Utility Week

UTILITY WEEK | 21ST - 27TH JUNE 2019 | 17 Finance & Investment A water finance leader said: "It's a fine balance. It's about providing good customer service – but also challenging – and remem- bering they are a finance person." Has the CFO got the skills to be a data star? "Those parts of the organisation that get con- trol of good data and are able to provide the insights the business needs are the ones who are likely to get funding and be the stars of the show." So said Craddock, turning to the role of the finance team in data analytics. He maintained that there was not really a difference between "data analytics" and old-style-type accounts, but as participants pointed out, firms were increasingly bring- ing in data scientists at a senior level as businesses moved away from producing tra- ditional financial accounts. The demand is increasingly for predictive information. "The finance function is the natural guardian of data. But are you expanding your role to encompass chief data officer – do you see this as part of the finance team?" Craddock asked. Some participants were further along this journey than others but it was generally agreed that interpreting data is now a must- have skill. But in an era that has seen 90 per cent of all data generated in the past two years, it could be difficult for teams not to get drowned in "data lakes". Craddock advised CFOs to go back to basics and ask "what aspect of business performance are we look- ing to change?" and then focus on the data that can help drive that. Utility Week in association with Oracle has produced an exclusive CFO Insight report which reveals the pressures now facing chief financial officers across the UK utility sector, and the rapidly evolving nature of their roles. The report can be downloaded free here: https://bit.ly/2sXnY44 Workforce of the future No crystal-ball gazing discussion, even looking at the near future, is complete with- out assessing the impact of artificial intel- ligence and robotics. The view from our speakers was that robots would not replace human workers, but it was inevitable that certain tasks would become automated. The human workforce would also con- tinue to evolve along the trajectory that is already becoming a way of working in some sectors, if perhaps not yet utilities. Flatter structures, a more flexible contingent work- force with less linear careers and more port- folio working would become the norm. The advent of online learning meant that the workforce would be continually upskilling. Again, CFOs need to adapt to the way a younger generation want to work. The need to inject emergent skills around data ana- lytics, process management, and customer centricity means that the evolution of the finance officer is under way. "In order to be successful, companies and individuals will need to commit to life-long learning – but people are resistant to investing in acquir- ing these new skills," remarked one guest. So where is finance on the transition journey? One CFO summed up the mood when he said: "Slow. That's because we have to keep the wheels on the bus, so skills development takes longer." As another participant observed, it depends on where you're starting from and the legacy – with windows of opportunity opening as people retire. It's easier for those starting with a blank sheet of paper. What is needed to drive it is the stick – and that could come in the form of tougher price controls. Finance in the cloud and the role of IT The generation of more data and the need to harness it to improve business performance sits alongside a growing and flexible "digital eco system". A move to the cloud away from monolithic systems and enterprise resource planning (ERP), coupled with more automation, is also changing the way finance teams operate and their relation- ships with other departments. Traditionally, the use of on-premises ERP systems has been driven by IT – but the move to the cloud, and with it a process of continu- ous updates and service provider custom analytics, is cutting out the middle man. Nick Jackson, director, finance & performance innovation UKI ERPM, at Oracle, says: "We're much closer to the finance community than IT because of how we service. We have customer engagement managers who talk through whether they want upgrades or not." But while the cloud is fundamentally changing what IT does, it also raises the question of who decides on other tasks like mainte- nance and training, and whether IT departments should be more embedded within the finance function. One view that came through strongly was the need for skilled people within a finance function who could knit the constituents of a digital ecosystem together. And this, it was agreed, was a challenge. "A service integrator role is perhaps something that finance teams should think about," said Craddock. But what about smaller companies looking to transform their operation, where specialists like data scientists may be out of the question? "How do you access this digital transformation of finance functions, embrace data analytics and automation in a cost-efficient way?" asked the finance leader of a smaller supplier. However, the development of analytics by so£ware service pro- viders is likely to bring this into the realms of smaller companies. Said Oracle's Jackson: "It is so much easier to do things on a smaller scale as cloud and so£ware as a service." He said that in one company, Oracle has been brought in to help draw out and analyse data as part of the submission of a business plan to the regulator – a task that may traditionally occupy more than 50 people for over six weeks. The direction of travel was one where traditional finance teams were likely to shrink. "A chief executive of a FTSE-100 told me recently that it was their intention to not have a finance function," said George Markellos. His observation struck a chord with some of those gathered around the table. "We're certainly seeing some of the disruptor retail- ers with small and agile finance departments: where I have over 90 staff they have three," agreed one CFO. Brought to you in association with: "I see customer centricity as overarching business strategy, and how you bring that to life as a finance director is interesting."

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