Chari TVT, FCMA, CGMA, Financial and Strategic Advisor.

Accounting and finance professionals are being challenged on many fronts in terms of their strategic role and contribution to the business. In the past, accounting and finance professionals had clear, well defined and distinct roles. Fifteen years back, if the chief financial officer (CFO) delivered the financials on time, delivered the quarterly results, funded the organisation’s cash needs and ensured an institutionalised business control framework, their fiduciary responsibilities as CFO would be fulfilled.

That has radically changed.

Technology and digitisation are disruptive forces that have reshaped the roles and responsibilities of finance and accounting professionals. The finance and accounting leader’s role in safeguarding competitive advantage, as a strategic business partner and co-pilot to the CEO, has never been more critical in the rapidly evolving business landscape. The reality is that digital transformation is no longer about providing a business with competitive advantage; it is necessary to drive value and, ultimately, survive. There isn’t a single business model or industry that is not being rapidly transformed by digitisation.

Anyone remember Kodak, Blackberry, Nokia or Blockbusters? They were big - in the 2000s.

As a strategic business partner able to navigate future dynamism and unpredictability of markets, business models and revenue streams, finance and accounting professionals need to embrace and understand the technological innovations that are reshaping the work and strategic importance of the finance function, which in turn is intrinsically linked to every part of the business.

Accounting and finance professionals must update their skills and capabilities to use tech to anticipate market changes, adapt their business models, enhance their role and support their organisation for long-term viability and growth. Here’s how technology is impacting the finance and accounting function:

• Automation and efficiency: Technology, especially automation tools like robotic process automation (RPA) and artificial intelligence (AI), can streamline financial processes, reduce errors, and improve efficiency to stay competitive. Automation of routine financial tasks such as data entry and reconciliation reduce manual/human errors and increases efficiency. This allows finance and accounting professionals to focus on strategic planning, analysis and advisory roles rather than day-to-day operations.
• Data analytics: The advent of advanced analytics and artificial intelligence (AI) allows one to leverage large volumes of data for more accurate forecasting, risk management and performance management. It is key to data-driven decision-making based on informed insights. This includes predicting financial risks and opportunities, identifying trends, optimising investment strategies and enhancing overall financial and strategic planning.
• Cybersecurity: With increasing reliance on digital systems, protecting financial data from cyber threats is now a critical aspect of fiduciary responsibility. Finance and accounting professionals need a thorough understanding of the threat landscape and cybersecurity measures to protect sensitive financial data and maintain stakeholder trust.
• Digital transformation: As businesses undergo digital transformation, finance and accounting professionals must adapt to new financial technologies such as blockchain and digital currencies. Blockchain technology can enhance transparency and security in financial transactions, reducing fraud and ensuring the integrity of financial records. Technology also facilitates better compliance with regulations through automated reporting and monitoring systems, reducing the risk of non-compliance and associated penalties.
• Cloud Technology: Cloud technology is key to reducing costs, achieving scale as and when needed without huge hardware infrastructure costs, safeguarding business continuity and disaster recovery, improving collaboration, and providing access to financial data from anywhere, at any time and on any device.
• Cost management: Technology can help finance and accounting professionals optimise costs through better resource management and predictive analytics, contributing to the financial sustainability and profitability of the business. For example, Internet of Things (IoT) allows for more precise tracking and management of assets such as equipment, inventory and vehicles in real time. It also helps to reduce maintenance costs, improve supply chain efficiency and improve customer experience.
• ESG and sustainability reporting: Environmental, Social, and Governance (ESG) metrics are becoming integral to financial reporting. Technology enables the tracking and reporting of these metrics more accurately and transparently, which is crucial for maintaining investor confidence and meeting regulatory requirements. Technology also aids in identifying and managing sustainable investment opportunities, aligning financial strategies with long-term sustainability goals. ESG reporting, capital allocation, strategic planning and alignment, risk management, performance management, regulatory compliance and ESG storytelling are all made imminently more manageable and measurable through the application of technology.
• Stakeholder communication: Accounting and finance professionals have had to extend their management capabilities well beyond the traditional relationships with regulators, investors and providers of credit. Today they are expected to be adept data storytellers, managing relationships with customers, distributors, suppliers, employees, communities, and governments. Modern financial reporting tools and digital communication platforms provide more detailed and accessible financial and sustainability information to all these stakeholders, improving transparency and trust.

AI, machine learning, RPA, blockchain, virtual and augmented reality, and IoT are just some of the technologies that accounting and finance professionals can use to drive sustainable cost reduction, better fraud detection, revenue growth and enhanced return on investment capital (ROIC). However, while technology remains a powerful tool for greater efficiency and productivity, it is not a replacement for human intelligence and judgement.

In navigating a radically changed and data-driven environment with heightened demands from accounting and finance professionals, the most important thing is to maintain the highest professional, financial and ethical standards. Focus on substance more than form. Always remember our financial responsibility is pivotal to creating trust and credibility.

Because finance has insight into all business units, it is uniquely positioned to lead a broader organisational shift into digitisation and tech innovation. Accounting and finance professionals must recognise the imperative for the finance function to support value creation by understanding the impact of digitisation and technology on the current business model and customer value proposition, and then partnering to build a new enterprise business model that embraces digitisation to drive sustainable, repeatable future performance.