried and trusted approach to move you along on your journey.
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