As vaccines become available, organisations expect an economic rebound while continuing their digital transformation journeys such as those in the finance function. How’d the finance function’s journey be different after the pandemic? How should CFOs go about digital transformation?
Ee Khoon Oon (pictured), Vice President, Asia Pacific, Kyriba shares with FutureCFO audiences how CFOs and the finance function could effectively navigate digital transformation post-pandemic.
FutureCFO: What’d be the challenges facing the finance function and the CFO post-pandemic?
Ee Khoon Oon (EKO): During the COVID crisis, companies sought to increase their visibility on their cash flow and produce real-time cash flow forecasting scenarios so that they could make the decisions necessary for the survival of the company, and this, while everything everyone was working from home.
We saw an increase in demand for SaaS from CFOs, treasurers who needed to be able to connect remotely to outsourced and managed services. However, switching to SaaS does not solve all the problems.
We have also seen a growing demand for automation and additional features to increase productivity.
Visibility of cash flow, forecasting, fraud, risk management (FX, third party) and real time are the most requested. Companies are looking to move from a manual spreadsheet to an automated cash and treasury management solution to better manage volatility.
These developments are taking place in a background of long-term changes, which are currently shaking up the world of corporate finance. Liquidity is and remains a fragile commodity, exposed to market disruptions.
CFOs must always be prepared to cope with cash flow disruptions that will stem from them through more active cash management and devote more time, energy and resources to activate all possible sources of cash — such as available core funding, banknotes, cash and bond issues, mobilisation of book debts, acceleration of book debts, active management of assets, and off-balance sheet monetisation etc.
In addition, as bank regulation is becoming increasingly complex and impact the access to liquidity, corporates must implement new technological solutions to face them. Among them, artificial intelligence (AI) allows to keep a permanent watch while staying up to date on the latest developments in fraud and regulation.
Finally, a global connectivity framework is also essential to optimize flows. For this, the key word is network. According to Kyriba Pulse Survey led in 2020, for 93% of CIOs and IT vice presidents, bank connectivity is one of the more complex aspects of an enterprise resource planning (ERP) project.
FutureCFO: How should finance prepare for digital transformation post-pandemic if it didn’t kickstart any before the pandemic?
EKO: Getting more visibility on cash, security and connectivity to numerous ERPs and banks should remain CFOs' priorities, together with fraud mitigation tools and sanction-screening solution.
In terms of technologies, SaaS is key for its unlimited scalability, rapid deployment and outsourcing capabilities. However, having a cloud-based treasury management solution is never enough.
APIs are other game changers because they support rapid and rich exchanges between different systems.
Finally, CFOs should make sure that treasury is equipped with a platform that can provide bank connectivity services and has integrated data management principles in order to protect their cash and feed forecasts with the data produced.
They should take a solution that ensures that has a high level of security and fraud protection, for example a system where abnormal payment activities are detected.
Getting more visibility on cash, security and connectivity to numerous ERPs and banks should remain CFOs' priorities, together with fraud mitigation tools and sanction-screening solution.
FutureCFO: In the case of finance functions that’ve already kickstarted digital transformation, how should they deal with digital transformation post-pandemic? How should they continue to maximise benefits?
EKO: Moving cash management solution to a liquidity control provider is a game changer. Every corporate should have the ability to gain real-time visibility and better manage cash flow positioning.
To achieve this, the “ultimate treasury management solution" is the one that allows treasurers to gain visibility, increase security, move and grow cash, all in a SaaS platform.
It delivers complete cash visibility for better and faster decisions, enabling the treasurer to take rapid actions based on fluctuations in cash and liquidity to protect the business in times of change, and to support strategic decisions when competition and markets become harsher.
This liquidity platform is also connected to multi-sources of data, and it is vital to ensure cash is protected through a comprehensive and consistent set of processes.
Finally, it needs to be have comprehensive functionality to enable treasurers to spend less time on manual tasks and more time on the business itself, for example providing intelligence to support strategic business decisions to the CEO.
Fintechs such as Kyriba help organization to manage their cash flow positioning and allows improving control of liquidity - from precise forecasting of inflows and payments from inbound customers, identifying and mitigating risks, improving controls and preventing fraud, and finding innovative ways to preserve operating cash flow.
Through these solutions, treasury can become a more strategical function going well beyond the previous mandate of the treasurer, aiming at actively identifying, protecting and orchestrating all sources of liquidity in the business.
FutureCFO: In terms of people, which is one of the most important elements in digital transformation, what’s your advice when it comes supporting people during digital transformation?
EKO: The current crisis has shown the key role played by the treasurers in providing the CEOs and executive committee members with the elements necessary for the management of the company.
This function has to be rethought as a strategic function of the company and reorganised as such.
In the short term, support treasurer’s mobility with SaaS solutions.
As intelligent forecasts are key for business, pay attention to data management and business intelligence capabilities in the medium-term.
In the longer-term, centralise payments and information, and move to a solution that will enable a complete and dynamic view on liquidities, as well as reinforced security processes.
Do not look for a system but for a partner, who can support your teams to achieve their goals now and in the future, and deliver time to value.