Part 1 of the four-part series “CFO Intelligent Enterprise”
The relationship between businesses and their technology investments is reaching an entirely new normal. Increasing data volumes and processing power are setting the foundation for next-generation capabilities such as predictive analytics, forecasting models, and artificial intelligence (AI). Machines are learning how to sense and respond to events on our behalf, communicating with employees and customers in real time and predicting the next-best decisions.
Welcome to the rise of the intelligent enterprise.
But what’s perhaps the most interesting aspect of this new phase of digitalization is the executive at the center of it all: the CFO.
Advancing value by interlocking processes with real-time intelligence
The more businesses refashion their operations as an intelligent enterprise, the more they understand what people do well and poorly based on human judgment, reasoning, and choice. And at the center of this education is the finance organization.
Simplifying and automating processes, delivering insights at near-instantaneous speed, and answering traditionally impossible questions – all of these CFO agenda items are turning the function into a strategic partner throughout the business network. The dots are connected between technology and digital strategy to fundamentally shift everything from billing and payment collection to performance reporting and tax filing. More importantly, new ways are being established to adapt to change, manage volatility, and create differentiated value.
Take, for example, the finance department of Enel. The Italian energy giant is opening energy access to more people, creating new partnerships, and developing new and innovative ways for its customers to manage their energy consumption while becoming an entirely carbon-neutral company by 2050. But to deliver on this promise and stay competitive, Enel needed to improve operational efficiencies and get up-to-the-minute insights into the hands of decision-makers.
By adopting a next-generation ERP platform, the company created a single, global, and cloud-based foundation of centralized finance operations. It standardized business processes and consolidated data from 19 distributed ERP systems operating in more than 484 entities across 23 countries. As a result, Enel delivered the vastly improved data visibility needed to update business-wide reporting and accelerate financial closings from 16 to 5 working days.
Getting on the business on the path to intelligent everything
The first time I heard Enel’s story, I knew immediately that high-performing CFOs are heading on the right path. With a firm digital foundation, they are guiding intelligent decision-making and innovation while finding a business purpose that aims to create a better place for everyone to live.
But I also recognize that there are a variety of opportunities in the finance function that can bring CFOs to the bright spotlight in the intelligent enterprise. For example, they can take advantage of:
- Dynamic planning and analysis: For real-time evaluation and analysis of new business models and M&A through dynamic planning and forecasting with a single version of the truth.
- Soft or virtual close: To eliminate reconciliation and enable instant profit-and-loss insight and detailed reporting on the fly with one universal journal for a single source of truth and real-time consolidation.
- Predictive and simplified treasury: To simplify and automate bank processes with integrated liquidity planning, predictive and automated cash forecasting, and higher transparency on financial exposure.
- “Lights-out” finance: To support radical automation and self-learning processes across business networks to increase agility and reduce costs by 40% or more.
- Always-on compliance: To automate and embed compliance to protect the brand, focus on mitigating enterprise risk, allow instant prediction of potential fraud, and employ prevention strategies using data patterns.
As technology advancements shape the capabilities of the intelligent enterprise, finance’s role in optimizing business processes is no longer enough. The business should unleash its vision of an intelligent enterprise with the latest technologies and applications of data, automation, platforms, and human-to-machine interaction. For CFOs, this opportunity for creating an intelligent enterprise may be the ticket to steering business success for years to come.
Discover how your finance organization can help the entire business experience a new normal that fundamentally changes how the business runs. Download our white paper “Transform Finance with SAP.”