How Digital Disruption Increases Finance Capabilities

Mike Danitz, Principal in the Finance and Enterprise Performance practice within Deloitte Consulting LLP

Mike Danitz, Principal in the Finance and Enterprise Performance practice within Deloitte Consulting LLP

Advancements in technology and digital disruption were a driving force behind Deloitte’s Finance 2025 predictions only a few short years ago. Now, the COVID-19 pandemic has triggered – and accelerated – a remarkable transformation across the finance function so profound that Deloitte has reassessed those predictions in a new report, Finance 2025 revisited. In the past 18 months, finance leaders have needed to rethink longstanding assumptions about how finance operates, and technology has becomea crucial tool moving forward to fundamentally reshape finance as we know it.

This shift has allowed the finance function to excel quickly and efficiently, make the most of new opportunities, and unlock new levels of performance. Moving forward, finance leaders can expect digital technologies to reshape finance – and global business along with it. Here’s how.

First, leaders must understand the immense possibility of remote work and technology’s ability to streamline processes.Before the pandemic, closing the books fully remotely was never considered a possibility. Now, it’s becoming the norm, and leading organizations have seen proof-of-concept that many remote operations are not just possible – they’re more and more effective. Remote work also offers a unique opportunity to harness new sources of talent in an increasingly challenging marketplace, as digital empowers nontraditional workforces and unlocks new opportunities.

While we still expect a “return to work” in some form, operations will not look like they once did – and savvy leaders in finance and the C-suite more broadly should mine the past 18 months of remote experience for useful insights that unlock more efficient ways of working.

Second, enterprise resource planning (ERP) vendors are growing their digital footprint as on-premises support fades amid the transition to the cloud—a critical trend to watch for when planning finance strategy.Cloud-based finance ERPs are rapidly moving from back-office cost centers to front-office drivers of business value. As ERP vendors prioritize their digital footprint, their services offer greater potential for finance leaders to harness valuable insights that directly impact performance.

Third, as AI automates simple tasks and processes, therefore freeing up more time and resources, there has been a noticeable shift from operational finance to financial insights. Improving analytical and predictive capabilities allows finance leaders to pivot from a reactive to a proactive stance that helps to inform business strategy with a greater understanding of opportunities and risk.

If there’s one thing that emerges in the Finance 2025 revisited report and that we consistently see in practice, it’s that the synergy between these different capabilities – how they work together, and what possibilities they unlock for finance teams – is driving greater change than any individual innovation. For example, successful automation initiatives can help finance leaders re-allocate resources and invest in other capabilities that may have been lower priorities in the past. This “multiplier effect” is essential for success in the disrupted marketplace.

That’s where digital disruption comes in, and how it helps finance unlock new functionalities that create value for the entire business. The winning finance organization of the future isn’t one that does one or two things especially well, or works in siloes. Successful future finance organizations will manage across functions, build a valuable combination of capabilities, and support those capabilities with a strong data foundation.

Finance leaders should review their business needs and place their bets accordingly – while relying on digital to manage change and adapt with greater agility than ever before.