Shrinking the gap between public and private
What does it mean to be a finance leader in the public sector today? It’s a compelling question considering how much has changed since fiscal policy was disrupted by the global financial crisis a decade ago and the evolution of the digital era.
To find out, Accenture conducted a qualitative survey of 187 public sector finance leaders—including those in the United Kingdom—exploring how they are helping their organisations overcome today’s complex and rapidly evolving challenges. We discovered something surprising. Although public sector finance leaders operate in an environment of budget constraints and intense public scrutiny, they are just as ambitious as their private sector peers when it comes to evolving their own roles—and that of the finance function and operating model more generally.
Many finance leaders in the sector are laser focused on unlocking data, leading enterprise-wide digitalisation and developing new finance talent. They are interested in creating an intelligent back office that empowers both back and front office employees to be more productive, do more engaging work, and create greater value. Doing this can improve productivity and performance, inform user-inspired solutions, and power more strategic decision making. Leaders know they must make big changes to reach this goal. It’s an exciting moment in government finance, with leaders primed for opportunities to deliver value in new ways—for their agencies and employees, and for the citizens and businesses they serve.
Strategy: All eyes on transformation
Forget the stereotypes of public sector finance leaders as being behind the times. While they face complex, sector-specific challenges—from budget pressures and user expectations to digitalisation—finance leaders in government recognise the need for transformation just as keenly as their counterparts in business do. In fact, eight out of ten survey respondents globally think there has never been a more exciting time to be a senior finance leader.
What’s more, half of UK public sector finance leaders believe their organisation is moving at the optimum pace to identify and target areas of new value across the organisation. Many believe that finance should take a leading role in driving digital transformation given their understanding of the economic model. As these finance leaders redefine the value they bring to their organisations, they are becoming increasingly strategic in their approach, focusing on a number of critical imperatives.
Data: Momentum is building
Public sector finance leaders are exploiting data to increase their enterprise-wide influence and support their organisations’ strategic ambitions. The good news is that despite budget constraints, many public sector finance organisations are making some inroads with data tools. More than two-thirds (68 percent) are focusing on implementing real-time analysis of organisation performance, and almost half have adopted a more predictive approach to reporting.
To establish a stronger data analytics capability, public sector finance leaders must build on this momentum. Public finance organisations can deliver breakthrough insights if they are digital by default, harnessing structured and unstructured data across internal and external ecosystems. The reality is that while these organisations are seeing an attractive business case for investment in transformation emerging, comparatively few are seeing returns exceed initial expectations. One reason for disappointment may be the challenge of measuring returns. In fact, 26 percent of public sector respondents have difficulty defining the return on investment from digital investments.
Specifically, in the United Kingdom, survey respondents have made the most progress with predictive analytics in the following areas:
Automation: From ambition to action
In addition to harnessing data to deliver new business insights, public sector finance leaders can transform the finance function with technology-enabled efficiency measures. Think automation and its potential to digitise key finance functions to deliver benefits to front line services. Resources freed by automating routine processing and transactional finance tasks can instead focus on value-added work. Organisations get a strategic shift for less investment.
Public sector finance leaders recognise the promise of automation—and many have ambitious plans for it. Those in the United Kingdom believe that 42 percent of finance tasks will be performed by technology in just three years. But the barriers to success can be difficult in this environment. In addition to concerns about information security, employee resistance to working with non-human “colleagues” is a critical one. Finance leaders must stay the course. Educating staff about how automation can provide more rewarding opportunities is an important place to start changing the conversation, and with it, changing hearts and minds.
Workforce: New skills on the horizon
Finance leaders in the United Kingdom believe that their most critical talents are asking the right questions about complex data sets, solving problems, and developing long-term strategies. They also acknowledge that tomorrow’s finance talent is not today’s—that there is a need to upskill finance to complement new technologies. They know that building a future-focused finance organisation that provides critical insight to decision makers starts with the right skills. It will be increasingly important to be bold here and move quickly, accelerating upskilling and restructuring ways of working to push the envelope on change. In fact, government is striving to secure non-traditional skills such as analytics capabilities and the ability to innovate. To do so, they must tap into existing expertise that their people have cultivated over time—such as analysing data-rich information for patterns that drive more accurate predictions—and recruit new talent with complementary skillsets to fill the gaps.
The survey shows that finance leaders are thinking hard about how to build the capabilities they need, often considering even more radical approaches than their counterparts in the business world are pursuing. They must think differently within the confines of government recruiting processes and standards. Exploring the use of contractors and freelancers, creating internship programs, upskilling, tapping into broader talent pools, and identifying and cultivating change makers within the organisation are all ways to do this.
Redefined: The public sector CFO
As public sector finance leaders lean into change—reimagining the function by harnessing new technologies that make for a more intelligent back office—they can exert a whole new level of strategic influence operating as one business unified by technology, culture and processes. Equally importantly, they can ensure that agencies are proper stewards of public funds while delivering value that transforms how people live and work every day.