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Long gone are the days of the corporate finance role being limited to record keeping and balancing the books. By analyzing data patterns, uncovering the right questions to ask around the numbers and sharing the stories behind them, finance teams are providing key insight to the C-suite to help make informed business decisions.
No doubt, the evolution of corporate finance has been supported by new technologies and trends over the past few decades. And it will certainly continue as new developments change the way finance teams can access, analyze and interpret more and different kinds of data to provide a more holistic look, benefiting the business as a whole.
As we start the new year, here’s a look at seven trends we can expect for corporate finance in 2018. The most successful CFOs and finance teams will embrace these, staying ahead of the curve as the corporate finance role continues to evolve.
1.Machine learning makes its mark.
Machine learning, along with AI, will play an increasingly significant role in financial software in 2018, especially corporate performance management (CPM). Predictive analytics, for example, is based on algorithmic machine learning. In the new year, enterprises will be more eager to see what they can do with their data (with their own models, against competitors or market data, etc.). With so many solutions already available from established vendors, we’ll see more mature solutions, such as big data applied in practice to existing technologies and a major jump in machine learning vendors, and even more accessible plug and play solutions designed to support real work applications.
2.Business intelligence (BI) finally grows up and gains broader adoption.
The popularity of integration tools built for the finance end-user will increase. The accessibility to BI plugins for Excel and other software like Domo has made it easy for businesses to create Excel dashboards with data pulled from hundreds of sources, all without the need for IT. As we already are witnessing with Tableau, PowerPivot and PowerBI, a shift is in the ownership of BI from IT to finance, just as the shift from the role of CFO to data scientist is bound to occur. BI will enable finance users to better analyze data, not only because tools are now affordable and easy-to-use with end-users in mind, but also because of its accessibility.
3. By bringing in more non-financial data, finance provides a more holistic look.
With technology today no longer a barrier to data collection, every bit of data being collected can now be used to tell more of the business’s story. This includes non-financial data, offering a true holistic look in terms of what is working - or not - for the business. Financial teams will integrate more and more non-financial data into their analysis to deliver a more comprehensive look at the overall business.
4. CFOs will lead the C-Suite on long-term and predictive-based decisions.
The most strategic CFOs focus on the future, not the past. Being able to collect and analyze data from other parts of the business, such as sales and marketing, empowers finance with its own crystal ball. CFOs are leading the C-suite in planning beyond quarterly goals to adopting long-term plans, using tools like scenario forecasting and predictive-based analytics.
5.Armed with powerful tools, 2018 is the year the CFO becomes chief storyteller.
Historically, the role of the CFO included risk mitigation (cash flow, ensuring comprehensive and accurate numbers) and reporting. The CFO of tomorrow will recognize that enterprises are not looking just for data, but also insights behind the data. The CFO of tomorrow isn’t just distributing financial reports, but is proactively analyzing standard financial numbers and non-traditional metrics in order to use data to tell a story, and inform and influence company-wide decisions. The evolution from CFO to chief storyteller lies within developing data into insights to drive action and performing scenario analysis to plan for a variety of future market and company conditions.
6. Finance will embrace cloud vendors as trusted security experts.
In 2018, more enterprises and their finance teams will recognize that cloud vendors do security far better than internal IT departments, especially purpose-built vendors such as AWS. Consider how already the nation’s largest, most conservative banks are fully embracing and entrusting cloud vendors as security experts. Expect to see a growing trend of finance teams trusting their cloud vendors as the best security experts.
7. The cloud awakens, as integrations pave the way for finance.
With the proliferation of so many - and so disparate - cloud business applications in recent years, the age of frictionless integration is upon us. In 2018, the winning integration services, as we see now with Zapier and Microsoft Flow, will be simple, easy-to-use connection tools linking cloud systems together based on APIs.
The days of custom code for each integration are over, so expect to see vendors break down silos even further. Finance teams will benefit from new software integrations including workflow, permissions, business rules and other features, enabling teams to work more efficiently to solve real-world business problems.
Don Mal is the CEO and co-founder of Vena Solutions.