Future of Finance:

Reshaping
finance
Building the service delivery
model of the future

kpmg.ca
Reshaping finance
Building the service delivery model of the future

I
n 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 to reduce manual effort and cost
“Increasingly, nimble
tax, treasury, audit, planning, and in transaction processing and
other high-value activities to help the bookkeeping. Indeed, according to a ‘bots’ can take care
business make better decisions. KPMG LLP (KPMG) study, about 70 of many execution,
But just as technology creates percent of finance organizations are
advantage, it can also take it away. That using RPA to reduce costs and improve workflow, and
is, while finance has made great strides process efficiency, while about half are archiving tasks,
in building its enterprise identity, it may using it to reduce headcount.1
ultimately need to relinquish some of However, as automation becomes leaving staff to
it. In the service delivery model of the more advanced, it will disrupt higher- focus on monitoring,
future, finance teams will be smaller, value services as well.
they will have less of a local presence, “Increasingly, nimble ‘bots’ can take
analyzing, and
and they will collaborate more with care of many execution, workflow, taking decisions
other functions in the journey toward and archiving tasks, leaving staff to
end-to-end process optimization. focus on monitoring, analyzing, and
on exceptions.”
taking decisions on exceptions,” says
Automation beyond Jolande Bot-Vos, program director, Jolande Bot-Vos
transactional efficiency MSc Management, at Imperial College Program director
Many finance organizations are using Business School. “At the same time, MSc Management
robotic process automation (RPA) new data and analytics tools will help Imperial College Business School

1
KPMG LLP, 1Q 2018 KPMG Global Insights Pulse Survey: Employing advanced technologies to transform finance (July 2018): https://advisory.kpmg.us/content/dam/advisory/en/pdfs/global-insights-pulse-1q18-report.PDF

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 1
Disruptive technology will significantly change the way finance delivers
transactional services, expert services, and business partnering.

1990s
Shared services
—— Internal delivery of core services;
predominantly regional models
—— Outsourcing/multiregional
outsourcing with select global
providers
—— Focus on transactional activities
Focusing on transactional services

2000s
Multisourcing
—— Emergence of right shoring; near-
shore becomes key element of
delivery models
—— Vendors deliver niche services
—— Introduction of multivendor deals
—— Emergence of center of excellence
(COE) solutions

Since 2010
Integrated service —— Integrated/multifunctional service
delivery models
delivery models —— Lower-value activities typically out-
sourced; increasing focus on analytical,
judgement, and expert services
Transforming the full stack

2020 & beyond

Digitally-enabled service
—— High availability of data
—— Digital technologies shift the service
delivery model landscape
delivery models —— Ability to deliver services virtually
—— “As a service” for front, back, and
middle office
—— Complex, value-add services that lever-
age technology

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 2
 Beyond
bookkeeping
“Historically, finance and
accounting would have
been very much about
recordkeeping,” says Samantha
Louis, vice president for
Strategic Engagement –
Management Accounting at
the Association of International
Certified Professional
Accountants. “We’ve seen that
over time the finance function
has been transformed so that a
lot of the transactional activities
have been separated from
the analytical, value-add, and
reporting parts of finance.”

With the assistance of finance better understand how the In the service delivery model of the
business performs and support fact- future, finance will use automation
intelligent automation, based decision-making, close to the to extract internal data from cross-
finance can deliver business and in real time.” functional systems and combine it with
For example, budgeting and external data related to competitors,
expert services more forecasting are important parts of economic factors, emerging
reliably and with business partnership, but these regulations, and more. Using this
processes today are often mere data with advanced analytics, finance
smaller workforces.
guesstimates based on past will deliver much more accurate and
performance, without consideration of continually refreshed forecasts in a
external macro and micro economic fraction of the time.
factors. Moreover, the budgeting With the assistance of intelligent
process often takes a long, political, automation, similarly, finance can
and circuitous journey, with finance deliver expert services more reliably
teams spending months iterating from and with smaller workforces. In audit,
local to regional to global—only to have for instance, technology will help
the budget pushed back down due to humans by quickly scouring robust
concerns about sandbagging. In the datasets for compliance issues. In tax,
end, the process is not just expensive— these systems will extract key data,
it is inherently flawed and static. apply rules, and assist in tax filings.

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 3
A new look for business backward-looking data and a plethora
partnering—with less concern of spreadsheets, these forecasts are
for geography
As a result of this automation, business
partnering in the future will take on
not efficient, accurate, or timely. In
the delivery model of the future, the
financial analyst, sitting in a virtual COE,
Designing an
a different shape. Finance will not
need to embed as many professionals
throughout various business units
will be supported by machine learning
to crunch through a variety of data
sources to create faster, more accurate
agile workforce
and geographies, because accessing
and analyzing data will no longer
require a local presence. Instead,
forecasts. The finance professional will
be able to spend less time producing
the forecast and more time helping
of humans and
delivery models will increasingly use
COEs, equipped with data scientists,
intelligent automation, and finance
business executives analyze and
interpret it.
“With the advent of new, distributed
technologies
experts. They will analyze internal and technology, where these roles
external data to help the business are performed will increasingly be The adoption of intelligent
answer key questions, such as how independent of the office environment automation will significantly
to deploy capital, where to expand, or and driven by the need for interaction reduce the amount of
which product lines to grow. These and teamwork with the business,” resources required for
COEs will be highly automated, using says Ms. Bot-Vos. transactional activities, in turn
artificial intelligence to free up human With technology-enabled COEs, reducing the need for a rigid
capital for more business analysis finance can scale expertise more organizational hierarchy.
and partnering. effectively. Whereas past models But finance will also need
Consider the forecasting activity in a might have required several dozen to ensure it has built the right
typical finance function. With limited, professionals per COE to be viable, competencies to deploy,
maintain, and govern new
technologies, from advanced
analytics to blockchain.
“Such a system will generate
new jobs,” says Dr. Andrea
Moro, director of the MSc
Finance programs at Cranfield
School of Management. “The
access to such a huge amount
of detailed data implies the need
for skilled analysts who can make
sense of those data.”
Moreover, given the pace
of disruption, new business
requirements will emerge very
quickly, so finance will need an
agile workforce. The organization
may need to borrow and partner
to access the right talent for
advanced technologies.

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 4
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.

Greater collaboration on
end-to-end processes
In its ongoing quest to establish
its position in the enterprise while centralized models, the organization Labor decisions will
providing the highest value, finance consolidated work to reduce costs
has historically vacillated between and increase efficiency and direct
become less about
decentralized and centralized models control. With shared services, finance location and more
for service delivery. In decentralized found a nice balance, delivering high about accessing
models, finance leadership ceded quality, responsiveness, and efficient
some control by distributing its transactions from low-cost locations— top talent.
professionals among various business all while creating clear ownership for
units and geographies, while in the finance organization.
Finance leaders have walked
the hard road to create this level
of enterprise identity and control,
but they may need to let some of
it go as organizations increasingly
move toward multifunctional service
delivery, or GBS. In this multifunctional
model—combining shared services,

47%
outsourcing, and internal operations—
leading organizations are breaking away
from functional silos to provide services
across end-to-end processes, such
as order-to-cash, record-to-report, or
of CEOs would like to see their procure-to-pay.
CFOs embed more finance skills in Indeed, all functional heads, from
the business through partnering.2 chief financial officers (CFOs) to chief

2
KPMG International, The view from the top (November 2015): https://advisory.kpmg.us/content/dam/advisory/en/pdfs/view-from-the-top.pdf

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 5
 Finance will need information officers, may feel a loss of Finance’s top goals for 2018–2019:
control as many of their people begin
to shift from trying
#1
reporting to the head of GBS versus Reduce costs and
to own all financial a functional chain of command. But a optimize the finance
multifunctional model is necessary in service delivery model
data and activities order to establish end-to-end business

#2
Invest in intelligent
to instead working process ownership, accountability,
automation to reduce labor
and optimization. Going beyond
with others to govern economies of scale, a GBS model
and drive efficiencies
them—as part of enables enterprises to improve

#3
Contribute to and enable
flexibility, simplify management and
a cross-functional governance, better manage risk, and
reducing costs across the
enterprise as a whole3
analytics model that incorporate more innovation such as
provides key insights RPA and digital technologies.
Accordingly, to retain relevance
to the business. in the future, finance simply cannot
optimize its function in isolation. To take Building a cross-functional
the greatest advantage of disruptive analytics model
technology, finance will need to break With technological advancements, end-
down traditional functional barriers and to-end processes will connect enterprise
collaborate with human resources, data that previously lived in functional
information technology, procurement, and siloes, and GBS is the way to scale
others to build an enterprise platform for insights across the enterprise.
service delivery. However, to get the most benefit from
the new connectivity and availability
of data, finance will need to shift from
trying to own all financial data and
activities to instead working with others
to govern them—as part of a cross-
functional analytics model that provides
key insights to the business.
As end-to-end processes become
highly automated and span multiple
functions, governance will become far
more than a “role.” Instead, governance
organizations of the future are likely to
include a global process leader who
is accountable for ensuring value,
improving operational efficiency, and
managing cost structure, while a
global executive sponsor—perhaps a
functional leader—sets overarching
policies and requirements.
How will finance leadership participate
in this governance organization? How
can finance reorganize its workforce
based on expertise in technical
finance, data and analytics, governance,
and transformation? These are the
key opportunities in the future of
service delivery.

3
KPMG LLP, 1Q 2018 KPMG Global Insights Pulse Survey: Employing advanced technologies to transform finance (July 2018): https://advisory.kpmg.us/content/dam/advisory/en/pdfs/global-insights-pulse-1q18-report.PDF

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 6
 91%
Designing processes with a a finance organization spends three
customer experience lens years implementing a new enterprise
Ultimately, building end-to-end delivery resource planning system, only to
models will be necessary but not get disrupted by new technology
sufficient. The most successful finance that fundamentally changes the way
organizations will also thoroughly customers, suppliers, and employees of CEOs believe they are personally
understand the journey of their expect to interact with the company? prepared to lead radical operating
customers—both internal and external— How will finance respond? model transformation.4
and apply design thinking and customer As another example, Amazon’s
journey mapping to create agile plan to distribute medical supplies is
processes. These processes will enrich disrupting not only other distributors
the customer experience and build but also manufacturers, which will
loyalty to the services “brand.” now need all-new processes—
Indeed, when customers can easily from order fulfillment to inventory
access services and get their needs management—for a different kind of
met—whether it’s through digital channel partner. Are they prepared?
technology, mobile apps, or even a Can these manufacturers tap into new
traditional phone call—they will comply technologies such as blockchain in
with processes not just because order to create more transparency in the
they’re told to but because they want supply chain and streamline processes?
to. Internally, the right process design To increase resiliency amid ongoing
can increase efficiency on processes disruption in a connected marketplace,
from booking travel to procuring vendor finance organizations will need to
services. For external customers, it can constantly anticipate the possible
drive revenue, reduce exceptions, and changes in their industry—not only
increase customer satisfaction. with current trading partners but also
with other players across the market. It
Building resiliency for will be critical to consider the possible
continued disruption impact, develop resilient processes, and
As business models and ecosystems design an agile delivery model.
continue to change, potentially This effort doesn’t mean boiling the
disrupting entire industries overnight, ocean; incremental steps will go a long
finance will need to engineer a service way toward demonstrating success,
delivery model that can quickly adapt mitigating risk, and establishing
to market shifts. For example, what if enterprise confidence.

As business models and ecosystems

continue to change, potentially disrupting
entire industries overnight, finance will
need to engineer a service delivery model
that can quickly adapt to market shifts.

4
KPMG LLP, 2018 U.S. CEO Outlook: Growing Pains: https://home.kpmg.com/content/dam/kpmg/us/pdf/2018/05/kpmg-ceo-outlook-2018.pdf

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 7
Preparing for
the future
Some organizations are already changing their service
delivery models to meet the challenges ahead. Consider
these examples from KPMG engagements:

—— A global biotechnology company —— A large consumer goods company Where are you on the road
needed to implement a new model wanted to expand globally through to the future?
for delivering back-office finance acquisitions, so it could capitalize Use the following questions to gauge
and human resources support—all on economies of scale and reduce your finance organization’s progress
while acquiring an organization that costs across the business. To toward a new service delivery model:
was in the midst of being spun off fully integrate and optimize back-
into a separate entity. The company office operations, KPMG designed —— H ave you evaluated your ability to
engaged KPMG to help manage and implemented the strategy keep pace with market disruptions?
this unique opportunity, which for a new service delivery model —— Do you understand your current
included consolidating organizations, that would integrate finance capabilities in technology, talent, and
integrating and standardizing systems, operations and migrate processes developing a portfolio of services?
and optimizing processes. The result to regional and global service —— Is your delivery model flexible
was a well-defined, well-governed centers. With this new foundation, enough to adapt to tax reform,
delivery model for GBS, supporting the finance organization quickly changing immigration policy, trade
thousands of employees in dozens of improved the efficiency of its treaties, and other regulatory shifts
countries while significantly reducing workflow, optimized internal that are changing the value equation?
costs. The company was also able to controls, and ultimately emerged —— Have you defined your company’s
handle a significantly higher volume as a valuable business partner future state for digitally-enabled
of support and anticipate and address that enabled the company’s business services, as well as a clear
future technology issues. acquisition strategy. path to close gaps in capability?

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Future of Finance: Reshaping finance 8
 How KPMG KPMG’s Financial Management
practice supports the growing

can help
agenda and increased responsibilities
of the CFO. Together with our Shared
Services and Outsourcing Advisory
practice—which helps clients transform
their business services to deliver
improved value, increased agility, and
sustainable business performance—
we can help your organization
address the considerations presented
throughout this publication.
Our approach, methodologies, and
tools are time-tested across various
industries and have consistently
demonstrated enhanced strategic value
to the finance function. KPMG’s global
network helps clients align their finance
organizations with the strategies and
needs of their businesses to realize and
sustain value over the long term.

About KPMG KPMG LLP, the audit, tax, and advisory

firm, is the U.S. member firm of KPMG
International Cooperative (“KPMG
International”). KPMG is a global network
of professional services firms providing
audit, tax, and advisory services. We
operate in 154 countries and territories
and have 200,000 people working in
member firms around the world.

© 2019 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Contact us
Calgary
Narmin Vasanji Kathy Penner
Partner Partner
Finance Transformation IT Advisory
403-691-8125 403-648-7176
[email protected] [email protected]

Montreal
Christian Lecours
Partner
Finance Transformation
514-840-2367
[email protected]

Toronto
Chris Moore Chris Hough
Partner, National Lead, Partner
Finance Transformation Finance Transformation
416-777-3043 416-777-8420
[email protected] [email protected]

Vancouver
Kelly Makway
Partner
Finance Transformation
604-691-3265
[email protected]

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