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Welcome back to Count Me In,

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IMA's podcast about all things affecting
the accounting and finance world.

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This is your host Mitch Roshong,

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and today I will be previewing
episode 168 of our series.

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Before I introduce our speakers we
will first set the stage for the topic.

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The global pandemic in 2020 and 2021
has shifted how finance and accounting

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professionals work in
a virtual environment.

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And this change has also
triggered opportunities for
the finance organization to

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evaluate and introduce
emerging technologies.

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Companies want to find ways to
deliver financial results faster,

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amid grow complexities and regulations,

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as well as improved financial
transparency for business partners.

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To discuss these trends
from the CFO perspective,

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we were fortunate to be joined
by Mark Marmon and Janis Parthun.

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Mark is the VP of Finance
Transformation at RGP,

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and Janis is the VP of Advisory
and Project Services at RGP.

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They joined my co-host Adam to provide
insights on what they are observing from

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the marketplace and their clients.

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So to hear about how to best manage the
complexities relating to transformation

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through emerging technologies,

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keep listening as we head over
to their conversation now.

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Janis and Mark, thank you so much
for coming on the podcast today.

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And as we looking into 2022,

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I wanted to start off by asking you both,

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what are some of the top
trends and priorities for
financial leaders as we look

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into this new year?

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Adam, that's a great question and
this is Janis, by the way. You know,

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CFOs are really playing a crucial role
to drive change and to be value creators.

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So according to a 2021 Gartner
survey on the CFO perspective,

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there's really a shift from a
value protection to value creation

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and prioritization, of digital
initiatives and investments,

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and from a value creation
perspective, it's really,

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focusing on a strong forecasting process.

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And this is especially critical
time for CFOs of companies

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who may be carrying inventory to
have a strong forecasting process,

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to avoid inventory
supply chain issues and,

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just overwhelming sales
teams and processes.

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And then from a digital
investment perspective, over

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80% of CFOs have suggested to
increase their investments.

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And emerging technology
was one of the CFOs top

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five strategic business
priorities for 2021 and also a

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significant increase from
2020. So it, you know,

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it really says a lot about the
importance of having to take a look at

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emerging technologies, and how
that can impact the CFO's role.

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And, you know, by the way,

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IMA also has a great resource on the
transformation of the finance function and

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association with RPA.
And interesting enough,

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the research had discussed in terms
of how it's possible to have over

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70 percent of general accounting
operation activities that can be

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automated using demonstrated technologies.

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So I found that that was really
interesting to read through,

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in one of the resources, from IMA.

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And so going back to the discussion
on the value creation and digital

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investments, what does this mean?

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So this is stemming from the need to
automate core processes and having

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to transition to generate more
data insights and future outlook.

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And so according to another
Gartner source in 2021,

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it was the top priorities for
finance leaders, CFOs, controllers,

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and FP&A leaders now all expect
to focus on digital initiatives

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and the top priorities that are
expected to be taking more time

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to implement.

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And these top priorities
mentioned included advanced data

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analytics, technologies,
and tools and finance,

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and there's a wealth of data that can
provide insight to make operational

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decisions. And it's also
knowing how to use it.

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Another one is the robotic process
automation and other workflow automation

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technologies. RPAs
deliver speed, efficiency,

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and cost optimization
for repeatable processes.

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But then if you add extendable
platforms that incorporate hooks

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into machine learning and
artificial intelligence,

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it really becomes more important
as leaders to look beyond the

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simple rule based
workflows. And I would say,

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thirdly is the human element,

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which is accelerating digital skills
and that's hiring an upscaling talent

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to accelerate adoption
of digital technologies.

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So now the deployment could be difficult

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at times and having to spend time
significantly with employee engagement

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and retention, as well as hiring
and growing digital skills,

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but it be beneficial to have the
ability to design flexible processes

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and then enable aspects of
self-service reporting for users.

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So I would say the good news is that
the new generation of the workforce

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entrance are digital natives.

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So not only do they
embrace the technologies,

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but they also expect from their employers,

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those are some of the key highlights
that I wanted to at least talk through in

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terms of trends.

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Well, Janis, thanks so much
for showing that. I mean,

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those are some great top
trends and priorities that,

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financial leaders need to look at.

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One topic that I have heard that I didn't
hear you bring up was financial close

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optimization. You know, this is one way
that companies drive results faster,

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are able to, do budgeting. How does
this change the game? And maybe Mark,

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we can have you start on this one.

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Yeah. Thanks Adam. So first let's define,

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we're talking about when we talk
about, close process optimization,

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we're really looking at eliminating some
of the activities that are really not

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all that critical to the
close cycle. So in many cases,

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you know,

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many folks out there listening probably
know that there are reports generated

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that really aren't read and, evaluated
by anybody in the organization.

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There's a sequencing of efforts
across the accounting team with

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redundancies and bottlenecks.

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And the whole idea of close
optimization is you want

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to take those bottlenecks out and you
want to reduce those redundancies.

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So traditionally,

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when we looked at close optimization
with companies that we serve,

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we were really focused on taking
the cost out of the process,

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you know,

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the fewer FTE's that you
needed to actually perform
all these manual repetitive

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tasks, resulted in a
little bit of cost savings.

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So today,

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as we look at what's happening in the
financial flows and looking at the close

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cycle,

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significant increase in demand for
efficiency around the close cycle,

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the CFO is asking the
accounting function to invest

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their time into providing
analysis and really

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predictive analysis into what's going
on for the key stakeholders of financial

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and, you know, financial of
that financial information.

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So when we look at executives and
investors and they want insight into the

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business, they want to know how those
financial results compare to expectations.

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So it's causing a shift and that shift is

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taking out the routine repetitive work
that we've traditionally done with

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spreadsheets and moving it to a more
automated approach. And since frankly,

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the spreadsheets are somewhat unstable
and they're kind of ineffective as

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evidence for your external audit,

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then a better performing automation
becomes pretty critical as part

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of the accounting close.

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So the question becomes what types
of automation are most effective.

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So clearly when we look at the
ERP systems that are out there,

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they're recognizing there's an increased
need for more tools as part of the

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close cycle to support it. And
they're building in new modules,

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they're building new Bolton
applications that can help increase the

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efficiency of the close process.

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One interesting aspect is we're seeing
a number of these large ERPs start to

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partner up with purpose-built solutions
and actually use purpose-built

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solutions to come in and do certain
types of modules or certain types of

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activities like account reconciliations
or transaction matching.

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So those purpose-built
platforms that we're seeing,

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they're evolving because over the years,

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they're years ahead of the ERPs
and they are much more effective

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at actually providing some of
these key transaction based

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initiatives.

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And they're already kind of on the
front end of the advanced transformation

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and automation life cycle.

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So they're continuing to add their
capabilities based on their customer's

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experiences, and they're frankly,

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more stable and more dependable than
the traditional Multilink spreadsheet.

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So the next iteration that's going to
support those purpose-built platforms and

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a good example of a purpose-built
platform would be BlackLine.

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Many of the folks out listening
may be familiar with BlackLine.

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The next iteration is the use
of robotic process automation,

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which Janis mentioned.

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The use of bots to come in
and actually accelerate the

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speed of repetitive routine transactions.

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And then linking that back into a
purpose built solution allows the

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entire close process to become
streamlined and much more effective.

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And then frankly,

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the whole financial close process moving
into new emerging technologies has

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a pretty dramatic impact
on the workflow or the

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workforce out there, which Janis,

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you may want to share some thoughts
on the impact on the workforce with

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the digital skills required.

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Yes, that's right, Mark.

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It's also important to be thinking
about your people and the talent and

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having to attract and retain
people with a digital skillset.

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Now in our current workforce,

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millennials and gen Z employees tend
to gravitate towards firms that are

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embracing technology for really two
reasons. They're comfortable with,

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or they're accustomed to the technology
and as they've grown up with the

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technology or essentially
digital natives,. And two,

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research shows that they're motivated
by having interesting work in which they

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can see their contributions and using
technology to provide insight and

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driving the organizational
improvements are motivating to them.

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I would also say that you would want
to take into consideration other

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stakeholders in participation outside
of accounting when it comes to around

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people, and having to,
incorporate emerging technologies.

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This may be CTOs and CISO's and having
to take that into consideration. And

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also having to assess and think about
the digital workforce, especially,

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at this current, stage and time as well,

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and scaling the use of the systems and
tools across the regions and countries,

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and be able to collaborate with
automation tools that's in the norm to be

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successful.

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So what about any emerging
technologies for FP&A,

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we've talked about that a little bit.

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What does the CFO now
have at their fingertips?

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Well, Adam, similar to the
accounting close process,

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FP&A has also been historically really
heavily dependent on spreadsheets.

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Whether we're talking about building
budgets, looking at forecasts,

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multiple financial scenarios,

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the spreadsheet has
been the tool of choice.

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And when you think about the CFOs,
really asking for these days,

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they want greater insight
into the business,

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they want alignment between the
budgets and the business planning,

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they want greater accuracy and more
timely forecasts. And, you know,

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you think about the volume of transaction
activity over the past few years in

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the M&A space. And you
realize that capital planning
is more crucial than ever.

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And frankly,

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spreadsheets are really
difficult to make all

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of this work.

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We also are seeing a heavy
investment in private equity,

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into growth companies this past year.

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We're finding that those that work in
companies are part of a PE portfolio,

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know that those firms create a
lot of data and a lot of insights.

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And they ask for that information
in real time. And frankly,

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they often asked for that
information yesterday.

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So as the key investors are constantly
strategizing on how they want to grow the

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business or add to the business
or carve out of the business,

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or simply monetizing in real
time. They want constant modeling.

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So as businesses are taking a look
at how they can meet those needs,

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and then you put in the additional
challenge that's come through from the

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pandemic over the past couple years of
a change in the demand for goods and

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services and the ensuing, impacts
of a global supply chain crisis.

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We're finding that companies
are constantly forecasting and

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in many cases re forecasting,
you know, maybe 2,

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3, 4 times during the course of a period.

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So the FNA function in
order to add business,

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or in order to add its business value, it

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means they can't spend days and days
developing these types of spreadsheets.

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And they've got to start moving and
pivoting to a more effective way for

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scenario planning, where they can give
consideration to multiple futures,

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predictive analytics, seeing
that information in real time,

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providing service reporting
to the executive team and

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with all of these challenges,

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you've got to also consider
where the data comes from and

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a CFO is looking for consistency.

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And we're finding that with the
significant number of sources

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of data in an organization that
oftentimes they're not getting one

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version of the truth.

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They're getting information from different
source data that comes out and gives

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them different answers, which makes it
difficult for their business decisions.

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So what the companies are starting

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to evolve into is more of an enterprise
performance management concept. Now,

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EPM is a concept that
really derives to a holistic

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approach to looking at financial
data across an entire organization.

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You want the business to be using the
same data that's being used by the

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accounting function for
their external reporting.

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And you want the decisions to be
coming off of the same types of data.

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And so purpose-built platforms that
are really designed around performance

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management are becoming more of
the norm. And one, for example,

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that is extremely strong in
that space is One Stream.

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It's an opportunity to take a look at
everything from the close process at

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the front end source all the way through
to the back end business reporting with

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KPIs and dashboards. So
looking at consistency,

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looking at the planning functionality,

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making sure you can do multiple scenarios
and all of your planning in minutes,

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as opposed to days or
weeks on a spreadsheet.

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That's what the beauty of all
of this automation is bringing.

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The other part that's really
impressive about some of these,

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platforms that are starting to
become more mainstream is that

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the CFO can access that information
very quickly. It's accurate.

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And the cost of this is
actually being driven down.

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So while these new platforms
are extremely robust,

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they are user friendly.

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And we're finding that the implementation
is actually becoming much more cost ef

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fective and to top it
all off what we're also,

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seeing which Janis said a couple of times,

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is that the workforce of the future
is digitally enabled and they

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expect to have access to
these technologies as they
grow in their careers.

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For sure accuracy, accurate data
is so important, especially now,

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in a digital world.

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And even when you're talking
about accuracy of data it
does make me think of the

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auditor who is trying to audit all of
your books and all of those things.

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And so going into the next question,

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what impact to the auditor and
regulators will all the things,

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different things we have
spoken about today have now on

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the folks in that community, but
also looking forward. And, Janis,

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I'll give that question to you.

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Great, thanks Adam. I'm happy to answer.

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As you've heard from Mark and the
trends I've mentioned earlier,

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the shifts to focus on value creation
and digital prioritization really

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leads to automation of core processes
and the finance transformation,

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but this shift also impacts the auditor
and the regulator community and the

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need to stay current with
emerging technologies.

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So if you think about technologies
within a scope of a financial audit,

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there's been an increasing trend of
companies incorporating the cloud

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environment, the software platforms,
either ERP or purpose-built,

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and other solutions such as in-house
platforms, internet of things,

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and connectors just to
improve the workflow.

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And as the accounting and the compliance
profession continues to evolve,

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so are the auditing approach
such as the technologies to

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improve the audit process, RPAs,
bots and data analytics tools,

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and as

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according to ISACA study in 2021 serving,

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over 4,500 members on
emerging technologies,

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it was interesting to see that 59%

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cloud related technologies weren't used
in terms of top emerging technologies.

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And then what came second was 34%
in artificial intelligence and 27%

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in the internet of things.
So it's interesting,

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as you can see in terms of the
trends and the perspectives,

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that's also evolving with the
auditor and the regulator community.

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Now, typically from an auditor
perspective, you'll want to consider,

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the objective or the business rules,

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or the materiality of the
function or transactions process.

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And this could include having the
change in the policy process to

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trigger a review of an existing
rule set and essentially preventing

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introductions of inaccuracies
or missteps in the activities.

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But now there are additional
elements that you need to consider as

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more emerging technologies are
incorporated into the daily financial

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transactions process. And this could
be in terms of the full understanding

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of the system environment. As now,
there are multiple layers associated,

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in incorporating emerging
technologies and also having

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to have considerations in
terms of the testing approach.

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So this can involve the change management
process having to make sure it's

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inclusive of the systems and use
having to consider appropriate,

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secure design and the user
access and the rights,

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protocol in place to monitor and the
alert of errors that occur and just be

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consistent. And these
are only a few mentioned,

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but definitely there's a multitude of
elements to consider as more complexities

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are, introduced. Now,

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examples of emerging technologies that
are relevant for financial audits may

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include bots and RPA, as well as machine
learning and artificial intelligence.

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For bots and RPAs, a good

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example would be automation
of accounts receivable,

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reconciliation that's based on
specific requirements defined to

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run on a recurring basis.
For machine learning and AI,

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it could be examples,

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related to credit and collection
management with customers.

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I'd say a good example of this,

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we had mentioned earlier in terms of,
BlackLine, but there's a good example,

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in terms of the BlackLine AR intelligence,

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where they offer AI to be able to
analyze customer payment behavior,

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to identify trends,

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and then to understand the
payment behavior to help
manage the cash management.

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So,

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FP&A technologies might be less
material to financial audits in terms

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of more focusing on supporting
forecasting, as well as
operational functions,

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but you

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can never necessarily rule things out
because it just depends on what is being

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leveraged and, used for in that.

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So having to share multiple
perspectives from CFOs and controllers,

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to auditors and regulators,

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what continues to be relevant for
all parties is to really just to

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stay current and seize opportunity
for change and finance transformation.

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And this includes earlier,

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we talked about the financial
close and FP&A technologies,

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as well as technologies utilized
to improve the financial audit

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process. And one thing you know,

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let's not forget that organizations also
need to embrace emerging technologies,

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and that includes upscaling the current
talent in the workforce training

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and on the job experience,

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as well as hiring talent with
the needed digital skillset.

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So organizations that don't embrace
technologies will be unable to

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attract the top Millennial and
Gen Z talent who may expect this.

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This has been Count Me In IMA's podcast,

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00:22:52,210 --> 00:22:55,500
providing you with the latest
perspectives of thought leaders from the

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accounting and finance profession.
If you like what you heard,

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00:22:57,861 --> 00:23:01,180
and you'd like to be counted in for
more relevant accounting and finance

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00:23:01,290 --> 00:23:04,900
education, visit IMA's
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