PwC Perspective: Next Generation Finance€¦ · new Digital world. Emerging solutions will help them respond to these ... Next Generation Finance. Require a new level of skills to

Next Generation FinancePwC Perspective:

PwC | Next Generation Finance POV

6:02am3:15am3:00am 6:00am3:30am 6:01am

The Future CFO getting a caffeine fix

Finance 2020 - the art of the possible

• Dashboards and Gross Margin reports are automatically prepared using interactivevisualization tool

• CFO utilizes voice recognition software to initiate alert to APAC commercial team for follow up discussion on commentary

• CFO receives Starbucks double latte

• CFO reviews mobile dashboard report and commentary on iPhone

• CFO asks iPhone to drill down on APAC Gross Margin by product

• CFO gets in line at Starbucks

• CFO queries Gross Margin analysis for APAC using iPhone voice recognition software

• CFO orders double latte –pays using digital currency

• Commentary is added leveraging natural language generator (NLG) to the reports and dashboards

• Inventory and Revenue transactions populated by an automated robot feed to the finance data lake


Finance is being challenged to understand the new Digital world. Emerging solutions

will help them respond to theseevolving business needs.



Manage book-keeping & accounting as primary role

Focus on securing and managing capital and expertise finance functions (treasury, tax)

Centralize internal processes

Bu

sin

es

s V

alu

e

Manage fundamentals (cost & spending) as primary role

Multi-process shared services; optimize processes for low cost

Core ERP systems capability

Early1970s

Generation I

2000sGeneration II

Greater demands for business and financial insights and analyses

More complex processes moved to shared services and outsourcing

RPA and Cloud becoming mainstream

TodayGeneration III

Time

Digitally enabled processes and data provide real time settlement and information

Drastic change in finance service delivery model

New finance skills required to compete

Future-2025Next Generation

Finance

Evolution of Finance

Finance organizations are struggling to define what will be needed to succeed in a digital world


Finance

Exploding Data Volumes

B2B to B2CBusiness Models

Industry Convergence

RadicalAutomation

ChangingRegulations

AcceleratedM&A

Unstructured Data

Headcount Skills Processes SystemsStructure

Evolving business models and digital processing capabilities will drastically change the traditional finance and accounting model


Speech recognition

Big data & analytics

Finance must understand the impact of the digital world on it’s operations and operating model

Blockchain

Cloud

Robotics

Mobility

Machine learning

Artificial intelligence

Visualization

Real-time computing

Which ones?

How?

Where?

Why?


1) Ranking based on the gap between current and future state

Source: PwC CFO Survey 2017 – 400+ Finance Professionals

PwC survey results of key digital capabilities


Today’s Finance methods, structures and systems were designed to support analog or discrete processes (e.g., Budget, Close, Transactional

Processing). Tomorrow’s Next Generation Finance model will require something more.

Next Generation Finance



This is the new operating model of Next Generation Finance.

Require a new level of skillsto remain competitive

Transact events asthey occur

Dramatically reduce the cycle time of allfinance activities and the size of finance

The workforce and its new skillset will bekey enablers.

Be digitally enabled andfocused on speed

Integrate and analyze information ona real time basis


• “Siri” based on-demand insights

• >1,000x data availablefor analysis

• Deep business knowledgeneeded to interpret AI andbusiness analytics

• Dynamic portfolio investmentscenario modeling

• Real-time analytics – anywhere

• Plug-and-Play integration

Insight & action

• Transition from accounting focusto business events

• Accelerated SEC/Statutory/Tax filings

• Continuous audit

• Instant Treasury/cashposition visibility

• Fraud/compliance analytics

• Increased regulator transparency

Reporting & compliance

• Eliminate offshoring/75% headcount reduction

• Real-time digital AP/AR settlement

• Elimination of reconciliations

• Virtual closing and consolidation

• Shift to exception management

• Distributed ledger

Transaction processing

Digital Architects & Data Scientists will play key roles in Finance

Key characteristics of a Next Generation Finance Model


Finance focus

Automated and digitized

Finance focus shift in the Next Generation Digital World

To

da

yT

om

or

ro

w


Next Generation Finance will reduce the size of Finance by 50% and require a dramatic

shift in Finance skills and capabilities.



Current state headcount


Insight & action


Future state headcount


Insight & action


Next Generation Finance will reduce the size of Finance by 50% and require a dramatic shift in Finance skills & capabilities

Process mining

Analytics

Robotics

Blockchain

Cloud


“Executives widely agree that the biggest obstacle to a successful digital transformation is not the

technology, but rather, the ability to architect the changes required in the culture and people.”


Source: “2016 Gartner CEO and Senior Business Executive Survey”


Existing workforce

• Transparency on existing skillset

• Close the gap (training, coaching, community)

• Personnel restructuring/replacement

New workforce

• Bringing in new skills (data science)

• Deal with different/new demands

• Be aware of limited availability

• New limitations

Transformation expertise

Liberated byrobotic and

artificialintelligence

(process)

Share and collaborate

acrossboundaries

(information)

Assisted byadvanced decision-

making supportcenters of excellence

(organization)

Comfortablewith disruptivetechnology and

innovation(technology)

Differentaspirations,

career goals andambitions of

digital natives(people)

New skill sets and ways of working - the future Finance professional


Next Generation Finance will becapability-enabled and supported by aDigital Foundation that transacts and

reports in real time.



Next Generation Finance will be enabled by the following capabilities and supported by a Digital Foundation that transacts and reports in real time

Workforce

Collaboration

Process

Data & Analytics

The future finance workforce will be much smaller and more agile with greater analytical skills

Trading partners and stakeholders will be connected to your digital finance model

Intelligent finance processes will enable real-time processing

Real-time analytics will be supported by a digital data model

DigitalFoundation(real-time processing

integrated with analytics)


The ever-widening gap between Finance today and Finance of the future feels overwhelming.



The Path Forward

1

Embrace the Cloud

2

Develop a Digital Finance Vision,

Service Delivery Modeland Skills

3

Define Digital Data Model

4

Plot Digital Tools

5

ProcessDigitization

6

Build Digital Foundation


Thank you and questions

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the

information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the

accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members,

employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act,

in reliance on the information contained in this publication or for any decision based on it.

© 2018 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to PricewaterhouseCoopers LLP (a limited liability partnership in the

United Kingdom) which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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PwC Perspective: Next Generation Finance€¦ · new Digital world. Emerging solutions will help them respond to these ... Next Generation Finance. Require a new level of skills to