In today’s evolving business landscape, finance functions need to do more than just manage transactions. The NextGen finance function represents a transformative approach, integrating advanced technologies and strategic insights to drive business value and enhance decision-making. All finance teams should aspire to grow and adapt their skills as needs change, but how can you ensure your development is focused in the right areas? There are some key areas your team can focus on to work towards becoming a NextGen finance function: Adopting advanced technologies like artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), blockchain, and cloud computing is crucial – no more manually pulling data from several spreadsheets to spend hours creating reports. These tools automate routine tasks, enhance accuracy, and improve efficiency, freeing finance professionals to focus on strategic activities. NextGen finance functions employ sophisticated data analytics and tools. Moving from descriptive and diagnostic analytics to predictive and prescriptive analytics provides deeper insights and supports data-driven decision-making. Ensuring you are using the tools which best suit your needs is essential for ensuring efficiency and reducing time spent on manual work. Finance departments are increasingly becoming strategic partners within organisations. They provide insights and guidance that drive strategic planning, performance management, and value creation, working closely with other departments to align financial goals with business objectives. To provide this support and guidance to their organisations, NextGen finance teams rely on their tools and the deep analytics these tools provide.The nine characteristics of a NextGen finance function
1. Digital transformation
2. Advanced data analytics
3. Strategic partnering
4. Agility and flexibility
Agility is crucial for responding quickly to market changes, regulatory updates, and business needs. An agile finance function can reallocate resources, adjust budgets, and modify strategies swiftly to stay ahead of the curve – only possible if the processes, tools and people are in place to cope with fast changes.
5. Enhanced reporting and visualisation
Using advanced reporting tools and data visualisation techniques, NextGen finance functions deliver clear, real-time, and actionable financial information to stakeholders. This enhances transparency and supports better decision-making, again relying heavily on the finance team’s ability to use their data effectively to produce relevant reports within the tools they have at their disposal.
6. Talent and skills development
Investing in upskilling and reskilling the finance team is essential. Continuous learning in areas such as data science, business analytics, strategic management and sustainability (an area of the business that is becoming increasingly more finance-focused) ensures the team can handle new technologies and strategic tasks effectively.
Did you know VantagePoint offers training courses for finance professionals and teams covering a range of relevant topics, including IFRS, ESG and sustainability, IPSAS and of course, NextGen finance functions. All courses can be tailored and delivered bespoke in-house, too!See our booking page to browse courses →
7. Focus on value creation
Finance teams who are future-focused are shifting from cost management and efficiency to value creation and growth. NextGen finance functions identify and pursue opportunities for revenue growth, cost optimisation, and innovation, they then communicate these with the wider organisation to ensure opportunities are not missed.
8. Robust risk management
By implementing advanced risk management practices, NextGen finance functions look to leverage technology that allows them to identify, assess, and mitigate financial, operational, and strategic risks more effectively. The finance team can also help to identify appropriate controls and create governance to ensure risks are reduced and solid processes exist to guide the organisation.
9. Sustainability and ESG reporting
Incorporating sustainability and environmental, social, and governance (ESG) factors into financial planning, reporting, and decision-making reflects the growing importance of sustainable practices in business. Increasingly, sustainability initiatives are finding their way to the doorstep of the CFO or FD, meaning these individuals (who previously wouldn’t have had much to do with sustainability) now need to be across a different type of governance and reporting requirements.
An example of this in Europe would be the CSRD (Corporate Social Responsibility Directive) regulations coming into force in a graduated fashion over the next few years. The requirements for reporting under the CSRD incorporate information held by finance teams, as such, more businesses are looking to their finance team for support in compliance with the regulations.
In conclusion, a NextGen finance function is...
In essence, it’s a finance function that successfully transforms the traditional role of finance into a forward-looking, technology-enabled, and strategic component of the organisation, capable of driving growth and innovation in an increasingly complex and fast-paced business environment.
This makes sense, but why should your organisation look to become one? Let’s see some of the benefits to your organisation.
The benefits of becoming a NextGen finance function
You’re familiar with the features but the benefits of moving in this direction may not be immediately clear. Let us take you through four key benefits of driving towards becoming a NextGen finance function:
Increased efficiency and accuracy
Leveraging advanced technologies such as AI, machine learning, and robotic process automation automates routine tasks, reducing manual errors and significantly enhancing operational efficiency.
Enhanced strategic decision-making
Employing advanced data analytics and big data tools allows finance teams to gain deeper insights and provide predictive and prescriptive analytics, supporting more informed and strategic decision-making.
Improved agility and responsiveness
An agile finance function can quickly adapt to market changes, regulatory updates, and evolving business needs, enabling organisations to reallocate resources, adjust budgets, and modify strategies swiftly and effectively.
Greater focus on value creation
Shifting the focus from traditional cost management to value creation enables finance functions to identify and pursue opportunities for revenue growth, cost optimisation, and innovation, driving overall business growth and sustainability.
Key takeaways
To keep pace with the rate of change in the finance world, your team needs to be ready to change too. Understand the criteria that make a future-looking, or NextGen, finance team and ensure that your team has been given the right knowledge and skills to enable them to support the change coming.
VantagePoint can support your transformation journey – our expert consultants can advise, implement and manage your whole change project to move your finance team firmly to the centre of your organisation.
Our training team can also help prepare your team by providing best-in-class training on becoming a NextGen finance function, either delivered at one of our swanky hotel classroom locations, or within your office if you’d like an in-house bespoke version especially for your team. See our NextGen course schedule and book now -->
Get in touch with us today by clicking the button below to see how we can help your finance function become NextGen.
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