It’s no secret that growth matters for small and midsize businesses. But very rarely is a business able to accomplish and sustain this growth on its own. Whether the business’s product or service takes off overnight or slowly grows a loyal following over time, partnerships, acquisitions, and mergers have been a time-tested strategy for increasing revenues, boosting efficiencies, entering new markets, and strengthening the value of the business.
Recently, the Oxford Economics study “How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” sponsored by SAP, echoed the importance of this strategy. Of the surveyed business leaders running strategic, influential finance organizations in small and midsize businesses, 100% consider strategic growth initiatives – including mergers and acquisitions – as a core goal.
However, many companies are putting these growth opportunities in jeopardy by implementing technology without first creating an aligned and integrated digital strategy across the merged and acquired businesses. The individual business units may be sufficiently supported by technology in their own silos, but, all too often, a complex web of technology forms.
Clear the way for growth with the right tools
The key to a successful acquisition, merger, or partnership is taking advantage of the synergies and strengths of both parties. If the two businesses do not develop the power, authority, and technical and operational support of one company, the finance area cannot effectively govern and advise a path of maximized profitability, future-proof operations, and value-driven customer experiences.
The first step towards resolving this common situation is to bridge the insight gap between the two businesses. By centralizing processes on one platform, the newly formed finance area can consider how operations can run more efficiently while automating nonstrategic, repetitive tasks and reassigning work in a way that aligns with each team member’s strengths.
From expense reports approval and intercompany reconciliation to invoice-to-payment matching, many finance organizations have started to automate some manual tasks using machine learning technologies to improve efficiency. Assigning business rules to functions enabled by a shared services platform help organizations distribute and process repetitive tasks accordingly. But this is only the start of what automation can accomplish.
New technologies enabled by artificial intelligence, blockchain, and the Internet of Things can drive even more efficiencies. Now, internal financial systems can learn from past transactions to address the individual needs of the tasks. Meanwhile, the finance team can focus on more strategic aspects of the business and investigate never-before-seen exceptions more thoroughly.
It is also important to note that all these emerging technologies feed off the Big Data captured in the internal IT systems, with finance being the natural owner of that data. As data changes, so does the processing behavior. For this reason, it is critical to create a standard view of all financial and operational data on an intelligent ERP platform that users can access anytime and anywhere, and weigh potential scenarios against financial implications with real-time analytics, prediction, and simulation.
Why finance needs to keep current now to prepare for the future
As every finance leader knows, it’s always important to be prepared for any opportunity or risk that may come along. And this includes any mergers, acquisitions, or partnerships that may propel the business into a period of enormous growth.
For this reason, finance leaders must understand how the latest automation tools can help centralize data and business processes in a way that can make the business attractive to investors and ease the process of marrying two companies with fiduciary integrity, efficiency, and minimal risk. By automating time-consuming data-crunching and transaction processing, the finance organization can be restructured to provide more strategic value to new company.
In the end, neither machine nor humans alone will secure growth for small and midsize businesses. It’s the two working together to create new services and value that will.
Discover how finance leaders from small and midsize businesses are building a reputation for driving strategic growth. Read the Oxford Economics study “How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” sponsored by SAP. And don’t forget to check every Wednesday for new installments to our blog series “Finance Leadership Pays Off” to explore the possibilities for your finance leadership and your business.