Intelligent Finance Boosts Business Performance

Marleen Verhaag

While for many years companies’ finance departments have focused on reporting and analyzing past business performance, finance is increasingly becoming a forward-looking business function that needs to provide insights on choices companies face in a volatile market. Choices may be around mergers & acquisitions, identifying the impact of business model changes, or working with an ecosystem in defining new offerings.

A successful CFO collaborates across business functions and fulfills a vital role as a business strategy partner and chief investment and risk officer, next to fulfilling the traditional finance role. Pioneering finance organizations around the world are moving boldly to transform themselves and to turn the digital revolution to their advantage.

So, if digital is about responding fast to volatility in the market and surviving in the complex and fast-moving digital economy, finance organizations need to become more agile, and the cycle time of finance processes requires dramatic change. As business and data analytics have become widely adopted and technology enables real real-time information processing, the next wave of business automation is here: the intelligent enterprise. The intelligent enterprise enables organizations to sense, process, think, and act in one go. And this responsive capability is not confined to customer experience, enterprise assets, or logistics, but also applies to finance.

What does intelligent finance mean? It means:

  • …that new technologies enable radically automated and self-optimizing processes. This “lights out-finance” can entail cost savings of 40% or more for mundane processes like payment matching. As an example, BASF increased payment- and invoice-matching process efficiency from 40% to 94% using machine learning.
  • …that new technologies offer simplified data structures that enable simpler and faster close, planning, and analysis. Companies like Swiss Re reduced their financial close from 55 to 5 days. And there are many examples, SAP itself included, of companies that have achieved significant value from modernizing finance technology.
  • …that companies will have to deal as efficiently as possible with ever-increasing regulations on IFRS, tax, and compliance reporting and increased transfer-pricing scrutiny.
  • …real-time management of currency and country risk, which allows for optimization of exposures and hedging. New treasury systems provide proactive management of cash flows and accurate liquidity forecasts.
  • …that both finance professionals and people from the business should have information at their fingertips and can respond quickly to insights. A consumer-grade user interface and reports, as well as mobile access, are key to providing and consuming relevant information.

It goes without saying that technology is a big enabler of this paradigm shift in finance. Accenture analysis shows that already by 2020, finance staff productivity will increase by two to three times, and cost will decline by 40%.

Broad application of technology allows for an inverting of the “effort pyramid” in the finance organization, eliminating confusion, delays, and inefficiencies across all areas and allowing for proactive management.

As basic tasks are eliminated, effort is focused on optimizing business performance and strategic financial management of the organization.

Intelligent technology has created a new reality for companies. By embedding intelligence in finance applications and processes enterprise-wide, finance leaders can leverage improved levels of insight, prediction, and efficiency to drive growth and inform strategic initiatives throughout the business.

Learn more here.

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Marleen Verhaag

About Marleen Verhaag

Marleen Verhaag is a business development expert and management consultant with over 20 years of experience in developing IT strategies and selling and advising on software and technology solutions for international financial services companies. Marleen has a significant track record in strategic, transformational deals, working at the board level and in business partner relationships. Marleen is also the global head of SAP’s Business Women’s Network, an employee-driven network at SAP with over 10,000 members and 60 chapters around the world. The network offers women at SAP the opportunity to share professional insights and best practices, and help one another develop skills, advance their careers to drive SAP’s success.