The Top Ten Accounting and Finance Transformation Drivers
By: Ciopages Staff Writer
Updated on: Feb 25, 2023
Let’s look at some key external Accounting and Finance Transformation Drivers. Today, the function of finance is in the throes of significant internal and external pressures. Understanding the external drivers necessitating finance and accounting transformation will help companies frame the context of the business case better.
Top Ten Accounting and Finance Transformation Drivers:
- Uncertainty: Economic, currency and political change are causing significant disruptions to business, and the finance function needs to respond rapidly and at times proactively to these changes.
- Pricing Pressures: Price is no longer a mere cost of goods sold plus a reasonable markup. Pricing needs to adjust to the interplay of competitors, demand, currency, and a million other factors. It seems like pricing changes several times from the time the goods have shipped from the warehouse to the retail outlets.
- Demand Variability: Demand variability – due to price, substitutes, changing fashions and fads, rapid obsolescence – is here to stay, and is a critical driver for transforming the finance function.
- Globalization – leading to opportunities elsewhere and everywhere, as well as increasing need to protect home turf from established, emerging and a new wave of competitors.
- Corporate Actions – The need to constantly be ready to manage mergers, acquisitions, divestitures, spin-offs
Today, the function of finance is in the throes of significant internal and external pressures. Understanding the external drivers necessitating finance and accounting transformation will help companies frame the context of the business case better.
- Intellectual Property – Proliferating as well as protecting intellectual property the world over with varying levels of protection
- Cash flow Management – Manage cash flow as it is the reason for businesses to be in business
- Global Trade Compliance – With dozens of regulatory agencies and thousands of regulations, adhering to compliance mandates is increasingly difficult, but essential
- Risk Management – Holistic risk management at an ecosystem level, not just individual silos is the need of the house
- Technology advances – Key technology trends impacting finance function, per Thack Brown of SAP, include Hyperconnectivity, Super Computing, Cloud Computing, Smarter World, and Cyber Security, in addition to others, are driving finance and accounting transformation.
Do you know of other external accounting and finance transformation drivers? If so, please share with us.
For finance and accounting as well as technology professionals involved in finance transformation, CIOPages.com offers a variety of finance and accounting transformation resources and a set of customizable deliverables as a part of the Finance and Accounting Transformation toolkit.