Complexity is still a challenge for many finance organizations – complexity brought about by inefficient finance operations, conflicting stakeholder demands, multiple legacy systems, a growing volume of business transactions, and multifaceted risk factors. To compete successfully, businesses have to find ways to address this issue. The Aberdeen Group discusses this in its recent study on digital capabilities in financial operations for optimal efficiency.
To manage complexity and drive efficiency, CFOs and their teams must be agile and able to adapt rapidly to change. They need to deliver value by optimizing and standardizing processes – and thus simplify operations. Technology is playing an increasing role as finance organizations move toward towards “lights-out” processes that limit human involvement to exception handling and process oversight.
A critical prerequisite for automation is rationalizing and harmonizing end-to-end processes – for instance, source-to-pay, sell-to-cash, and record-to-report. Process owners are no longer focusing solely on the efficiency of individual back-end activities, but instead are considering how every process can truly support the business
A good example is the shared-services model, which has long delivered synergies and cross-enterprise savings. But as the model evolves, leaders are now focused not only on cost. More and more, they are looking for synergies across functions to reduce complexity and drive efficiency, regionally and globally. They are driving excellence through process ownership and stewardship within the business, which enables the finance team to move past operations and add more strategic value.
The role of technology
Technology is essential to this drive toward efficiency. Digitization on a single finance platform removes manual effort from intracompany reconciliation that results from disparate IT systems that function as silos.
In the context of end-to-end processes, technology allows companies to rethink whether an individual process can be redesigned or even jettisoned. For example, breakage between buyers and suppliers is being eliminated by extending the automation of processes beyond the enterprise to business partners through collaborative networks deployed in the cloud. As partners are being integrated into day-to-day business operations such as procurement, invoicing, and payment, are many traditional processes even needed?
Smart applications and intelligent automation will soon largely eliminate manual data processing. Robotic process automation will be able to intelligently address tasks that rely on business rules and can’t be eliminated by digitization.
Focus on operational excellence and strategic leadership
Radical end-to-end automation that drives efficiency can transform the role of finance experts. As finance processes become more event-driven and continuous, rather than sequenced and periodic, business partners and employees can engage in finance processes and provide data capture through self-services. This decreases errors and reduces manual effort. Shared-service centers turn into centers of excellence, with intervention required only for transaction exceptions, which are handled by true experts who advise stakeholders. Embedded process intelligence can enable process owners to perform real-time oversight to focus on optimization. This will free up finance experts to focus on more value-added activities.
In short, efficient, automated end-to-end processing is a major ally of the CFO and the finance team, and a key way to position finance as a strategic corporate partner in the ongoing quest for profitable growth.
To learn more about how finance organizations are using digital innovations to help improve efficiency, please read Digital Finance: Transforming Finance for the Digital Economy.