While companies have been transforming their finance models over the last decade, Covid accelerated this process. Employees shifted to remote work and business models moved online, and changes that would previously have taken years to accomplish were compressed into months or mere weeks.
Before the pandemic, some companies were already highly digitally dexterous. Others were less so. Yet, in the wake of sweeping digital reforms borne from necessity, these digital gains offer Chief Financial Officers (CFOs) a window of opportunity to boost efficiency, inform key decisions with analytics, and create value in their organisations - no matter which stage of transformation they are at. Here’s how.
Drive efficiency with RPA
Many companies have already made the first step to move their financial services operating systems to a cloud-based enterprise resource planning software or a software-as-a-service solution. With this shift to the cloud, companies have more data than ever at their fingertips – data ready to be analysed and potentially turned into valuable business insights.
Companies in Asia are expected to continue deploying more robotic process automation (RPA) to digitise transactional finance processes, which will tangibly boost efficiency.
CXOViews: Streamlining finance with automation
Based on recent discussions with CFOs of companies headquartered in the region, US and European multinationals based in APAC are further on this journey compared to local companies, which tend to rely more on traditional models and larger finance teams.
If a company has already moved manual processes to a shared service or business processing outsourcing firm, these wins could be less significant. On the other hand, companies that have not will likely see marked efficiency improvements.
Leveraging data to offer informed decisions
Going beyond RPA, the shift to the cloud and vast amounts of data now available means CFOs have an opportunity and expectation to broaden their focus to not only improve the bottom line, but to also contribute to the top line by leveraging data to provide actionable business insights.
Using machine learning and artificial intelligence (AI) for forecasting and predictive analysis is the next frontier for companies, where efficiency gains from RPA can help create more time for higher-value work such as AI-enabled data analysis and forecasting.
The Covid-19 pandemic showed that one of the most valuable aspects of digital transformation is how it can support the CFO in navigating the current volatile landscape through increased agility.
A core part of the CFO’s responsibility is to forecast future financial performance and traditionally, this has been based on historical financial data and fixed assumptions. However, in a pandemic or similar scenario where all the assumptions go out the window, traditional methods will not provide accurate predictions.
With the right use of data and predictive forecasting, CFOs will be better equipped to look at a large number of data points and multiple scenarios and generate valuable insights that can benefit the whole business, well beyond the traditional scope of finance.
More broadly, there is a growing expectation that the CFO can analyse any major change or risk and its impact on the business. This is all part of the finance function moving away from the focus on transactional accounting to becoming more centred around decision-making support.
The role of the CFO as a leader in the business and co-pilot to the CEO has moved to the fore and as a result, the CFO of today is no longer simply working with numbers. Instead, they leverage data more broadly to inform and advise other leaders in the organisation, especially when it comes to big changes that affect the company's performance and risk profile, such as ESG.
Creating value with digital transformation
While the impacts of digital transformation are most directly measurable in terms of costs saved and efficiencies gained, there are broader measures to consider:
- Do organisations have better data and are they generating real insight for finance to impact the business positively;
- Are employees embracing the technology, is it adding value to their jobs, and is their engagement improved as a result;
- Has the customer experience improved;
- Is finance more agile and finally, are finance teams being better equipped and empowered to adapt to the current environment, ultimately creating value?
In other words, if your team isn’t doing more value-added work and providing better insight into the business, your digital transformation is not complete yet!