Welcome back to Count Me In,

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

This is your host Mitch Roshong,

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

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

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

professionals work in
a virtual environment.

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

evaluate and introduce
emerging technologies.

Companies want to find ways to
deliver financial results faster,

amid grow complexities and regulations,

as well as improved financial
transparency for business partners.

To discuss these trends
from the CFO perspective,

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

Mark is the VP of Finance
Transformation at RGP,

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

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

the marketplace and their clients.

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

through emerging technologies,

keep listening as we head over
to their conversation now.

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

And as we looking into 2022,

I wanted to start off by asking you both,

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

into this new year?

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

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

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

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

and prioritization, of digital
initiatives and investments,

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

focusing on a strong forecasting process.

And this is especially critical
time for CFOs of companies

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

to avoid inventory
supply chain issues and,

just overwhelming sales
teams and processes.

And then from a digital
investment perspective, over

80% of CFOs have suggested to
increase their investments.

And emerging technology
was one of the CFOs top

five strategic business
priorities for 2021 and also a

significant increase from
2020. So it, you know,

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

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

And, you know, by the way,

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

association with RPA.
And interesting enough,

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

70 percent of general accounting
operation activities that can be

automated using demonstrated technologies.

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

in one of the resources, from IMA.

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

investments, what does this mean?

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

to transition to generate more
data insights and future outlook.

And so according to another
Gartner source in 2021,

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

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

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

to implement.

And these top priorities
mentioned included advanced data

analytics, technologies,
and tools and finance,

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

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

Another one is the robotic process
automation and other workflow automation

technologies. RPAs
deliver speed, efficiency,

and cost optimization
for repeatable processes.

But then if you add extendable
platforms that incorporate hooks

into machine learning and
artificial intelligence,

it really becomes more important
as leaders to look beyond the

simple rule based
workflows. And I would say,

thirdly is the human element,

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

to accelerate adoption
of digital technologies.

So now the deployment could be difficult

at times and having to spend time
significantly with employee engagement

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

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

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

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

entrance are digital natives.

So not only do they
embrace the technologies,

but they also expect from their employers,

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

terms of trends.

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

those are some great top
trends and priorities that,

financial leaders need to look at.

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

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

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

we can have you start on this one.

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

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

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

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

you know,

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

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

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

redundancies and bottlenecks.

And the whole idea of close
optimization is you want

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

So traditionally,

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

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

you know,

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

tasks, resulted in a
little bit of cost savings.

So today,

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

cycle,

significant increase in demand for
efficiency around the close cycle,

the CFO is asking the
accounting function to invest

their time into providing
analysis and really

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

and, you know, financial of
that financial information.

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

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

So it's causing a shift and that shift is

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

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

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

evidence for your external audit,

then a better performing automation
becomes pretty critical as part

of the accounting close.

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

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

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

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

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

efficiency of the close process.

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

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

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

activities like account reconciliations
or transaction matching.

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

they're evolving because over the years,

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

at actually providing some of
these key transaction based

initiatives.

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

and automation life cycle.

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

experiences, and they're frankly,

more stable and more dependable than
the traditional Multilink spreadsheet.

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

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

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

The next iteration is the use
of robotic process automation,

which Janis mentioned.

The use of bots to come in
and actually accelerate the

speed of repetitive routine transactions.

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

entire close process to become
streamlined and much more effective.

And then frankly,

the whole financial close process moving
into new emerging technologies has

a pretty dramatic impact
on the workflow or the

workforce out there, which Janis,

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

the digital skills required.

Yes, that's right, Mark.

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

having to attract and retain
people with a digital skillset.

Now in our current workforce,

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

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

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

technology or essentially
digital natives,. And two,

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

can see their contributions and using
technology to provide insight and

driving the organizational
improvements are motivating to them.

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

stakeholders in participation outside
of accounting when it comes to around

people, and having to,
incorporate emerging technologies.

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

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

at this current, stage and time as well,

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

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

successful.

So what about any emerging
technologies for FP&A,

we've talked about that a little bit.

What does the CFO now
have at their fingertips?

Well, Adam, similar to the
accounting close process,

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

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

multiple financial scenarios,

the spreadsheet has
been the tool of choice.

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

they want greater insight
into the business,

they want alignment between the
budgets and the business planning,

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

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

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

And frankly,

spreadsheets are really
difficult to make all

of this work.

We also are seeing a heavy
investment in private equity,

into growth companies this past year.

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

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

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

they often asked for that
information yesterday.

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

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

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

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

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

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

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

We're finding that companies
are constantly forecasting and

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

3, 4 times during the course of a period.

So the FNA function in
order to add business,

or in order to add its business value, it

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

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

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

predictive analytics, seeing
that information in real time,

providing service reporting
to the executive team and

with all of these challenges,

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

a CFO is looking for consistency.

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

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

version of the truth.

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

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

So what the companies are starting

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

EPM is a concept that
really derives to a holistic

approach to looking at financial
data across an entire organization.

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

accounting function for
their external reporting.

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

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

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

that is extremely strong in
that space is One Stream.

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

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

KPIs and dashboards. So
looking at consistency,

looking at the planning functionality,

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

as opposed to days or
weeks on a spreadsheet.

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

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

platforms that are starting to
become more mainstream is that

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

And the cost of this is
actually being driven down.

So while these new platforms
are extremely robust,

they are user friendly.

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

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

seeing which Janis said a couple of times,

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

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

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

in a digital world.

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

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

And so going into the next question,

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

different things we have
spoken about today have now on

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

I'll give that question to you.

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

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

the shifts to focus on value creation
and digital prioritization really

leads to automation of core processes
and the finance transformation,

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

need to stay current with
emerging technologies.

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

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

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

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

and connectors just to
improve the workflow.

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

so are the auditing approach
such as the technologies to

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

and as

according to ISACA study in 2021 serving,

over 4,500 members on
emerging technologies,

it was interesting to see that 59%

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

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

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

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

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

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

the objective or the business rules,

or the materiality of the
function or transactions process.

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

trigger a review of an existing
rule set and essentially preventing

introductions of inaccuracies
or missteps in the activities.

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

more emerging technologies are
incorporated into the daily financial

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

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

in incorporating emerging
technologies and also having

to have considerations in
terms of the testing approach.

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

inclusive of the systems and use
having to consider appropriate,

secure design and the user
access and the rights,

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

consistent. And these
are only a few mentioned,

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

are, introduced. Now,

examples of emerging technologies that
are relevant for financial audits may

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

For bots and RPAs, a good

example would be automation
of accounts receivable,

reconciliation that's based on
specific requirements defined to

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

it could be examples,

related to credit and collection
management with customers.

I'd say a good example of this,

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

in terms of the BlackLine AR intelligence,

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

to identify trends,

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

So,

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

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

but you

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

leveraged and, used for in that.

So having to share multiple
perspectives from CFOs and controllers,

to auditors and regulators,

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

stay current and seize opportunity
for change and finance transformation.

And this includes earlier,

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

as well as technologies utilized
to improve the financial audit

process. And one thing you know,

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

and that includes upscaling the current
talent in the workforce training

and on the job experience,

as well as hiring talent with
the needed digital skillset.

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

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

This has been Count Me In IMA's podcast,

providing you with the latest
perspectives of thought leaders from the

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

and you'd like to be counted in for
more relevant accounting and finance

education, visit IMA's
website at www.imanet.org.