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 Great Recession a decade ago and the evolution of the digital era.
To find out, Accenture conducted a qualitative survey of 187 public sector finance leaders, exploring how they are helping their organizations 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 more generally.
Many finance leaders in the sector are laser focused on unlocking data, leading enterprise-wide digitalization and developing new finance talent. And they know they must make big changes in the process. It’s an exciting moment in government finance, with leaders primed for opportunities to deliver value in new ways—for their own operations, for the government agencies they advise and support, 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, finance leaders in government recognize the need for transformation just as keenly as their counterparts in business do. In fact, eight out of ten survey respondents think there has never been a more exciting time to be a senior finance leader. And, as they redefine the value they bring to their organizations, these leaders 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 organizations’ strategic goals. The good news is that despite budget constraints, many public sector finance organizations are making some inroads with advanced data tools. More than two-thirds (68 percent) are focusing on implementing real-time analysis of organization performance, and almost half have adopted a more predictive approach to reporting.
Specifically, in the United States, survey respondents have made the most progress with predictive analytics in the following areas:
To establish a stronger data analytics capability, public sector finance leaders must build on this momentum. The reality is that while public sector organizations 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.
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. Resources freed by automating routine processing and transactional finance tasks can instead focus on value-added work. Organizations get a strategic shift for less investment.
Public sector finance leaders recognize the promise of automation—and many have ambitious plans for it. 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 working across government recognize that tomorrow's finance talent is not today's. They know that building a future-focused finance organization that provides critical insight to decision makers starts with the right skills. 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 analyzing 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 organization 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—they can exert a whole new level of strategic influence. They can ensure that agencies are proper stewards of public funds while delivering value that transforms how people live and work every day.