ep . report public sector economics Maps the challenges facing the finance function. Finance functions are increasingly given greater and more comprehensive responsibilities within the organizations in which they operate. It places demands on the finance manager as an individual as well as the competencies and working methods of the finance function. Our report shows that CFOs have clear strategic priorities for the future. Despite this, there are signs that development is not going fast enough. Executives from authorities, municipalities and regions participate in the report.
CFOs have a clear strategy going forward
The financial function and its areas of responsibility are becoming increasingly broad. This places greater demands on cooperation and partnership between the finance function and other units within the organization. According to the report, collaboration and partnership are the most important strategic priority for CFOs.
Another important strategic priority is increasing digitization and the need for new skills. Digitization is changing the way employees work in managing finances. This will lead to new ways of working, demands for shift in skills and increased technical competence.
During COVID-19, finance functions have shifted focus – from development opportunities to core businesses. With the improvement of the COVID-19 situation in the second half of 2021, the focus was once again directed towards development opportunities. Sustainability issues also received a stronger focus.
Collaboration with other organizations and external stakeholders is becoming increasingly important
The main theme of the report is the future opportunity for the financial function to support and assist other operations with effective new services, insights and analytics. Stronger collaboration is an important strategic priority for many CFOs. However, before the finance function can assist other processes with new and more efficient services, an internal change is required, for example in the areas of business methods, digitization and analysis.
The advantages of close collaboration between finance and core operations are many. The report highlights, among other things, the potential for better analysis of operating data in relation to financial statements. Through close collaboration, better and more nuanced questions can be asked, enabling successful dialogue within the organization.
Digitization opens the way to creating increased value – but the financial career is only just beginning
Without digital tools that enhance automation, better data quality, and forward-looking analytics, it is difficult for the finance function to fully support the rest of the organization. Despite this, several report participants mentioned that the financial function is still in an early stage of digitization. Many participants highlight that digitization initiatives typically extend to the entire organization, creating a more complex journey. In the public sector, there are also security issues that expand the perspective of time. Thus, there is great potential going on in the field of digitization.
The finance function of the future places new demands on the competency profile
In today’s financial job transformation, the skills profile is becoming increasingly complex. The need for system-related knowledge is essential in digital transformation. At the same time, the importance of continuing traditional financial efficiency, which is combined in the best of the worlds with more technical knowledge, is highlighted. The relationship between the finance function and information technology is becoming increasingly important. Having competence within the finance function that can extend this collaboration is supposed to be a success factor for the success of the transformation in the future.
The importance of correct leadership in the financial function of the future
In close collaboration with the organisation, the finance function leader is expected to have an important role with greater responsibility. The top six competencies according to the survey and experience to successfully lead a finance function in the next five years are:
- Lead and develop strong teams
- The ability to connect images in general
- Strategic planning and development
- Leading bigger change projects
- The ability to use large amounts of data
- Ensure that digital strategies support the organization’s strategy.
Introduction to the road
Navigating the right way and successfully transforming in a changing environment involves significant challenges. To successfully meet the challenges, a finance function in the public sector must focus on five areas:
1. Meet the future demands of leadership within the finance function
The finance function leader must take a proactive, strategic and value-creating role. Greater demands will be placed on the leader’s ability to combine budget and financial results with operational activities.
2. Response to skill shift
The competency map changes within the finance function. Traditional financial competence must increasingly be complemented by operational and systems knowledge. Being an attractive and up-to-date business owner is crucial.
3. Accelerate technology development
Technology development in the form of automation and implementation of digital tools can increase cost efficiency. In addition, time is freed up for more value-creating activities. In order to accelerate development, the finance function needs to embody and demonstrate the operational value generated by investments in new technology.
4. More forward-looking work
The rapidly changing environment places greater demands on continuous analysis so that decisions can be made on a good basis and in a timely manner. Employees in the finance function have ample opportunities to take on the role of partner in the business and help gain valuable insights.
5. In the wake of the epidemic
The COVID-19 pandemic has imposed demands on leadership and flexible working methods in financial functions. The pandemic has also highlighted the need to think again – how can the finance function effectively deal with the changes brought about by digitalization and changes in the outside world?
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