Finance 2025: digitized and disrupted
Hi. I'm Neil same I'm the US European, finance, consulting, lead for. IBM. Global, business services okay. So welcome, to the. List of six, videos that you'll, see following, this and. It's a direct, discussion. On a white paper that we wrote called finance. 2025. Digitized. And disrupted, and. This really looks at the vision of what the finance function will be like and will act like and feel like in. The next seven or eight years so. There are six key things that want to bring out here number, one we, believe robotics, will become the norm and, replace a lot of the transactional, activities, number two blockchain. Will be the key differentiating. Technology. That, will be pervasive along, all of the finance processes. And. Change the game especially where there's a lot of transactional, items in there, number. Three we, believe traditional, delivery centers, including some of the outsourcers, will actually reduce a, number in size because. Of the fact that a lot of the transactional. Activities, will either be eliminated, or automated, number. Four we, believe there's actually going to be fewer, traditionally. Trained accounts, needed the, skills that will be required will, be slightly, different and, will be a combination of both technical, and accounting. Related skills. Number. Five we. Believe we, have a bit of a dichotomy here that even though the finance function may reduce in size its. Importance, to the overall. Results. Of the company will be enhanced, finance. Function will be the key, custodian. Of commercial, data and therefore player role and many or all of the key business decisions. And. Number six. It's. All about data and how data, will become a competitive. Advantage for the future and we've, termed the phrase data, will become the new black gold so. Hope you enjoy this and, you'll. See our six, beautiful people out there giving six. Beautiful teams of people giving you that that, overview and. If. You would like any more information on, the back of this please feel free to reach out to me or any, of the team that you see in this group and we'd be happy to contact you so. Enjoy. You. Hello. I'm katie and, IBM. Services, finance, transformation, associated partner. By. 2025. Robotic. Automation and, finance will be the norm. Replacing. Most of the repetitive work in finance, as. Finance, technology moves. Towards, robotic. Automation and, artificial, intelligence, supported. By a blockchain framework. We. Expect, the trend of using robots, to replace manual. Intervention, in. Processing. Transactions. Closing. The books and, forecasting. Future, trends, and. Results. With. We see that as being. Continuing. And in, fact actually, increasing. We. Also see cognitive, automation, to, move beyond, transaction. Processing, in order. To cash and procure, to pay in. Report. To report for example you. Will see virtual. Agents, who, only, need manual, intervention, to deal with exceptions, to. Provide. Reporting. That, is on demand and automatic. A. Lot. Of this change is. Underway already, the, most immediate, impact is, being felt by, the. Offshored. Shared. Services, and outsourcing, where, we have seen job losses in a number of locations, the. Market analyst horses, for sources. Predicts. That there, will that robots, will be replacing. Between. 1.24, to 2.1 million jobs in the offshore sector, between, 2015, and 2020. One and, much. Of this technology is. Actually already in place and your. Own finance, function is likely. To be using. Automation. Technology, in areas, such as, payables. And receivables management. Forecasting. And. Reconciliations. However. Only a finance. Departments, are actually using, the full suite of technology. That is out there today. But there are a number of drivers such. As a change, in regulation. Driving. More value from ERP upgrades, or the. Increasing, pressure on cost that. Will encourage finance, departments. To, take a more holistic focus. To automation. My, name is Bob booth and, I lead our cognitive process, reengineering business. In Europe which is our consulting, business. My. Name is Kevin Gill I'm the practice leader for block training UK as well as the CTO. So. Kevin what is blockchain.
Blockchain. Is a new technology, which enables. Business, networks, to share information. The, term blockchain. Comes from block which, is a series, of. Information. In order much. Like your bank statement, and the chain is the ordering of that and that is quite important, for financial. Transactions, it's, also. Game-changing. In terms of transformation. Of what we can do with it. And. What are some of the key, features of blockchain. Kevin. Okay, so. Blockchains, been prevalent for about two years it. Owes its origins. To Bitcoin in terms of the technology, it provides but. What blockchain, enables, is consensus. Trust. And. Immutability. Across. A business, network, so, by, ordering. And writing, information in, a specific way, there, is an immutable record. Which is shared across, a business, network of players that enables. Trust and. What that enables, is game changing transformation. You can actually do things replicate. The distributed, ledger share, that across a business network and do transformation. Across, the boundary of the enterprise. Kevin. How are our customers. Beginning. Value, from larger ok that's, a good question, so over. The last two years it's been very focused in finance, sector so. Finance, sector relies, on digital, assets and finance. Sector is quite Business, Network centric, so. Things like reinsuring. An oil rate Rick providing. Trade finance, across, a portfolio, of players. Enabling. A record. Of who did what across. A complex, set of financial. Transactions. So, in finance, sector digital. Assets. Digital, transformation. Across business networks, what, beginning, to see is that moving out a finance, sector into, other sectors, like, distribution. In industrial, where it's being used extensively, for, provenance, and that's, just, not provenance. Of the digital, asset its, provenance, of the physical asset as well and things. Like your iPhone can recognize. Metals, they, can recognize the shape of part and that can be integrated into. The blockchain and we're seeing clients like Walmart, doing, farm to fork, provenance. Of where. Food has come from we're, seeing clients like mask we're, actually doing, game-changing. Propositions, around shipping, documentation. And how things are transported. Around, the globe how. Are our clients. Gaining. Value from blockchain. So. In finance, sector over. The last two years we, have seen a, prevalence. Of digital, transformations. Using blockchain, across, a business network and, what that means is you can do things beyond. The boundary of the organization. That you couldn't do before. For. Example, in. Insurance. For, big items, like oil rigs, refineries. Or big. Buildings. You, can reinsure. A portfolio. Of insurance. Across, a business, network and that's. Something that blockchain, distributed, ledger technology. Enables. The major players, to share the information and, to, actually have, that immutable. Record of who's done what win. Also. Across. Trade finance, there's, a lot, of buyer, supplier. Trade. Financier, trade, credit risk insurance that. Works being established like, we trade which, is being used for small and medium finance, there, are nine major banks, and they're, using blockchain. To, enable. The exchange, of information across. That business network. So. This all started in finance but now we're seeing it move into other industries. As well finance. Was very focused on the digital, asset what, we're seeing across. Industrial. And across. Distribution. Is the, digital twin where, you don't actually track, that the digital asset, you track the physical, asset as well use, something, like an iPhone to, actually, understand. Or recognize that. Item or use, something. Like barcode, to, actually track where and then that's all tracked across an immutable, record. Across the distributed, ledger. Now. What we have seen is, across. All industries. Joining. Up the business networks, for that provenance. Scenario. Is extremely. Popular so one, of the features, of blockchain, is provenance. So with Walmart. Farm-to-fork. What. We're actually able to do is to track the supply right back to where that the goods, were grown and we're seeing in other industries, like public, sector talking. To Defra and animal. Health about, how you would use the, same solution. Across, their industry. Moving. Into, things like farmer. We're seeing the same kind of provenance being used for drugs so, actually, truggy, tracking, the, manufacturing. Back, to the production of that, all, of the year production factory, of that, item so that you can actually resolve. Any issues in the event of a drug. Issue. So. We're really seeing. Blockchain.
Used In three ways I guess. The first is that it is becoming. An, enabler, for large-scale platforms, across industries, to, help to drive out. Cost. And also drive efficiency. We're. Seeing it as a, way, of reinventing some processes, or doing things differently we're. Also seeing it as a way of, driving. Out. Inefficiency. In certain processes, such as accounts payable. What. Do you think will will, be the next stage in the industry from blockchain, Kevin, it's, a good question and if I build on what you said about how we do blockchain. So there are several ways you can start with an organization, that as a recognize the need to establish a business network or do, some training, of blockchain, and we would start with a first project that builds, an MVP, that, gives them what they need get going, beyond. That they might bring on board other counterparties. And then they would start to scale and that. That's what. You were talking about Bob in terms of scaling. To a production, network so, what we're beginning to see is, organizations. Like we trade like GTD, with Maersk that, have established business, networks and they're growing and they're becoming real, so. We've moved from a little bit of trial and prototyping. To, real business networks now the next step is network, of networks because. We're beginning, to see either business, networks coming together or multiple, functions, moving, beyond, business networks for, instance in the car industry you, might control, automotive, but then beneath that you might drill down into individual, parts and use, blockchain to give more detail. Thank. You and so what we are seeing then is. Opportunities. To work with our clients to identify value. To, identify where. This, technology, can make, a real difference to their business either driving the top line or driving our cost and, that's. A good point so one, of the things we get asked a lot is what, should I be worried about where, where, will the threats come from what are the offensive, and defensive plays. That. Might happen in my industry and for, instance some, of our clients have recognized, that being good at blockchain, is a new channel and so. They'll build that as a capability, and for, instance insurers. Most. Business, networks that are established have. A trade credit risk insurance or an insurance link, to it so, if you're good at blockchain, as an insurer you, can enjoin them it's, a new channel you can actually look for new areas of business. Hi. I'm Damien noise from IBM Global. Business Services I'm a specialist. From the finance transformation. Team oh, I'm. Praveen dejar from IBM, global business services I'm, a client solution executive, working. Within the finance transformation, team by. 2025. We. Expect. To see the majority of transactional. Processes. To be automated, or even, eliminated, through, the use of technologies. Such as blockchain, cognitive. Nai yes. I think what we're witnessing ere is there is a shift in the delivery model from ones.
Which Was traditionally people process, centric, it's ones which have now become more business, services, centric. And. And in terms of the finance, delivery. Model, we. Would expect to see a continued, evolution whether, it be in an in sourcing or. Captive. Model. Or whether through an outsourcing, model, we. Would see a continued, evolution, of, the finance value chain yes. So now I think we're what, we're witnessing, alongside, that is this deeper. Integration. Between. Business. And technology solutions and architectures. Which, then allow. New service delivery models, which take account of things, like cloud based technologies, and. Allow us to deliver processes. As a service and finance processes a service in particular that. In itself, also then allows for new commercial, models to be developed. Which we the consumption, base the work driver based focus. Very much around business, value and and rewarded, against the achievements, of business outcomes, mm-hmm. And, we'd, also see the increase, in. Centers. Of excellence. Acting. Is. Innovation. Incubators. For new technologies. For. Both the development of technologies, but, also the ongoing implementation. That's. A good point tonight they become part of this why the ecosystem. Along, with processes, resources, technology, as applications. And. It becomes a critical skill for the CFO, to. Manage our ecosystem, in terms of, being. Receptive to the management, of disruption, which may come downstream, as well as ways in which they can add, why. The business enterprise value yeah. And we are young, we are continue to see the. Increasing. Popularity. Of analytical. Hubs. Whether. They be for finance whether they be for business subject, matter experts. And. Data scientists, working. Together on, a common cognitive. Platform, to, drive commercial. Business insight. And, you make sure a number of new roles and I feel. That's the challenge, for many, of the offshore, delivery locations, it's the ability to filter that, recruits. Develop. And retain these. New talents, and skills that are required to. Drive value through deeper, analytical, insights as. Well as value from the appropriate. Application of cognitive business, solutions, to. Add some real values to the finance function. Hi. I'm, J Gandhi from IBM, Global Services, I lead. Finers, transformation. Within, our distribution, sector. Specializing. In finance systems. There's. Been a seismic change in, the, market, for finance of finance systems and there. Will be fewer, traditionally, trained accountants. As. We go forward. New. Technology, has already replaced, finance, professionals, in tasks, such as data manipulation. And day-to-day, firefighting. Allowing. Them to spend more time on business, partnering. But. Now cognitive. Technology, such as Watson, is. Replacing. Specialists. In finance. Looking. To the future. Accountants. Will need to balance, technical. Accounting, and soft, skills to, give them greater commercial insight. People. Will come for more commercial backgrounds. And fewer from finance. This. Has real implications for. Finance trainees. Cognitive. Automation. Cloud. Blockchain. All, these new technologies, will, form core parts of syllabuses. And change. The roles of many junior accountants. Oh everybody, my, name is Noel Cullen, I'm an associate partner, in IBM business services finance transformation, team, so. By 2025, the majority, of people. Working within finance departments, will be Millennials, who've very different ways of working, and using technology, than, do their Generation, X counterparts. In finance departments. This. Is perhaps exhibited, a number of ways the, first is around the, use of, hardware. And technology itself, the majority of technology, at the moment in finance, departments, PCs, and laptops and we're, seeing a trend where apps. Are being increasingly used on mobile devices and, this is also being exacerbated and, increased, by. Location-independent. Technology, through the use of mobile devices particularly.
As Wireless. Technology, evolves, to. Include mass transit vehicles, the. Other area is the, that. Will change in the way that data is being stored so, currently data is largely sitting, in silos, on corporate erp systems sitting, in online, on-site. Servers by. 2025, the, blockchain and cloud will be mainstream, and. This will in greatly, increase mobility, allowing. Things like collaboration. And, always. Access, to financial, data. The. Third area that we kind, of seeing is is Generation. X and millennia, it's of a very different, view in terms of their the, way that they they actually embrace technology. Generation. X much, of technology has been foisted upon us and we've been reluctant, adopters. Of Technology, Millennials. On the other hand are. Far. More quick to embrace technological. Changes and, we'll expect, good quality finance departments, to be able to provide them with the same level of technological, capability. And experience. As they do at. Home and through social media all. These changes present, a number of key risks the. First one is probably about data security and cyber crime has been very much in the news recently, but. Also as well two regulators. Are getting increasingly, interested. In terms of data, and access and the way which we access financial, and commercially sensitive data and this is perhaps no, apartment, then through new regulations, such as GDP, are. You. Rupert Clegg from, IBM, services, finance. Transformation. Associate, partner the. Retained finance, function will have an enhanced, role going forward no longer will it be doing days and days of collating, historic, data it. Will now be looking forward, using, offshore analytics. Hubs structured. And unstructured data, to, provide rich real-time. Insights. Into the commercial, operation, of the business, Excel. Will be no longer its weapon of choice it. Will embrace cognitive, technologies, and tools and it'll, be the custodian, of commercial, data I'm, Rob Jackson upon, an IBM services finance transformation. Talk a bit about the journey. Which. Is actually one of the oldest. Tales in finance, transformation. So, why is it about to be true now having kind of historically, been something there's always coming, next, well actually the really, rapid, change of technologies, is driving, that and we can see a real fork in the road coming, whereby on, one hand you have finance functions, you haven't, been able to make the leap to trusted advisor and are being entirely replaced, by trusted.
Platforms. And automated, technologies, and, on the other part you have the finance functions, who did make that jump who have embraced technologies. Have used it to enhance their human insights of the business and have become the go-to place, for commercial. Decision makers, within the business to really get deeper than the number understand, the financial implications, and, start to influence the performance of the business and that I think it's going to be a really important, place to be as a finance professional. It's. A ripple what makes a great trusted, advisor within finance, finance. Has always been the go-to person to answer, difficult. Questions within, the business it's always had the analytic, skills to understand, the financial health of the business what. I see changing, with finance, these days is. That. Role is expanding, it's now not just the financial the, internals, the double-entry it's moving, into the commercial, insights within the business it's, taking, account the broader. Data, to. Give a full rich picture of what's happening commercially. To the business. How. Do you see the role of retained, finance, changing. Going for, smaller. But more impactful, I think essentially so we can see already, centers, of excellence for analytics. And, presentations. And that kind of stuff starting to spring up I think some of that goes into what's technically classed as business partnering right now and, we can see more and more the more transactional, back-office stuff is either going to be automated, use of robotic, process automation and. That kind of stuff so what. Becomes a retained finance, will be a smaller, group, of commercially. Savvy data-literate teams, and. What sort of new capabilities do, you think the retain finance, will need to have going forward so. Broader perspective, ability, to, take, a small, data sets or small this data set and extrapolate, out from that as well as the ability to take a large data set and pull out what's really important, for a business so analytical. Capabilities. And by that we don't just mean being really good at a pivot table it's actually understanding, the commercial implications of what they can see. Hi. My name is Angela priests I work, for IBM Global, Services in, the finance transformation. Area. So. Data as the black gold, what. Are we combining, commercial. Operational. Data, internal. And external data. And. We're setting up finance as custodians. Potentially. Of all of this data. Bringing. To the, unstructured, and external. And other sources of data the same sort of rigor that they. Brought to financial. And commercial, data internally. But. To get to grips with all of this we think that we need, to set. Up some, sort of a target operating model for, management of data. Thinking. About organizational. Structures. Potentially. That existing, org structures don't match don't, deliver what's required in. Terms of managing this data as a new asset. New. Skill sets data. Scientists. As well as accountants, and transaction. Processors. Formal. Governed. Processors. So. We're actually measuring. How. People are looking after that data how they're creating, it how they're managing, it and and, having it as part of their formal, performance management. And then. Underpinning, all of this and this is one of the reasons why you'd come to IBM, for this is the, IT structures. That makes that data available, to all whether, wherever, they need it in their roles whether it's customer facing, or internally. Generating. Business, cases and alike and, the. Reason you do this is because. Companies. And organizations. That base their decision-making on smarter, analytics, will.
Typically Outperform, their peers so this is a performance. Management challenge. Here's. Neil same here I'm the European lead for finance consulting, with an IBM, so. Angela. What. Do you think knows the tipping point, why. Is the tipping point being reached that makes, data, become, so, all. The competitive, advantage, now with it other companies so. I think the the. Challenge. Is just the sheer quantity, and. The need to use, new technology, to manage, that the quantity, of data and. Also. The. Challenges, we have with with, accuracy, and, finance, have a great. History. Of making, data accurate, and typically, it's been focused on currency and, results, but, actually that that modus, operandi, we can apply to all, this other data and, as, we use it we'll improve, it, so this is not a question of leaving it until it's perfect, because it never will be it's, actually using, it finding out where it's not. Perfect, and working, to improve it using, all of those processes that we used to use for currency. On, this, new sources. Of data I think you came up with a potentially, great point which is a lot of the times we hear people not then, other organizations. Using, excuses. Not to use data and a much more. Cognitive. And you know an artificial, intelligent, way is, about. Quality data quality it always uses that excuse what. Now is changed we're you know we can we, data, quality it has that become still, such an issue or, so. I think there's I think there's some interesting, trends. And particularly, social trends, that gives the customer, and the employee, and. The supplier, some. Degree of control over how. Their data is managed so often using. Using. Portals. And the like we're maintaining our own data so we have an interest in who supplies us having the most accurate picture but, we also have the means to make sure that that's the case so everything, from you, know the GDP. Our regulations. And and a need customers. Companies. Needing, to ask permission to have that data available. To, them gives, us back control as consumers. And as and. Our suppliers over, that data and how it's used and I think that, dividing. Up that data quality, issue into, lots and lots of small chunks that are very personal, actually. Is very powerful. Because. As an organization. Supplying. Different. Products. To to, my customer base I don't have to take control over how accurate, that data is because, I can give that task, to, to. My customers, just some degree, makes. A call that makes it sound so.
Big. Brother-ish. Loading. Me. Offloading. The responsibility. But actually that the the means through social mechanisms, to maintain your own data I think is truly it's truly powerful and. And. I think so I think there's, that tipping point that. The. People are used to. Maintaining. Their own standing, data within, within an app and within within. Their own social mechanisms, and they're more, happy to do that on behalf of their. Company than, perhaps they used to I think I've what I've seen as well as a the. Tools we've gotten use has actually helped. Companies. Be able to analyze the quality of data we much better and you ingest, a large, portion, of data the, tools often themselves. Come, up with a quality, index in terms of this is you know it meets the, requirement, for what you need by sixty eight percent seventy eight percent and this thing know is. Is is something, you can automate and cleans the same time as using and I think yes. Well. That, was the list, of short six videos I hope you enjoyed them and. You enjoyed hearing from all our beautiful people and within IBM so. Please. Do contact us, if you would like any more information as, I say my name is Neil sign please feel free to reach out me through LinkedIn or any other way. To. Get hold and find out more but. Please do download the, white paper itself, finance, 2025. Digitized. In their disrupted. Thanks. And goodbye. You.