VIP Apps Consulting

Automation and the Modern Finance Function

Advances in technologies like robotics (RPA), artificial intelligence (AI), and machine learning are driving a new era of automation in the finance function. Companies in the leasing and financial services industry face market changes characterised by the rapid evolving speed of disruptive technologies, where even digital-born companies need to transform continually to stay up to date. The need for continuous change, to stay ahead of the game companies need to switch from a strategy of digital transformation to a one of digital growth. Today finance teams are embracing new automation technologies to control data, facilitate compliance while generating cost savings and increasing the speed of transaction processing. In this article, we will analyse how by aligning three strategic pillars, people, technology and business processes, finance teams create the foundations for automation and transformation, moving the finance function role away from the traditional transactional based repetitive tasks to a strategic, oversight and control function.

Business Processes Analysis, Reengineering at the Core of the Automation Strategy

According to Gartner, by 2019, only 50% of organisation will realise the impact of process automation on top-line growth. Many companies are erroneously focused on headcount reduction instead of the business processes. What autonomous learning systems do is to encode an existing process. The true benefits are realised when the automation strategies include the mapping of existing business process aligned to the new business outcomes and goals. Just adding robots on top of this legacy systems will limit the transformation including the external customer experience. As automation technologies are incorporated on system-level solutions, these prompt rethinking of the entire workflow and workspace. The basis of robotic process automation (RPA), is to enable enterprise-wide deployment of software to handle routine business processes. Automation is already present across activities in the front, middle and back office in the leasing and financial services industry. Fin-Techs have been able to take innovation to a new level, by leveraging on these technologies to reset customer expectations, creating simple experiences, where a mix of design and automation provides them with a frictionless process and a fast response. In this market scenario, automation and business process optimisation can bring great benefits to the leasing and financial services industry. Companies will look to invest in other ways to differentiate themselves and to stand apart from this new competition by enhancing, tailoring and personalising the customer experience. The role of the CFO is critical in setting the strategy and leading the transformation as a business project and not solely an IT project. Starting first with identifying and understanding the type of activities that can be automated and the triggers for automation. Activities like account reconciliation, period close, journal entries, invoice generation, processing of expenses, approvals, audit and compliance testing monitoring.  Today many organisations are in their journey to comply with new leases standards IFRS 16 and ASC 842, coming into effect in January 2019. Finance departments are going through a manual review of all lease contracts and unstructured data to identify leasing and prepare for entering them onto the balance sheet. This project presents an opportunity to work closely with IT and other departments, identifying new business processes and implementing small automation technologies that can build on the bases of optimised business processes and data. As the speed of data flow and efficiency increases, ensure everyone is aligned with the best way to move forward and develop strategic opportunities that will best position company to succeed.

Aligning Technology and People to Reduce Strategic Challenges

Automation, like other technology implementation, is often seen as an initiative led by the IT department. As a result, the technology implementations can end up being a patchwork of unrelated tools across processes. Successful implementation strategy occurs in an organisation with cross-departmental collaboration, breaking down communication silos, ensuring that everyone within the organisation has the right information needed to adopt and embrace automation. With organisations creating new competitive advantages through digital initiatives to meet the demands of the ultra-connected customer, cross-departmental collaboration ensure that finance department have the information they need to properly assess risk, develop budgets, manage cash flow and execute other key finance functions, while also helping other departments gain crucial business knowledge. A recent report from Ernst and Young, confirms this trend. According to this report, CFOs and CIOs are becoming increasingly connected, with sixty-one percent of CFOs saying that their collaboration with the CIO has increased over the past three years, 71% of CFOs have increased involvement in the IT agenda. Communicating what automation means to your organisation is critical. The potential challenges of change and fears of job losses, bring resistance. With changes in the demographic workforce, companies need to find new ways to foster employee loyalty. Implementing the right technology to free employees from the more mundane aspects of their jobs, finance departments have the opportunity to re-task people to support the business. Thoughtful workforce planning, realigning resources as the finance organisation goes digital, many staff members’ roles will evolve. People are not just at the heart of success, but also at the centre of many CFOs’ day-to-day routines. To fully capitalise on the new tools and scalable processes, having the right talent for the organisation will actually allow CFOs to spend less time managing their employees and more time making a truly impactful change in any organisation. Automation just provides information in more readily usable formats. You still need an interpretation of that data.  

Tomorrow’s Finance Function

In this rapidly changing market full of new challenges and risks, finance executives can play a strategic role in paving the companies’ path to toward growth, implementing improved business processes and technology. Although these initiatives require both time and upfront investments, our experience shows that companies that re-define their business processes and align with new technologies have an advanced ability to respond to market changes. Technology innovation and implementing business processes that enhance collaboration, allow finance executives to gain a clearer picture of what’s happening across their organisations and to guide the company in reaching their corporate goals. The Fourth Industrial Revolution is already underway, as the leasing and financial services industry changes with the advancement of new technologies and the increasing digitalisation of businesses, CFOs need to position their companies to be able to adapt to whatever comes in their way. The future ERP will be built on automation technologies that will enable your finance team to focus on overseeing the business, improve productivity, and provide the needed critical insights into strategic planning and goals.   VIP Apps Consulting combines experience in the finance function and comprehensive knowledge of technology innovation, to help our clients in the leasing and financial services industry identify those areas of improvement in their digital transformation journey.  Keep up to date with the latest technology trendsand other industry news by following us on LinkedIn.

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