Technology is fundamentally changing the world of finance, and finance teams are excited about it. Those were the conclusions of a webinar that included experts and practitioners from SAP and Capgemini earlier this year.
We all know the digital economy is driving fundamental change in every industry. For finance, it’s creating increased market volatility that is resulting in greater supply chain, currency exchange, and commodity risks, as well as more complex regulatory requirements. At the same time it is generating a proliferation of new business models that are blurring industry lines.
Finance, of course, has to adapt to the demands placed on it by these forces. The good news is that the very technologies that are driving the changes can be used to help make the transition.
Inverting the effort pyramid
Thack Brown, general manager and global head, Line of Business Finance at SAP, assessed the impact of technology. “We’re entering an era of radical automation, where multiple technologies are inverting the effort pyramid, allowing finance to reduce the time it spends in the back office and spend much more time on strategy.”
The technology is also allowing finance to generate a single, enterprise-wide source of truth that can be analyzed in real time. “Now finance can provide every individual with access to financial information when they need it, as well as a platform that can be used to model new business scenarios and rapidly deploy new business models,” he said.
Justin Holland, director of Enterprise Applications at Capgemini, has seen some real breakthroughs in his dealings with customers. “Reporting and what-if analyses are really exciting them.”
For example, a reinsurance company is using an interactive map to drill down and assess the total number of insured and the exposure based on what-if analysis of scenarios – such as an earthquake in Manhattan. “The trick is to be imaginative in thinking how you can bring the data to life,” he remarked.
Another Capgemini customer – an oilfield services company – is assessing profitability in real time. By tracking costs at each of its drilling stages, the company was able to see that by increasing the maintenance cycle from monthly to bimonthly, it could reduce costs. “It’s been a game changer, improving margin by 12%,” explained Justin.
Creating transformation agents
For Gina McNamara, CFO at SAP Australia and New Zealand, a key part of taking finance to the next level is reskilling finance people. “We’ve done the systems and structural changes; now we need to focus on how we partner with the business to drive growth and profitability, and become transformation agents.”
Gina’s solution is an in-depth training program designed to future-proof the careers of her people. Interestingly, it’s based on how SAP trains its salespeople, and includes an overview of the company’s products. It also uses salespeople in the role-plays the finance people are undertaking. Essentially, the training involves analyzing customer case studies, identifying the root causes, coming up with solutions, and presenting them to a mock customer panel. “The course enables finance people to put themselves in the customers’ shoes and look at what can be done for them from a finance perspective,” she said. “Since we started this program, I have noticed that our finance people are much more empowered and have more empathy with the business.”
There is no doubt about it. New technologies are changing finance and how it interacts with the business. For those finance teams that embrace the continuing transformation – and the changes in skills and roles that are needed – these are indeed exciting times.
This is an extract from a Webinar entitled “Transforming Finance for the Digital Economy” held earlier this year. To listen to the complete broadcast, please click here.