For years, I’ve observed and assisted in the changing role of the public service finance leader. A tight focus on budget and cost management, transaction processing and compliance has evolved into a strategic driver of enterprise transformation using core financial management competencies. This blog is the first in a series that explores insights from Accenture’s global survey of nearly 200 senior government finance professionals.
People assume that the public sector lags behind the private sector in envisioning and adopting “the latest and greatest” in innovation. This is no surprise. The impact of spending labelled ‘wasteful’ is so much greater—and more visible—in the public sector. While the private sector has the luxury of experimenting, and does so to gain ground in dynamic markets, government is different. It is under a magnifying glass to be the proper steward of taxpayer dollars—to get things right the first time. Thus, the natural tendency to be more cautious and risk averse in uncharted territory.
This is why I was so struck by how willing public sector finance leaders are to take on transformational change and embrace innovation. One of the most compelling findings of the Accenture research was that public sector finance leaders are pursuing the same bold strategic goals as their private sector counterparts at the same rate—the gap between public and private here is shrinking fast.
Not only are government finance leaders playing a broader role in driving operational effectiveness, they are taking the lead on digitalization. Seven in 10 senior finance professionals say the CFO is the best person to drive organization-wide performance improvement from digitalization. About three in four think traditional finance talent profiles need to change quickly and dramatically to facilitate a technology-driven shift to a broader strategic role.
We are already seeing government organizations in the throes of finance-led transformation. A US state finance department is using analytics software to interrogate its data and identify performance gaps. It is also piloting robotic process automation technologies to automate routine processes and free up valuable staff time for more value-added work. A university finance department in the United Kingdom is combining data across the enterprise in unusual ways to improve performance as competition for students intensifies.
Public sector finance organizations like these will undoubtedly face tough challenges when taking the lead on digital innovation, employing cloud solutions, automation, data analytics and more to underpin strategic change. For one, securing investment dollars is always difficult. And government finance departments will have to compete with well-resourced private organizations to attract technologists and data scientists whose skills are at a premium today. We found leaders are recognizing those challenges but not being intimidated by them.
Overcoming these challenges will require public sector finance leaders to build a stronger business case for strategic change, focusing on the return on investment that transformation can deliver. And that return on investment isn’t always about just dollars and cents. For example, to what extent could automation free up resources enabling employees to move into more rewarding roles? And how could more sophisticated use of data enable finance to drive better performance across the whole organization?
Public sector finance leaders are at a turning point. The public sector has typically lagged behind the private sector in adopting “the new” by about four to seven years. I believe that gap is now closer to two to four years. In the digital world, there are countless opportunities to change finance and the delivery of public services. With 80 percent of survey respondents telling us it’s the most exciting time to be a government finance leader, it’s clear they are up for the challenge. Because when it comes to transformation, the glass is half full in public finance.
In future posts, I’ll explore more of what the survey reveals about today’s public service finance leaders—their ambitions, challenges and priorities. I encourage you to read the survey results in detail, and follow me on LinkedIn and Twitter if you aren’t already.