In this episode, Managing Director, Finance and Business Services Transformation at KPMG, Kim Huddle discusses the emergence of finance transformation to make changes and investments across people, process, technology and data to transform and evolve the finance department. Leading finance transformation organizations have a lower cost of doing business and a significant competitive advantage in the current market climate when they ramp up transformation and invest in advanced data, AI and innovation projects.
In this episode, Managing Director, Finance and Business Services Transformation at KPMG, Kim Huddle discusses the emergence of finance transformation to make changes and investments across people, process, technology and data to transform and evolve the finance department. Leading finance transformation organizations have a lower cost of doing business and a significant competitive advantage in the current market climate when they ramp up transformation and invest in advanced data, AI and innovation projects.
Welcome to Finance to Futurist, a Sidetrade podcast series on how innovation, data and AI are disrupting order-to-cash.
Natalie Silverman:Hi, this is Natalie Silverman for Sidetrade. Welcome to Finance to Futurist. On today's episode, we're discussing the emergence of finance transformation to make changes and investments across people process, technology, and data to transform and evolve the finance department. Please welcome Managing Director of Finance and Business Services Transformation at KPMG, Kim Huddle. Good morning, Kim, and thanks for sitting down for Finance to Futurist.
Kim Huddle:Hi, Natalie, nice to be here. Thank you for inviting me.
Natalie Silverman:Oh, it's so good to see you again. And I know that we talked a few months ago back at our webinar, and we had such a great conversation around finance transformation. So I thought it'd be great to chat with you on the podcast.
Kim Huddle:Well, I think it's a very exciting topic. And we are very focused on it at KPMG. So thank you for inviting me again.
Natalie Silverman:Oh, no problem. And for those of you that might not be as familiar with yourself, would you mind maybe just letting the audience know a little bit more about yourself and your background?
Kim Huddle:Absolutely. I'm Kim Huddle. I am with KPMG. I work in our finance transformation organization. And my primary focus is organizations going through a lot of transformations, obviously focused on shared services, Global Business Services, outsourcing, and you know, large restructurings. So obviously this whole transformation conversation is front and center in all of the work that we're doing today,
Natalie Silverman:Oh, that's perfect. Then good, I think you're at the right place, because I want to kick off a little bit with digital transformation. So starting with digital, oftentimes, it's very synonymous with adopting new technology or automation. But as you mentioned, what KPMG is really focused on and also what we're doing here at Sidetrade, is we're looking at this emergence of finance transformation that I think goes beyond just the technology to talk about making changes and investments across people process tech and data. So I wanted to just talk to you first about how has this idea of finance transformation evolved?
Kim Huddle:Well, I think it starts with expectations of the CFO today. So there's a greater expectation that the CFO is more strategic and working with the entire organization versus focusing on just the finance aspects of the organization. And with that, it's required additional capabilities within that organization. So individuals who understand data, individuals who can analyze that data and have the ability to then share information with the business that is useful and can be used to improve their process to improve their go to market strategy, you know, whatever their focus may be. And that's where I see a lot of the shift changing, it's also impacting the CIOs. Because a lot of this does rely on technology and data, which it has some responsibility for data in most cases. And so they're working closer with the CFOs, to actually figure out how to build these capabilities and an organization or center of expertise, if you will, to actually you offer these additional digital capabilities, which do require new skill sets, either retraining, or hiring new people all the time. And as you know, difficult to get some of these resources in the market and to retain them. So a lot of questions around the people aspect of you know, how do we make this a good experience for our people? And how do we make sure that they're happy and what they do, and they feel fulfilled, so that they are happy to stay with the organization,
Natalie Silverman:You bring up a great point, too, because I feel like sometimes people think when you adopt technology or automation, it actually is primarily for cost reduction, and also to downsize your finance team. But in a way, it's really more about enabling your teams, right and enabling them. And this idea of obviously, the great resignation, companies are also looking for ways to retain their employees. And I feel like technology is actually a play and leveraging data and some of these advanced ideas and skill sets is actually a way to retain employees.
Kim Huddle:Absolutely. And if an organization's capable of retraining their employees adopting automation to eliminate or reduce the amount of transactional activities, those individuals can refocus their time on these new capabilities, like they said, you know, data and analytics is significant to an organization and in many cases, it's evaluating things outside of finance. So for example, in a marketing promotion, you know, is that promotion successful? What is the most successful promotion so that as they move forward, they're using their funds for the right thing and their ROI is improving. So it is all about rescaling people versus downsizing but there is a challenge today with attracting and retaining people. So if you can remove or reduce the transactional activities, organizations are in a much better place not only to refill capabilities, but they also continue forward when they are having challenges with resourcing.
Natalie Silverman:Sure, that makes total sense. You know, and one thing I wanted to bring up was we're hearing that more companies are looking to create, quote, unquote, a culture hack. And I had to look this up, but the long and short of it is culture hacking is about finding the little things you could do every day to create that positive, iterative change. So it sounds very similar to actually the principles you'd find in the product development side of the house with Agile or Scrum. So I just wondered, you know, again, with, like you said, with the skill sets changing, and what a CFO needs to think about, and like you said, remove those tactical activities to focus on those more strategic ones, finance departments, are they ready for this culture hack? Are they ready to innovate more, you think?
Kim Huddle:Are they ready? I can tell you, my clients are, you know, very interested in how you do this, they certainly understand they have to shift that culture hack or that persona for their finance organizations, and some of the big areas that are critical and developing our innovative skills groups that are very influential, if you will, with the organization, and they want to collaborate with the organization in that does describe sort of a new product development environment. But that's what's required to actually work with your business partners across all of the organization to really offer some of these additional capabilities. If you, you know, look at a standard organization today, you know, procurement will have a data analytics team and marketing will have a data and analytics team. So if you're building a capability within an organization and a center of expertise, they have to be able to work with those various functions, because their cross functional capabilities allow them to offer those services. So the cultural aspects of this are very important. So you know, there's a very difficult skills to achieve or defined, certainly difficult to train. But you know, if you look at a traditional finance department, it's more about analyzing the financials within the organization. So it does require a big shift in how their people interact with the entire organization at large, as well as the CFO.
Natalie Silverman:I heard an interesting statistic that said, almost 30% of CFOs, are learning about some of these newer technologies in the category of quote, unquote, autonomous finance, in their own personal time. With your clients and what you're hearing in the industry, how would you enable finance professionals to embrace some of these newer technologies? And what advice would you give them on where to start? Because you know, at the end of the day, they're trying to accelerate cash flow, right and protect their cash. They're not really colonizing Mars, right?
Kim Huddle:That is true. Glad you asked this question, because we're actually working with a number of organizations right now helping them set up these capabilities. And looking at automation as the first step in that actually the first step and that is data, you have to manage and clean your data. But from that, you start looking at the automation play, to see where you can eliminate or reduce some of the noisy work, right. So that's definitely a big play. And then going beyond the basic RPA capability and looking at true Intelligent Automation is offering a lot of these capabilities, an opportunity to look at data to analyze data in a much faster way, so that it's available to the user when it's needed to actually leverage that information and make better business decisions. So I do agree, it's very important. And it's a very different mindset and a very different structure to an organization. If you look at organizations today, they're very functionally aligned and processes are not. So if you really try to think about this, from a process perspective, it makes sense to have Centers of Expertise who are not functionally aligned, but they're able to work with the functions to make sure they're delivering what's needed, what's required.
Natalie Silverman:You know, there was another quote that came after the fact that CFOs are doing more self learning about autonomous finance to say that CFOs that actually leverage AI will replace CFOs. That don't. So I thought that was a bit of a controversial statement. But you know, I think you're right, what you just mentioned around RPA, that that's not enough anymore, and some of the automation 101 that folks were dabbling with a couple years ago, again, is not getting you to where you need to be from a data-driven perspective. So what do you think? Do you think CFOs that use AI will replace those that don't?
Kim Huddle:I think that that probably makes sense and holds true to some of the things that we are seeing. I mean, clearly, the CFOs we talked to are certainly looking at this, if not implementing it or using it already. But in addition, I would like to add that a lot of CFOs we've talked to because they're responsible for the financials of the organization. They're evaluating other automation and cloud based solutions from across the business. And one of the challenges that they're having is they're agreeing to investments in cloud based solutions, and they are questioning how do I know that it's the right solution? How do I know that I getting the return on that investment. And you know, how is it that I get involved enough to understand this is truly going to be the ROI or the answer that we truly need as a business because they are accountable financially for those investments.
Natalie Silverman:You know, you mentioned earlier, the CIO and the CFO partnership. And it seems like there is more of a focus now to make sure that the IT department and the CIO is
Kim Huddle:Yeah, and it's definitely, you know, a focus for the CFO, because they certainly have to partner with aligned with the CFO, because like you said, the CFO was way the other business leaders to offer those benefits and capabilities to help, you know, make sure that you're protecting the cash flow and making the right investments. But I would say the CIOs we do a lot of CIO surveys and work with a lot of CIOs. And they're going through a different challenge as well. I more involved in these transformation projects and mean, similar to some degree in that their organizations are changing, they had on premise platforms in the past, and then moving to cloud based solutions. They're also now supporting all of these automation tools and things that the organization is technologies. And you had mentioned earlier with buying. So they absolutely have to change their mindset, they have to change their capabilities to support what the business needs. And if the CFO is at the helm of what the business needs, then it makes sense for the CIOs and the CFOs, technology playing such a larger role in driving company value, to absolutely partner in this space. And it's critical for any data analytics capabilities for organizations, which we know data is king. So you know, if you can get the information and leverage that information, organizations are doing much better at making better decisions and focusing their business where they should be focusing their business, it just and competitive advantage, it really is more important than makes sense for these two senior level people to really partner together to really deliver those capabilities across the organization will come.
Natalie Silverman:I think that makes total sense. And typically, I like to throw out one more bonus question. And usually it's one that maybe something we didn't talk about ever, that CFOs, you know, collaborate closely with other previously. So I'm going to hit you with it. But I think you'll be just fine. Obviously, inflation is on everybody's mind, right? Obviously the CFO is concerned. And typically, that means raising prices and looking at ways to cut expenditures. But what's your advice, though, for a CFO right now, because I know a lot of times again, they think about groups across the business that they traditionally have maybe reducing spend, and maybe areas like transformation. But then I've also heard, it's actually the time to actually kick it up a notch and to invest in more projects and more automation in order to actually help. What do you think?
Kim Huddle:I agree with that? And my experience is that yes, organizations are focusing on that, on top of the inflation seen as a blocker, right, as the IT person is just there to put issues, you know, we've had the pandemic and a lot of companies slowed down their programs, a lot of innovation programs, and they're ramping back up, they recognize they cannot wait, they absolutely have to do this. And to your point, when we see the economy kind of in uncertainty, that's when organizations do ramp up their transformation programs to really build for the up red flags around security. So I guess what advice do you have, future. And some of these programs, the return on that investment isn't a long period it can be some of it can be fairly quick, even six months to a year. So there's opportunities to continue to cut cost in ways that make sense. So just cutting headcount has proven to be the wrong answer. You know, if you and I'm sure, again, you're working with clients that are look at the statistics, it doesn't hold true for organizations that don't go through a transformation. If they truly go through the transformation, they can cut the cost, and they can continue down the path of improving the business model and improving their results versus just trying to cut headcount.
Natalie Silverman:Thanks, Kim, for your insights into the trying to bridge that gap to create more alignment between future of finance. For Sidetrade, this is Natalie Silverman.
Conclusion:This has been another episode of Finance to Futurist, a Sidetrade podcast series. Make sure you catch every episode by subscribing to our podcast on Sidetrade.com or through your podcast platform of choice. Thanks so much for technology and finance departments? tuning in. This podcast is brought to you by Sidetrade, and is for general information purposes only. All rights reserved.