Business & Legal
finance, KPMG, legal

Reshaping Finance: Building the Service Delivery Model of the Future

In recent decades, the service delivery model for finance has evolved from shared services to multisourcing and, most recently, to global business services (GBS), reaching across multiple processes and geographies. A chief driver behind this evolution has been the imperative to deliver transactional services more efficiently, freeing up finance professionals to add strategic value through the other two layers of their delivery model “stack”—expert services and business partnering.

Extreme automation will dramatically change this approach to service delivery. From intelligent automation to advanced analytics, disruptive technology will enable finance to provide all of its services more effectively and efficiently. These include tax, treasury, audit, planning, and other high-value activities to help the business make better decisions.

But just as technology creates advantage, it can also take it away. That is, while finance has made great strides in building its enterprise identity, it may ultimately need to relinquish some of it. In the service delivery model of the future, finance teams will be smaller, they will have less of a local presence, and they will collaborate more with other functions in the journey toward end-to-end process optimization.

Automation beyond transactional efficiency
Many finance organizations are using robotic process automation (RPA) to reduce manual effort and cost in transaction processing and bookkeeping. However, as automation becomes more advanced, it will disrupt higher-value services as well.

For example, budgeting and forecasting are important parts of business partnership, but these processes today are often mere guesstimates based on past performance, without consideration of external macro and micro economic factors. Moreover, the budgeting process often takes a long, political, and circuitous journey, with finance teams spending months iterating from local to regional to global—only to have the budget pushed back down due to concerns about sandbagging. In the end, the process is not just expensive—it is inherently flawed and static.

In the service delivery model of the future, finance will use automation to extract internal data from cross-functional systems and combine it with external data related to competitors, economic factors, emerging regulations, and more. Using this data with advanced analytics, finance will deliver much more accurate and continually refreshed forecasts in a fraction of the time.

With the assistance of intelligent automation, similarly, finance can deliver expert services more reliably and with smaller workforces. In audit, for instance, technology will help humans by quickly scouring robust datasets for compliance issues. In tax, these systems will extract key data, apply rules, and assist in tax filings.

A new look for business partnering—with less concern for geography
As a result of this automation, business partnering in the future will take on a different shape. Finance will not need to embed as many professionals throughout various business units and geographies, because accessing and analyzing data will no longer require a local presence. Instead, delivery models will increasingly use COEs, equipped with data scientists, intelligent automation, and finance experts. They will analyze internal and external data to help the business answer key questions, such as how to deploy capital, where to expand, or which product lines to grow. These COEs will be highly automated, using artificial intelligence to free up human capital for more business analysis and partnering.

With technology-enabled COEs, finance can scale expertise more effectively. Whereas past models  might have required several dozen professionals per COE to be viable, future models could have, say, 10 small COEs around the world, working together to deliver a few different kinds of regionalized expertise.

Meanwhile, automation is overtaking labor arbitrage as the most significant source of cost savings, so labor decisions will become less about location and more about accessing top talent. Unlike today’s model of large transactional hubs in low-cost locations, offshore centers in the future will be smaller, more specialized, and more automated centers for high-value services. Moreover, as finance evolves into a more strategic business partner, service providers may play an important role in that partnership, but they will need to take on more complex, more analytical work. And the enterprise will need to govern it with a well-defined model for service management.

Read the full whitepaper from KPMG to explore other anticipated service delivery trends.

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