the future of finance: robotics & finance talent development€¦ · business (deep finance and...

1© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International

Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

THE FUTURE OF FINANCE:Robotics & Finance Talent DevelopmentNovember 2018

2© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Key Themes: Digital disruption

Areas of greatest investment in technology expected in three years

Digital concerns

57% say their organisations do not have the

sensory capabilities and innovative

processes to respond to rapid disruption

are concerned about integrating cognitive

processes and artificial intelligence

61% say they are not leveraging digital as a means to

connect to their customers effectively

45%

To disrupt is to exist

72% of CEOs say that rather than waiting to be disrupted

by competitors, their organisation is actively

disrupting the sector in which they operate

see technology disruption as more of an

opportunity than a threat

60%

25% Greater speed to market

22% Digitisation of the business

21% Becoming more data-driven

21% Building public trust

20% Implementing disruptive technology

Top five strategic priorities in next three yearsAreas of greatest investment in technology expected in three years

61%

58%

55%


Key Themes: The CFO’s greatest opportunity is to better support Business Performance Management

Where do you see the CFO’s greatest opportunity to contribute to

or impact the value of the organisation?

Performance

Governance

Control

Efficiency

Innovation

Source: 2015 KPMG Global CEO Survey 'The view from the top.'

“My CFO has to focus on the numbers

but also really understand what’s

happening in the marketplace and be

able to translate that into ‘What’s the

potential impact on my business?

Where should I be making

investments? Where should I be

backing off?’”

— Financial Services CEO



The impact of technology disruption, today and in the future

In response to disruption, leading CFOs are transforming their own operating models by addressing:

— How will disruptive technology impact our finance operating model

in the next year? In the next five years? In the next 10 years?

— How will our current delivery model and locations be impacted?

How can we effectively integrate disruptive technologies?

— What are the new skill sets required of our workforce and how will

we hire and train the finance organization?

— How do we maintain, or improve, governance of financial processes

and controls?

A well-

architected use of

disruptors will enable

intelligent automation,resulting in an operating

model that achieves a

~70% reduction in labor¹while delivering on

business value and

global riskmanagement

70%

Technology disruptors are the largest drivers of change in business today. Finance must embrace the disruptors of today to transform their own operating models and unlock an environment of intelligent automation.

Disruptive technologies are transforming finance. Organisations need to develop a long-term Intelligent automation strategy

that is aligned with the enterprise strategic vision.

¹ Estimate from KPMG LLP


The CFO agenda for disruption

Leading finance organizations have developed an agenda to deal with disruption

Intelligent automation

Integrating new technologies: • Cloud ERPs

• Robotics• Artificial intelligence• Blockchain

• Mobile

Insights and analysis

New insights through:• Automated descriptive and

diagnostic analytics• New predictive and

prescriptive analytics

• Integrated businessplanning

• Local decision support

Organizational simplification

Changing work:• Fewer people• Less hierarchy• Fewer offshore locations

Skills and talent

Changing requirements:• Both strategy and finance

skills• Process and control leaders• Relationship and

collaboration

Leading strategy and capital allocationIncreasing role in innovation

• Trends and economics behind disruption• Approaching disruption at the organizational level• Maintaining an innovation portfolio

• Disciplined portfolio process and structure

Risk management: Response to disruption impacts how risks and controls are managed in an organization and the need to continuously evolve.


Analytics will shift from descriptive to prescriptive

Data Integration Analytics Capabilities Culture Change

Descriptive DiagnosticPredictive

Prescriptive

What happened?� Example: Revenue by

dimension, geography, product, service, customer

� Emerging technology: In-memory computing

� What will change: Speed of

transactions

Why did it happen?� Example: Explanations for

variances

� Emerging technology: Self-service and root cause analysis

� What will change: Speed of analysis

What will happen?� Example: Future estimates of

revenue and profitability based on demand drivers

� Emerging technology: Machine learning, unstructured data processing

� What will change: Predictive analytics

What should we do about it?� Example: Strategic scenario

analysis of revenue and profitability

� Emerging technology: AI/Cognitive big data analytics

� What will change: Hypothesis generation; advanced customer and

market analysis

Dynamic insights

Analytics will generate dynamic insights and will be utilized for prescriptive modeling, allowing leaders to influence business outcomes in real time.



Productivity and cost (using averages)

Staff @ 80% productivity = 32 hours/ week

vs

RPA software @ 80% productivity = 134 hours/ week

Recruitment costs per person = $15-$20K with 3 year average lifespan

vs

Software license per bot = $15K with unknown lifespan

Average staff salary in Australia = $81,947

Vs

Average bot salary = $0

9

© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International


Intelligent automation delivers benefits beyond

cost savings

— Up to 70 percent reduction in

human labour driven by

Intelligent automation

— Reduce governance costs with built-in controls

— 50 percent reduction in

manual reconciliations

— Reduced time for audit,

resulting in lower audit costs

— Decoupled correlation

between labor and revenue

growth

— 35 percent improvement in

capital efficiency from

shortened dispute resolution

and process cycle times

— Improved business insights and dynamic reporting and analysis

— Redeploy resources to focus

on higher value-added

activities

— Harness the 80 percent of

”untapped” data with

enhanced cognitive

processing capabilities of

unstructured data

— Dynamic, real-time data for elevated decision-making capabilities

— Unconstrained agility and

scalability in response to

changing business

requirements

— Automation enabled 100 percent transactional accuracy, eliminating the need for manual controls

— Increased security and

governance without adding

new human labor

— “No-labour” data integrity

routines

— Real-time, secure data

exchange supported by 100

percent verifiable and

auditable transactions

— Up to 40 percent increase in

labour productivity, enabling

higher focus on value-add,

business partnering activities

— Reduction of close to

consolidation cycle time by

25 percent

— Improved visibility of business trends will enable better decision making and forecasting through driver based predictive analysis

— Enhanced digital delivery

and visualization will

augment insight generation

Reduced labour, more Insights Better use of capital Accelerated growth Risk reduction Enhanced

speed-to-value

CFOs are embracing technology disruption to achieve innovation-fueled growth and accelerate short- and

long-term value creation.


What will finance look like in the future?



What will finance look like in the

future?

Finance will… The art of possible…Increase support of innovation New capital allocation approaches

Proactively lead enterprise performance Cornerstone of strategy, finance, and analytics

Employ 70% less laborEmerging technologies will change the nature of

shared services

Enable business agility Cloud everywhere and dominant platform

Increase speed of insight Amazon’s “Alexa” provides instant information

Act as role model of collaboration Process leadership is a profession

Improve forecasting accuracy Artificial intelligence (AI) processes big data

Develop new skills and talent Finance professional as a strategist

This is changing the demands of finance, and finance as we know it will be radically different in the future



New capabilities, new roles

Different finance

processes will be

automated,

leveraging various

levels of smart

automation.

Has high RQ, experience managing digital

workforce, and overall knowledge of the

systems landscape; able to identify required

F&A process changes and implement new

business solutions incorporating relevant

technologies.

Handles interactions between

different business groups and

communicates information effectively

(has extensive business knowledge

and deep technical F&A expertise).Executes complex financial models and

advises the business on the financial

and business impacts of different

scenarios (STEM/D&A background

necessary).

Focused on delivering core reporting and analytics to the

business (Deep Finance and Accounting background

(e.g., CPA, CFA)).

Takes an “outside-in” approach to develop

insights from trend signals and identifies

changes in customer and competitor

behavior and possible business

implications.

Business Solutions

Architect

Innovation and

Investment

Strategist

Business Planning

Analyst

Financial and

Regulatory

Accountant

Intelligent Automation

Financial

Data Modeler/

Scientist

R

CFO

Business Partner

Critical role for driving value and overall business performance

Has strong understanding of external markets to examine and

leverage threats and opportunities into strategic direction for the

business; has the ability to navigate ambiguity and influence a

potential shift in the business model.


Insights and Analysis… What does this mean for Business Partnering?

In the face of rapid business disruption and change, Finance must equip itself with the right tools, skills and

capabilities in order to provide leading insights and analytics, and answers to critical questions

Master the right capabilities• Advanced Analytics and Scenario Modeling• KPIs, Metrics, and Dashboards• Integrated Business Planning

Be the Enterprise Data Steward

• Master Data Management and Governance• Enterprise Data Strategy• Financial / Operational Data

Develop Business Partnership approach and acumen

• Partnership and cross-functional collaboration• Organisation and Service Delivery Model• Talent and Skills

Employ Intelligent Automation and enabling technologies

• Cloud and Mobile• Robotics and Digital Labor• A.I. and Cognitive Capabilities


Intelligent process automation

Value

Low

High

Cost

Low

High

Business Partnering

Low

High

Value

Low

High

Cost

Low

High

Business Partnering

Low

High

Additional value-add activities

+ Increased business partnering

- Transactional activities (automation)

Greater value, fewer people, lower cost

Traditional organization Future organization

Automation

Intelligent process automation

Intelligent process automation will allow finance to transcend its transactional role, resulting in enhanced business partnering and value delivery through insight generation.



From “scorekeeper” to “strategist”Strategist skill set

Intelligent automation will invert the knowledge-work value distribution and challenge existing

delivery models.

Insight delivery

Cognitive and analytics

Data normalization and governance

Foundational and transactional

Current knowledge-work Value distribution

Future knowledge-work value distribution 70% reduction in human

labor driven by Intelligent automation

Intelligent automation will

empower the finance

workforce to add more

value at rapid speeds.

Finance must reimagine its operating model to position itself to meet constantly evolving requirements.

Finance capabilities


Lifting performance of the business partner role

Low

High

Valu

e

Low High Time and Cost

— Month end coordinator

— Transactional processing and accounting

— Standard and ad-hoc

reporting

Administrator

Performance Driver

Strategist

Cost Manager

— Budget vs. actual variance

— Cost/project accounting

— Short-term planning

Partner

— Reviews and writes commentary

— Shareholder value analysis

— Root-cause analysis

— Budgeting and forecasting

— Driving decisions

— Strategic planning — Capital management

— Value-based management

— Multi dimensional profitability analysis

— Operational and financial perspective

— Enterprise portfolio perspective

— Involved in major business transactions

— P&L accountability

— Statistical decision modeling tools

Typical Finance Business Partnering Organizations

How are you preparing your organization to make the leap?

Most finance business partners are operating as administrators or cost managers. Lifting the performance of finance business partners can help drive value and overall business performance.


Finance technicalBusiness modeling

Core financial driver

analysis

Process design and

navigation

BehavioralStrategic thinking

Service management

Relationship management

Impactful storytelling

Feedback, communication,

negotiation

Program management

Navigation skills

Ambiguity and white space

New skills

Finance organisations must assess how new work impacts the skill sets of their workforce

Data utilisation and technology

1Source: Man and Machine: The Future of Jobs, Forrester Podcast

Data modeling, analytics, and visualisation

Robotic share (RQ)1

Strategic trend analysis

Research capabilities

Design thinking background

Programming expertise



Talent management

Having a holistic approach for addressing talent, tailored to your organisation’s specific needs, will be essential

Develop rotational programs

to retain and develop high

performers and future leaders

Understand critical roles and

single source dependency of

institutional knowledge

Incorporate a flexible

workforce into the

organisational structure

Develop a multifaceted

workplace ecosystem

(e.g., onshore, nearshore)

Partner to build

capabilities that feed into

an environment of high-

performing talent

Invest in career path design,

learning, and development

Reskill workforce to deliver

more business-centric services

Redefine role definitions and

core competencies

Develop succession plan to

address the retiring and

incoming workforce

BUILD

BORROW

SAVE

BUY

Foster relationships with

key universities

Source nontraditional

backgrounds (e.g., STEM)

Redesign talent

acquisition strategy for

digital natives

Redefine employee value

proposition to retain

millennial generation Sources: Forrester, “Business Agility: The Contingent Workforce Paradox”

Forrester, “The Future Of White Collar Work”

KPMG International, "The view from the top," (November 2015)



Building Capability

Organisations without integrated capability frameworks typically create misaligned learning and development programmes that provide few tangible benefits, lack alignment to business strategy and are designed to meet learner preferences.

Culture & Behaviours …— Behavioural Capabilities

— Change Management

— Sustainability

Collaboration andCommunication…— Iterative development approach

— Communication plans &

interventions

Learning & Development …— Learning Solutions

— Career Stories

— KPMG training

Knowledge & Tools …— Capability Frameworks

— Proficiency levels

— Technology & Platforms

Learning Enablers

1 2

3 4

An integrated capability framework includes four key components to align development to strategy


Example Finance Capability Framework

Leadership

LEAD

ERSH

IPCA

PABI

LITIE

SFIN

ANCE

TECH

NICA

L CA

PABI

LITIE

S

EXECUTE

Finance Operations

Finance Systems, Data and

Processes

Governance, Compliance & Risk

Business Reporting

Accounting & Control

PARTNER

Capital Management

Planning, Budgeting & Forecasting

Financial & Performance Management

Investment Appraisal

Relationship Management

Sourcing & Category

Management

Cost ManagementRevenue Management

LEAD

Leading Sustainable

Change

Continuous Improvement

Growth & Innovation

Analytics & Insight Negotiation

Leadership Achievement StrengthInsight

Break Through Thinking Coach and Develop

Engage and Inspire

Empower with Accountability

Collaborate

Deliver Results

Influence

Confidence

Optimism

Discipline

Break Through Thinking

Commercial

Curiosity



Dawn Edwards-Jones email: [email protected]


© 2018 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 692663

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