By Carolyn Cole, Partner, Finance Transformation and Max Young, Senior Manager, PwC UK
Commercial finance has long provided an important role bringing value to the business and its commercial success. Yet the sad reality is the actual role most professionals perform today is far away from the one they want and need to perform.
Business teams need to think beyond a short term focus on hitting monthly cost and revenue targets. The real concern of CEOs is long-term viability and the impact of unknown and emerging risks they can’t yet see in front of them - just under half (45%) of CEOs now believe their company won’t be economically viable in ten years if it stays on its current path.
Yet despite advances in technology such as enterprise performance management (EPM) software, many finance professionals still spend a significant proportion of their time closing the books, preparing or updating budgets, and delivering quarterly forecasts and mini re-budgets.
Instead of providing forward-looking strategic insight and reinvention, these cyclical processes can take up to six months, focusing too much on the rear-view mirror and offering only incremental adjustments.
And the growing proliferation of financial information is increasing the workload in this endless cycle of budgeting and reporting, leaving even less time for insight and decision support. Should this trend continue it’s going to become harder and harder to attract and retain talent in this area of the profession.
Advancement in technology, particularly Generative AI (Gen AI), promises a fundamental change in the role and focus of the commercial finance professional. The financial analysis and forecasting capabilities of the latest generation of tools demonstrates the potential Gen AI has to automate large parts of report and budget preparation and analysis. This will free up precious time as well as providing the capability to analyse huge volumes of data and identify trends at a scale not seen before. But it also highlights the potential risks from poor quality data, particularly that sourced from outside of the organisation’s own direct control.
So how can commercial finance keep pace with changing business demands and take advantage of the unfolding tech-enabled opportunities?
Firstly, by Generating market insight and foresight
Dramatically reduce the time spent poring over actuals at granular levels of detail and start driving an understanding of the market, key threats and potential opportunities.
Secondly, by Identifying key value drivers
Identify and provide insights on the right commercial drivers to optimise both the top and bottom lines.
Thirdly, by Tightening cost control
Ruthlessly challenge enterprise-wide costs to strengthen margins and build organisational resilience.
Fourthly, by Setting the right targets and measures
Drive focus on the right financial targets, metrics and key performance indicators being mindful of adaptability.
and last, by Realising tech potential
Support the business and broader finance team in adopting the right technology solutions, while working within the bounds of the data and systems available.
Cutting across all these priorities is the need for a bold outlook. The commercial finance professional of the future will be inquisitive, ready to challenge conventional thinking and able to unlock the full value of data and analytics.
Staying with the status quo is no longer viable. The commercial finance professional is at an important junction and the options are clear – be marginalised by advancing technology or embrace it as an opportunity to carry on doing what they love doing while staying relevant and critical to the success of their business.
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