Insights series The finance professional in 2020

Contents

Foreword Introduction Executive summary Key drivers Key features and trends Conclusions and final thoughts Acknowledgements and bibliography

2 3 4 6 9 16 18

About ACCA ACCA (the Association of Chartered Certified Accountants) is the largest and fastest-growing international accountancy body with 260,000 students and 110,000 members in 170 countries. We aim to offer the first choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. ACCA works to achieve and promote the highest professional, ethical and governance standards and advance the public interest. www.accaglobal.com

Welcome to our Insights series. We recognise the importance you place on having an opportunity to explore, reflect and plan for managing the impacts of current and anticipated challenges and opportunities.
Our Insights series of reports are intended to provide you with that space and an insight on the key issues for the profession and employers and how they are responding to them. Very often our reports will involve a survey of the profession plus a review of existing research, so as to ensure you are getting a balanced and comprehensive picture. Our intention is that the series should reflect your challenges and your issues. So, we would be pleased to hear from you, either specifically in response to this report or indeed, on any other key issues of interest. Happy reading and reflecting! Best wishes

Stephen Heathcote Director of Learning and Development

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Introduction

The finance professional in 2020 is a thought leadership piece around the future landscape for the finance professional. The research identifies the drivers and future trends which are likely to shape the profession, the individuals within it and their employers.
The research is relevant to the profession in that it will support the change process required to respond to the trends identified. The objectives of this thought piece are to: Identify key global trends that will shape the finance profession Understand the skills and knowledge likely to be required of the finance professional of the future Identify likely career structures of the future Stimulate debate around trends and responses. In order to obtain a comprehensive understanding of the trends and issues the research was conducted through: Qualitative telephone interviews with 20 professionals from a range of sectors and roles (see profiles below) A review of existing literature, including existing global surveys from ACCA and other sources, academic papers, thought leadership papers and other reference material Excerpts from a recent ACCA survey on Talent Management (Oct 2006), 2004 Skills Survey and the 25,000 respondent consultation on the ACCA 2007 Professional Qualification. A qualitative approach was used to ensure depth of insight, encouraging participants to explore the issues in detail and offer personal insights and examples. Great care was taken in the selection of participants to secure a breadth of coverage and appropriate mix of profiles. Panel Profiles CFO, global bank Chief executive, global finance training provider Chief executive, professional services, not for profit CPD national manager, global finance training company Director of education and training, not for profit Finance manager, private healthcare Finance manager, public sector Former head of finance training, global energy company Head of global finance training, global energy company Head of organisational learning, global bank Independent finance researcher Professor of accounting Project manager, financial services Senior executive, finance planning, global energy company Senior finance consultant Senior finance manager, global bank Senior independent finance HR specialist Small-business finance expert Talent manager, global finance, global energy company Training and development partner, accountancy firm

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Executive summary

The finance professional in 2020 will be faced with a number of challenges and opportunities shaped by the forces of enhanced globalisation, changing demographics and significantly increased business complexity.
The BRIC countries (Brazil, Russia, India and China) are expected to have established themselves as significant economic powers and this will shift the balance of economic power, particularly as those economies move from competing on cost to competing on the basis of knowledge and innovation. There was a general consensus that the convergence of fast-changing technologies, fragmented consumer tastes, ever longer supply chain and multiple dimension supply chain relationships will create an environment which is a more complex place to do business, with increased risk. As one of the participants put it Complexity breeds risk, risk breeds regulation, which in turn requires further investment in compliance. It is feared that such an environment could see the death of professional judgement, to be replaced by rules-based regimes. However, it is forecast that this generally higher and more pervasive risk will drive innovative mitigating measures, which will in turn bring more simplicity. Key Trends to Watch Global harmonisation of regulation There was widespread optimism that International Financial Reporting Standards (IFRS) would be adopted across the major economies but there was significant scepticism as to whether they would be implemented and followed. Nonetheless, the general view was that successful implementation of IFRS would lead to initiatives to harmonise compliance, regulation and auditing standards. Specialist niche roles will initially be highly prized and valued but over time such roles could lose their allure as they become commoditised and probably automated. However, there will still be value attached to the generalists, based on their understanding of a broad range of issues. As complexity will be a key feature of this environment, so will the demand for the professional who can provide a strategic overview, decision making and direction. That person will be Polarisation will develop across two dimensions, namely: The generalist v the specialist and, The value add professional v the transaction technician. The polarisation and fragmentation of finance roles It is expected that over the next 15 years, finance roles will further polarise and fragment. Much broader financial reporting Financial reporting is expected to remain at the heart of the profession (81% of ACCA members see financial reporting as one of the four most important competences). Demands from ever more savvy and diverse investors, demand for greater transparency and free access to information plus the rise of intangible assets, are expected to drive organisations into reporting on broader measures. These could include sustainability, risk, corporate governance and human capital. This will require finance professionals to develop new and innovative means of measurement and reporting, together with the requisite skills and methodologies.

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Executive summary

capable of exercising fine professional judgement, particularly in dealing with the risks (defined as opportunity and danger) present. This polarisation will be driven by the needs of organisations to manage complexity, reduce cost and utilise their finance professionals in areas where they can add most value. Roles such as those below may begin to evolve: the Navigator (a generalist who helps the organisation steer through complexity) the Centurion (a risk specialist who pervades all parts of the organisation) the Entrepreneur (a leader who seeks opportunities and maximises value) the Technical specialist (a professional with a highly discrete specialism) the T-shaped professional (a professional with broad generalist technical and business knowledge, complemented by a deep specialism) the Technician (a non-professional with a processdriven role). The growth and development of talent management programmes Adverse demographics in developed countries will create a scarcity of talented finance professionals, thereby driving up their value, but this could be addressed through the employment of finance professionals in the BRIC countries, for example, through immigration or offshoring. However, the survey did demonstrate that employers still have some work to do in ensuring they have the human capital required for business success. 59% saw talent management as being a means of recruiting, developing and retaining people in an organisation who have high potential; 76% recognised it was very important; 63% appreciated the negative impact that would arise by not having a talent management strategy but 41% had no strategy and no plans to implement one.

The skills and attributes needed for the new environment The anticipated development of roles and of the finance function will drive the skills, knowledge and attributes required by the finance professional. Areas already being promoted, developed and offered by ACCA (the ACCA Professional Qualification, continuing professional development (CPD), Career Pathways), feature quite strongly. The ability to exercise professional judgement based on a foundation of ethics, broad but deep technical excellence plus strategic awareness and communication will be key. 2020 could also see the advent of the T-shaped professional, that is, an individual with broad generalist finance knowledge and strategy skills complemented with a deep technical specialism in, for example, risk or financial reporting. It is anticipated that finance professionals will develop a portfolio of roles throughout their career, most of which will reach across multiple parts of the organisation. Additionally, the ability to manage in an uncertain and complex, ambiguous environment, idea sharing and an ability to learn through experience, will be the most sought-after attributes. The evolution of the finance function The finance function is expected to develop into a more central role, providing strategic and risk management advice to all parts of the organisation, from operations to marketing. It will continue its evolution from a function focused on transactions into decision-making support and finally, will adopt the leadership role of the organisation. It will focus highly on knowledge and use this as a means of identifying and creating value throughout the organisation. Its extensive knowledge of the organisation will further support this.

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Key drivers: globalisation, demography, complexity and risk

Respondents generally agree on the emergence of the BRIC countries (Brazil, Russia, India and China) as having a major impact on future global growth. That growth is not expected to occur in a straight line as those economies will pass through the same development cycle as have the developed economies. Problems for economic development are likely to be exacerbated by migration of talent. To take advantage of this trend it is expected that China and India will initially compete for business as educational hubs for the profession, acting as major suppliers of the worlds finance professionals.
We can, however, expect the locus of financial power to shift, providing greater balance, as business activity and income levels increase (for example, in China by 2020 the estimated number of Chinese households achieving European-level incomes will be 100 million1). In time we may also see emerging economies moving beyond their role as educational hubs and providers of low cost shared service centres (SSCs). We may expect these economies to challenge for a share of While emergence of the BRIC countries will mean increased markets and opportunities for business and the profession, this growth will take place within the context of a shortage of natural resources. Additionally, cultural differences may lead some economies to challenge the dominant Western approach to business, ethics and accounting. If we consider the two big players, which will take better advantage of this growth potential, India or China?
Regulatory harmonisation Regulation compliance scrutiny Globalisation Complexity Skills for the future Evolution of the finance function Demography Role polarisation

more complex transactional and non-transactional services enabled through development in services and technology.

China will, in the short term, need to establish better governance and
Broad FR

address issues around intellectual property and quality. Will Indias English language advantage and more internationally understood legal system prove the deciding factors?

Talent management

1 Ten trends to watch in 2006, McKinsey

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Key drivers: globalisation, demography, complexity and risk

The developed economies are now experiencing adverse demographics in the form of falling birth rates and ageing populations. Will this lead to a shortage in qualified finance professionals and how will this impact the world economy, the profession and individuals prospects? The most commonly held view, which we would concur with, is that there is unlikely to be a long-term shortage of professionals. Falling populations in developed countries are likely to be balanced by increased geographic mobility, particularly from emerging economies, and an overall reduction in the required qualified headcount driven by role polarisation, offshoring and technological innovation. In the mid-to long-term, market forces

A recent CIPD survey found that 15% of UK organisations are targeting migrant workers from the EU. Financial Services company Standard Life has scrapped its retirement age from October 2006 ahead of UK age discrimination regulations. Employees will be able to choose when they stop work.

Europe and the US, attracted by salaries unachievable at home. In turn, emerging economies may focus on strategies to redress the imbalance by encouraging inward migration and deploying strategies to retain their best people. There is a wide consensus that the future environment will become increasingly complex. If the current concern regarding geopolitical and environmental issues proves founded there will, of course, be an inevitable impact on the business environment. And surely the future growth of transnational organisations and global trade is another strong argument for anticipating greater complexity and risk? Complexity drivers to emerge from the research include:

and increased educational opportunities are expected to balance supply and demand. Supply of adequate talent could also be assisted by more flexible employment practices, which support professionals in extending their career beyond traditional retirement age and encourage existing nonworking qualifieds, for example career breakers, to return to the profession. As a result, organisations will need to develop more innovative ways to recruit and retain people into the profession and to develop them within what is likely to be a more specialised finance environment. What will be the impact on those emerging economies? In the short term we may see a similar situation as has arisen with the migration of healthcare professionals to

The ever increasing pace of technological change Competition for customers leading to more diverse and fragmented services and products Longer and more inter-dependent supply chains Regulation New business models Access to, and competition for, emerging markets.

Complexity leads to less doing, more thinking.

Senior finance HR specialist

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Key drivers: globalisation, demography, complexity and risk

There seems to be a trend towards Government seeking to use the accountancy profession
Complexity drivers Simplicity drivers

as its agent, placing obligations to disclose information, report money laundering etc.
Senior independent finance consultant

A consequence of a more complex future is a growth in specialisation for finance professionals. This is explored below but here it is useful to point out that risk itself may become an even higher-profile specialism than at present, with a larger number of organisations colocating risk management activities which are presently dispersed across finance, HR, operations and strategy functions. A further consequence of increased complexity is an increased emphasis on governance. There will be a drive to deploy governance structures that prioritise and systematically assess risk. To enable these structures, professionals are likely to require a broader knowledge of the business and its environment. However, if increased regulation and complexity has led to increased specialisation, these individuals may become a scarce resource. If greater complexity occurs alongside increased regulation, we may see the talent pool shrink further as the focus for resource shifts to compliance, leaving less scope for strategic thinking. If complexity breeds risk and risk breeds greater compliance, a challenge to the profession, professional bodies and employers will be how to ensure that the compliance/strategy skills gap is managed.

An alternative, though minority, view to emerge from the research is that there will be no greater complexity than now. The response to complexity is often greater innovation, which makes the complex simple once more. Technological advances including intelligent systems are beginning to perform this function and are likely to be refined and adopted over the coming years. If implementation proves successful, intelligent systems are likely to have the same effect that improved risk management has had, that is, better management of risk and complexity. Lastly, as discussed below, greater role specialisation may result from the need to manage complexity and be seen as a means of mitigating risks that may arise from lack of competence or knowledge.

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Key features and trends

We found seven clear trends, each of which would impact the finance professionals, their employers and the profession generally. The common message is that the environment will drive significant changes in the way organisations view the roles of finance professionals, the skills and attributes they require and how risk is perceived. Consequently, ACCA remains committed to providing the frameworks, organisational development support, qualifications and learning opportunities to help the profession and its employers meet the future challenges and opportunities.
Regulation. Compliance. Scrutiny This decade has so far seen an unprecedented focus on and scrutiny of business and finance activities. The reasons are well rehearsed and the consequences in the form of increased regulation and greater emphasis on compliance work have had an enormous impact on the business landscape in which we operate. But is this focus a temporary aberration or a permanent feature of the landscape? Or are we at one extreme of the business cycle, which will revert once more to greater liberalisation and looser regulation? Opinion is divided as to whether regulation will continue to tighten or slacken off. If we accept that current regulation has been driven by recent accountancy scandals we must ask will there be more such scandals? If we assume yes, we may expect to see a further increase in regulation leading to a greater focus on compliance work. If a more rules-based approach becomes dominant it may be that applying the concept of true and fair becomes less important to the work of the finance professional. The diminution of professional discretion may mean some roles present less of an intellectual challenge, which may in turn, dissuade talented individuals from entering the profession. On the other hand some argue that there is no going back. But what would drive a backshift? If companies move to less regulated markets? If private equity continues to grow? Under either scenario the debate about the nature of regulation (rules or principles-based) is likely to continue. In a multifaceted complex environment the application of professional judgement has a vital role to play, as rules-based systems will be ill fitted to an uncertain and complex environment. Our view is that the current regulatory position is likely to remain, with neither a discernable increase or decrease. However, we can see professionals becoming even more adept at managing the regulatory maze and in time being able to delegate this activity to nonprofessionally qualified technicians.

There will be a retreat from the current regulatory framework which is too extreme and driving people out of capital markets into private equity.
Managing director, global financial training provider

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Key features and trends

Regulatory Harmonisation Our research indicates widespread optimism on the harmonisation of accounting standards. It is generally agreed that IFRS will be widely adopted by the major developing and developed economies, albeit with highly uncertain timescales. It is commonly felt that resistance is likely to continue from developed

81% of members consider financial reporting one of the four most important competences in their current role.

of Chinese industrial champions) and/or a consolidation of smaller firms, to challenge the Big 4 and bring more choice into the market. Financial Reporting Reporting will continue to be at the heart of the finance functions work. The nature of the reporting, however, is likely to

economies, which may well slow international implementation. In contrast, we may see the BRIC countries driving adoption of international standards and in turn bringing the developed countries with them. Market forces may also drive harmonisation. An example might be the merger of stock exchanges. However, in a contrasting view, some respondents operating in global business indicated a belief that implementation was already slowing down and that the need for harmonisation is increasingly being questioned. There is some caution being expressed about just how deep the adoption would run. While it was felt standards would be beneficial and generally adopted, it was also agreed they would not necessarily be applied consistently, particularly in economies with less transparent regulation. The consequences? We may see national regulators sharing information and converging, perhaps on a regional basis, and even extending their reach into territories not currently regulated.

continue to broaden. For external reporting, corporate social responsibility (CSR), corporate governance, environmental impact including carbon emissions, and human capital metrics are all likely to feature and will become the standard rather than the exception. Increased scrutiny, a drive towards transparency, freedom of information, free movement of information and better educated populations will extend the scope of reporting. Producing intelligible reporting from a greater number of sources with more complexity for multiple audiences will be a formidable task. The continued development of communication technologies and populations more inclined to take direct action in the form of, for example, product boycotts, will increase the need for transparency and simplicity in reporting, albeit on a more complex picture. We see that tomorrows global professional accountants will face an ever increasing set of competing values and complexity in the business environment. They will face increasing demands from investors to improve financial returns and measure and report on forwardlooking indicators. Given that financial markets survive and thrive on accurate and freely available information,

They will adopt IFRS but will they use it?

Professor of accounting Another potential consequence of greater regulation and convergence of standards is accounting industry consolidation. This may see the rise of global firms from China (developed to support the global ambitions

the integrity of those who prepare that information is paramount. The ability to exercise judgement based on ethics will be the one constant that will ensure finance professionals maintain that integrity and successfully circumnavigate complexity and ethical dilemmas. Indeed, our 2007 Professional Qualification, with an

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Key features and trends

all pervasive ethics approach and specific subject areas entitled The Professional Accountant and Accountant in Business, is aimed at preparing the next generation for this. Role Polarisation and Fragmentation We expect to see increasing polarisation and fragmentation of roles in the profession. This polarisation is likely to be evidenced along two dimensions: the value add professional v the transaction technician and the generalist v the specialist. Dimension 1 The value add professional v the transaction technician

87% of ACCA students consider integrity and professional ethics as first in the list of core skills for the future finance professional. In the same survey 67% viewed credibility of the profession as a long-term issue.
(Source: ACCA student aspirations survey, 2004)

leaving the finance function to manage the relationship and risk with the SSC and shift focus to other areas such as strategy, niche specialisms and organisational leadership. And what will be classified as transactional work by 2020? Respondents suggest that some work which is currently regarded as specialised will, by then, be supported by technologies and will require a lesser degree of human intervention. Indeed, we might expect to see a cycle in which specialist roles are initially highly prized, but over time become more mainstream, transactional and are valued less.

More specialisms, fewer daily transaction activities

Head of finance training, global oil company While this trend is firmly in evidence today, many participants indicated there was likely to be a broadening of both the tendency for separation of transactional work from higher-value work and additionally, an increase in what will be classified as transactional work. Availability of lower-cost qualified professionals through offshoring; the possible increased use of partqualifieds for transactional work; automation enabled by advances in accounting technology, including the deployment of Extensible Business Reporting Language (XBRL), are all strong drivers for this polarisation. Consequently there will be an increasing tendency for most transactional work to be undertaken by SSCs,

What will be the business impact of this commoditisation of finance activities? Presently SSCs in developing countries are focused on the transactional activity considered low margin by organisations in the developed economies. Will this migration of activity continue with high-value services? Many would suggest that with their strong and deep skills base, developing countries will acquire a greater share of more complex work and play a significant part in speeding up the pace by which such specialist work is commoditised. Dimension 2 The generalist v the specialist A key driver toward specialisation will be increased regulation and attendant complexity and compliance. Assuming regulation does increase, specialisation will also require greater focus on technical skills development. Professional bodies and businesses will be required to respond with development and delivery of technical learning options in a broader range of more specialised areas.

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Key features and trends

For the profession as a whole, well grounded technical financial knowledge and skills will remain highly relevant. For one group, those post-qualification skills will be increasingly focused into narrow specialisms. Unchecked, this may present a problem for leadership development and succession. If professionals are forced to specialise more intensively and earlier in their careers it may be difficult to provide the individual with the high-level view required for more strategic leadership. If this is the case, should we now be developing the rather paradoxical specialist role of the generalist, as great value may be placed on leadership and the ability to see the big picture? We can see the evolution of six major roles in this future environment: the Navigator (a generalist who helps the organisation steer through complexity) the Centurion (a risk specialist who pervades all parts of the organisation) the Entrepreneur (a leader who seeks opportunities and maximises value) the Technical specialist (a professional with a highly discrete specialism) the T-shaped professional (a professional with broad generalist technical and business knowledge, complemented by a deep specialism) the Technician (a non-professional with a process driven role) How might the trend to specialisation affect the audit profession? If we assume the same drivers to specialisation exist for auditing as for other finance activity, we may see audit reports becoming a collection of specialised reports from a variety of sources, perhaps even from outside the main auditors. There may well be a growth of auditing of internal reporting and the profession may focus on high-value activity like valuation and reporting on CSR, corporate governance and strategy. The result of this increased demand for more and broader auditing may mean the blurring of the distinctions between the finance function

and other functions of a business. Indeed, we may find the finance function, or at least some of its traditional activity, relocated and embedded into those other functions. It has also been suggested that the increased complexity of organisations may require a continuous auditing regime in which the auditors are situated in the business all year round. However, the risk of jeopardising objectivity and independence will have to be considered. An alternative suggestion was for would-be auditors to undergo two years work experience before embarking on their professional qualification to ensure they have acquired the sound business experience required in order to conduct their assignments effectively. The Availability of Talent Talent issues are likely to come to the fore as the profession continues to develop in response to the changing business environment. The areas most likely to occupy those involved in recruiting, retaining and developing talent are: drawing advantage from increased mobility; the opportunities and challenges of greater diversity; demand for flexible employment models; the need for new and the more specialised skills. It will be imperative for educators, professionals and employers alike, to work together in ensuring that the relevant guidance, support and resources are made available for the development of the next generation of finance professionals. Increased mobility of professionals offers significant opportunities for developed and developing countries alike. The research suggests a continued migration of more highly skilled knowledge-based workers to the developed countries. This move is likely to be supported by harmonisation of accountancy standards and accountancy education including, crucially, harmonisation of ethical standards. However, technology may act as a balance, with more work

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Key features and trends

virtual working may finally become a reality. This may, to some extent, mitigate the migration of professionals. Will interest in Talent Management increase in the future?
100

Also, we can expect to see professionals swapping between full time, part time, contract and permanent positions at different points in their career. Increasing specialisation could be a driver for this if these skills are only required for limited periods by businesses. We may see the growth of the individual and independent professional.

80 % of respondents

60

What are the skills required for the individual to

40

succeed? At the strategic level, communication and leadership will remain key. It is likely that succession planning will be increasingly important. With a highly mobile profession, and potential shortage of strategic thinkers, managing employee motivation is likely to be key to successful retention of the best people. For HR this scenario presents a number of challenges: recruiting from new markets, balancing cultural expectations, professional development and retaining talented individuals. And what skills will HR and the profession be looking for? Specialised technical knowledge will be a given, alongside which will sit flexibility, potential to think strategically and yet understand the limits of ones own knowledge but also be highly skilled in accessing and filtering relevant information a profile akin to the T-shaped professional role class. Finding the highest-potential candidates in a more distributed talent pool of more specialised individuals may require more sophisticated methods than are commonly employed at present. The credibility and appeal behind an employers brand will also play a key part in attracting young talent, who will seek alignment between the values of an employer and their personal values. Sustainable business reflecting the concerns of society may help to attract and retain people longer. They are also likely to seek intellectual challenge, flexibility and opportunity for career advancement.

20

0 Dont know Stay same Decrease Increase

Source: Talent Management in the Finance Profession: Global Survey Report 2006, ACCA 2006

itself being migrated to lower-cost economies, allowing those professionals to stay in their home countries. Nevertheless, the most talented individuals from developing countries are likely to benefit the most, with competition for high-potential candidates increasing ever more as the talent pool within the developed economies shrinks due to static or negative population growth. But will this talent stay? In the longer term will we see talent returning to its country of origin as economies mature and opportunities there grow? Our experience would indicate that once people have acquired sound experience, they will tend to return home, thereby providing those economies with a highly talented resource. The picture painted above is clearly one of increased diversity within the profession. We can also expect changes in the way people work. The promise of

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Key features and trends

Skills and Attributes for the Future Environment The finance professional, in 2020 will require a rigorous and broad technical foundation linked with work experience. They will require sound professional judgement and ethics, which will further differentiate the qualified from the unqualified and determine their capabilities and opportunities. While we expect to see greater role fragmentation, we also expect to see these role profiles sharing some of the same skills and attributes but with the difference coming in the focus of each role. Similarly, we would expect valued professionals to have held several roles throughout their careers. The illustration below seeks to outline the evolution of skills and attributes required for the future.

The Evolution of the Finance Function In the short to medium term the finance function is expected to complete its transformation from a transaction-processing focus to a fully fledged business partner with a high decision support capability. However, the finance function in 2020 may also have assumed a leadership role throughout the organisation, primarily due to the extent of its organisational knowledge and influence. In this role it will assume responsibility for strategy development and implementation as well as managing the risks that may impact the future success of the enterprise. Risk should increasingly be seen as both danger and opportunity. It ought to be viewed and managed across a wider range of areas to include people and intellectual property. In essence, the management of risk, in its interpretation as opportunity and danger, should become part of the strategic process. In the future we anticipate that finance professionals with

What we value now

Team player

What we need for the future

Team player, coach and mentor support and lead teams as appropriate, aid the experiential development of upcoming professionals. Broader range of skills plus the flexibility to reinvent oneself in a range of roles. More creativity, idea sharing and lateral thinking. A new range of role profiles built around a sound, general technical background but with a specific focus. The T-shaped professional, the navigator, the entrepreneur, the technical specialist and the centurion. Excellent execution (right first time) combined with a willingness to experiment and learn.

Good fit for role

Specialist skills

Right first time high accuracy, on time Process focus

Outcomes focus greater weighting placed on what organisational outcomes and output measures are required (as opposed to designing the process). Strategic. Customer intimacy closer internal and external relationships in order to understand and align mutual needs. Greater collaboration and challenge with all parts of the organisation and customers.

Operational

Customer delivery

Working in silos

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Key features and trends

their training, experience and broad organisational perspective will assume leadership of the organisation.

Finance could become the new strategy function

Financial controller, global financial services organisation Key areas such as Financial Reporting, Management Information, Treasury and Corporate Finance, are expected to remain and flourish. However, a less optimistic view (and one we dont subscribe to) is that of a finance profession more highly regulated and more narrow in scope than now, where much specialised work can be automated and a smaller pool of strategic thinkers oversee activities and plan the future. This narrow focus could make the profession less attractive to the graduate and consequently stunt the potential for innovation.

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Conclusions and final thoughts

Organisations need to consider the risks around ensuring that they have the right people, with the right skills, knowledge and expertise, in the right roles and within the right organisational structure.
Focusing, retaining and developing what drives and protects value is key. The finance function of the future will develop around: Leadership, strategy and change Risk and compliance Finance specialisms Managing outsourced functions. Organisations should link finance skills development to the roles that will drive value. Suggested role classes include: The Navigator The Entrepreneur The Centurion The Technical specialist The T-shaped professional The Technician In tomorrows fast-evolving, complex environment, finance functions should be the champions of change. Our perception of risk should change, so that it encompasses danger and opportunity and to recognise its increasing pervasiveness. Going forward, we would urge the profession, In a complex environment, the ability to exercise sound professional judgement will provide the flexibility and the skill of simplifying complex, multi-dimensional issues. The core attributes of professional judgement, technical excellence and ethics, should continue to be protected and promoted. At the heart of being a professional is the duty to uphold the public interest above ones own and to make accurate judgements based on acquired knowledge, skills, expertise and experience. This is organisations and finance professionals to consider how they might prepare for 2020. The following questions might be useful to help formulate some thoughts: To what extent would complexity impact my organisation and its customers and what would this mean for our finance function or clients? What are the value levers in my organisation (or that of my clients) and how do we ensure that finance professionals are focused on leveraging these? Do we outsource our other activities or move them to a shared environment? Todays professional accountant operates in an environment of time-and space-reducing technologies with an increased emphasis on ethics and corporate governance and demand for new, value adding services. With greater automation and processing, the role of a professional accountant has evolved into one focused on managing uncertainty, complexity and strategic decision-making within an overall context of heightened governance. The attributes possessed by professional accountants facilitate entrepreneurship, help managers create value, manage risk and help us rationalise complexity. This is the role of the 21stcentury professional. knowledge that is regularly updated and skills that are regularly refreshed and developed. For finance professionals, the independent exercise of judgement, based around ethical values and technical skills is the key to their current and future role. This will continue to be supported by our approach to professional work experience, which seeks to ensure that trainee accountants have exposure to and an opportunity to learn from real life dilemmas, while under supervision.

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Conclusions and final thoughts

What role would risk play? Do we need to consider risk at a more strategic and pervasive level? What capabilities might we need and which role types might we need? How can we mitigate the risks associated with a dearth of talent? And additionally: How do you see your role (and/or those you manage) evolving as we approach 2020? What steps would you need to take to make that transition? Do you consider that any of the role classes we suggest would be relevant to you (and/or those you manage)? And if so, what roles do you (and/or those you manage) need to develop towards? We welcome your thoughts and views on this subject. Please contact us by e-mailing dbp@accaglobal.com

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Acknowledgements and bibliography

ACCA wishes to extend its gratitude to all those individuals who responded to this survey.
Particular thanks is due to the expert panel, consisting of senior industry and academic figures, for giving their time so generously in support of this project. Bibliography ACCA 2007: Member Competences Survey ACCA, 2004 ACCA 2007: Student Aspirations Survey ACCA, 2004 Berry, Mike Standard Life Scraps Retirement Age Sept 2006 www.personneltoday.com/Articles/2006 Business Ethics Contribute Towards Shareholder Value ACCA, 2006 www.accaglobal.com/ethics Bris, Arturo Global Growing Pains April 2006 www.ft.com/cms Bruce, Robert CFO 2010: The Role of the Chief Financial Officer in 2010 IFAC, January 2002 www.ifac.org Cacciaguidi-Fahy, Currie and Fahy Financial Shared Service Centres: Opportunities and Challenges for the Profession ACCA, 2002 www.acca.co.uk/publications/research_reports Davis, Ian and Stephenson, Elizabeth Ten Trends to Watch in 2006 The McKinsey Quarterly (Web exclusive), January 2006 www.mckinseyquarterly.com Exploring the Evolving Role of the Finance Director London: Deloitte Touche Tohmatsu, May 2006 www.deloitte.com Likierman, Sir Andrew Seizing the Reins of Good Financial Management April 2006 www.ft.com Michaels, Ed; Handfield-Jones, Helen and Axelrod, Beth The War for Talent Boston: Harvard Business School Press, 2001 Leaders on Leadership: New Challenges Mean New Roles for Finance Professionals Citigroup, October 2004 http://jobfunctions.btnet.com Jopson, Barney China Set to Teach Others Financial Times, 1 September 2006 International Federation of Accountants Strategic Plan for the years 20062009 IFAC, October 2005 www.ifac.org Front-line: The Finance Function of the Future London: KPMG (UK), March 2006 Franks, Julian and Mayer, Colin The Right Conditions for Trust between Businesses June 2006 www.ft.com Falcao, Horacio An Open Channel of Communication April 2006 www.ft.com Financial Services: Hallmarks of Success London: Deloitte Touche Tohmatsu, June 2006 www.deloitte.com Finkelstein, Sydney Red Flags on the Horizon March 2006 www.ft.com

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Acknowledgements and bibliography

Observations on the Implementation of IFRS Ernst & Young, 2006 www.ey.com Perrin, Sarah Plotting a Strategic Comeback Accounting and Business, June 2006 Phillips, David Auditors: Lessons from the Future July 2006 www.accountancyage.com Policy Brief Conference Report 14 Financial Conglomerates: The Future of Finance Washington: The Brookings Institution, April 2003 www.brook.edu Servaes, Henri and Tufano, Peter Ranking risk and finance April 2006 www.ft.com Sukhraj, Penny E&Y Report Shows Difficulties in Applying IFRS September 2006 www.accountancyage.com Talent Management in the Finance Profession: Global Survey Report 2006 ACCA, 2006 The Future of the Accounting Profession: Auditor Concentration The 103 American Assembly: Columbia University, May 2005 www.americanassembly.org Towards Transparency: Progress on Global Sustainability Reporting 2004 ACCA, 2004 www.accaglobal.com Ward, Graham The Future of the Accountancy Profession IFAC, January 2006 www.ifac.org Young, David S Europes Transition to IFRS March 2006 www.ft.com

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