The finance function of the future: challenges and opportunities

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Graphic to depict the finance function and data

To conclude the roundtable discussion on modernising the finance function, Director asks Julie Hadfield, partner at professional services firm EY, for her analysis of the main challenges and opportunities

As the UK head of EY Absolute – a business that provides clients with finance functions as a managed service – Julie Hadfield knows better than most the challenges facing finance teams in ventures of all sizes. These were discussed in some depth at a roundtable discussion held by EY and the IoD at the latter’s headquarters in London (see report, click here).

Yet for many of the panellists around the table – and for Hadfield in particular – these challenges also represent a significant opportunity for the finance profession and business alike.

Here, in an exclusive Q&A session with Director, she discusses how business leaders can obtain the most value from their finance functions and explains the innovative way her firm is providing clients with essential services to help their businesses thrive.

There has been a lot of discussion about the future of the finance function in recent times. Do you believe that technological advances, particularly automation, signal the end of the function as we know it?

It is clear that the function has to evolve in response to such developments, but I don’t necessarily see that as a bad thing. Automation is starting to take away many of the more mundane tasks. Time-consuming activities are being completed more quickly and, arguably, more accurately. This potentially frees up finance professionals to add more value to their businesses. But such advances do come at a price. Fundamentally, firms need to think carefully about what they build in-house and what they buy as a managed service.

We have talked a lot today about emerging technology and the potential opportunities it brings, but what are the main challenges facing finance teams?

In organisations of all sizes they are struggling with issues such as: a lack of access to appropriate skills; poor data quality, including an inability to obtain timely and accurate management information; and the inefficiencies associated with outdated systems.

Companies are starting to make strategic decisions about their finance functions in search of a competitive advantage. But finance teams typically lack the investment required to fuel their transformation, as funding tends to be focused on other parts of the business that traditionally drive growth. Investing in the finance function can also deliver growth, of course, yet this link is perhaps not as readily understood. That is where a provider of managed services, such as EY Absolute, comes in.

What is EY Absolute and how has the business developed?

EY Absolute is a holistic compliance and reporting service that helps businesses to make their finance functions more efficient. Powered by Microsoft technologies, it delivers a range of core bookkeeping, accounting and tax compliance services, enabling a client to outsource some or all of its operational finance function. It provides relevant, accurate and timely management information based on clients’ key performance data, enabling them to focus on growth. The services offered by EY Absolute are flexible and modular, which means that a client can choose the most appropriate combination.

EY Absolute was developed in response to many of the issues I have just outlined. We also discussed several of these at the roundtable, including how to extract value from technology to enable better strategic decisions and how to recruit and retain people with the right skills. Businesses of all sizes don’t always have the resources or knowledge to solve such issues. EY Absolute removes many of the challenges to maintaining an effective finance function and enables business leaders to focus instead on growing their businesses.

How can a managed-service solution help businesses struggling to modernise their finance functions?

It takes away much of the operational and administrative burden. Using EY Absolute is more cost-effective than building and maintaining capability in-house. It lowers the investment and maintenance costs of the IT systems and helps to simplify the in-house finance function. Our flexible service can scale in line with business requirements, reducing the need to recruit, train and retain staff with appropriate skills. We also provide access to our UK and global networks, helping businesses to grow as they enter new markets and/or territories.

Is there a risk that a client will lose too much control if all these services are provided by a third party?

Organisations have always had this concern about outsourcing, yet many of the services that EY Absolute delivers have traditionally been outsourced. We are also seeing an upward trend in the outsourcing of higher-value processes – such as management accounting, planning, forecasting and budgeting – where control and visibility are, of course, critical. But both the technology underpinning EY Absolute and the way we structure our team and deliver our services helps to address these concerns. Our cloud-based systems enable us to collaborate with clients, giving them real-time access to their data and a complete view of what we’re doing for them.

But it’s the human element that really helps to overcome their worries: EY Absolute provides each client with a relationship manager who understands its business, along with a dedicated finance team that’s effectively an extension of its own finance function. Although we do harness the power of technology to deliver our services, the value is derived from the people behind it, who are on hand to be the client’s trusted business advisers.

What do you think the finance function of the future will look like?

As we discussed at the roundtable, it’s clear that technology and, more broadly, digital disruption are likely to have a significant impact. Digital disruption is both an opportunity and a challenge for business leaders when it comes to their finance functions. But, while the role of automation and technology will keep growing, people with the right skills will continue to be crucial. Finance professionals who can lead innovation and drive value from new systems will become increasingly important. But, in my view, leading finance functions of the future will be those that strike the right balance between technology and people and between build or buy. Getting the balance right will enable finance to focus on higher-value tasks, partnering with the business to generate strategic insights and, ultimately, drive growth.

Julie Hadfield, partner at EYJulie Hadfield is a partner at EY and leads EY Absolute in the UK.

Having worked at Deloitte and Credit Suisse, Hadfield joined EY in 2004. She has more than 18 years’ experience of delivering UK and international corporate tax and accounting advice to clients ranging from start-ups to large listed corporations.

A chartered accountant and a chartered tax adviser, she specialises in designing and delivering tailored accounting, tax compliance and reporting solutions.

A mother of three, Hadfield is also a keen advocate of equal opportunities and flexible working practices.

Visit ey.com/uk/eyabsolute for more information about EY Absolute

Click here to read the write-up of the roundtable discussion

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