Companies spend nearly half their time creating and updating reports, and devote just a fraction of that time to uncovering insights in the data, writes Matt Soderberg of Deloitte Consulting. From Cfo.com.
The financial close is a necessary part of business, yet among the most arduous of tasks. Every month, organizations invest significant resources in closing systems, compiling reports, tending spreadsheets, reconciling data, booking entries, and assembling huge binders.
How significant is this investment? A Deloitte survey of 600 global finance leaders found that companies spent nearly half their time creating and updating reports, and just a fraction of that time devoted to uncovering insights in the data — insights that could prove vital to the business. Your goal for 2020 and beyond should be simple: get more value from your data more quickly.
The excellent news: automation is coming to revolutionize the close process, fundamentally changing how back offices work. And chief financial officers — with their C-suite relationships and operational insights — are uniquely positioned to lead the revolution. Significant transformations like this require shifts in infrastructure, workforce, processes, and organizational culture. But CFOs can work with their executive peers and finance teams to facilitate such dramatic changes. The topline message you should be conveying? Get ready to work smarter, faster — and maybe even more happily.
How much smarter? Automation technologies like cognitive computing and chatbots can relieve the majority of finance employees from creating monthly spreadsheets and reconciling data, freeing their time (and more importantly, their intellects) for more insightful, strategic work. That vital work may provide colleagues insights into the downstream effects of their decisions — like how a proposed merger or acquisition might impact cost structure. Strategically focused controllers, in particular, could also add value to risk management initiatives, helping their companies weather challenges and crises.
How much faster? All aspects of the close process can be directed into a single automated workflow. Finance can manage end-to-end accounting closes in one place, with dashboards customized for any given team. Lightning-fast delivery and insights, free from the constraints of old, staid reporting cycles, will likely become the norm. Efficiency like this will have a ripple effect: with faster closes, insights and stories backed by data can happen more quickly. No longer a slave to hitting the monthly or quarterly deadlines, finance will be able to move at the speed of the business.
How much happier will the team be? That depends on the organization, but automation can mean a drastic decrease in manual effort and its associated mistakes, presumably providing employees greater peace of mind. Workers will need fewer tools to perform their jobs and may even be able to eliminate time-consuming meetings. But most importantly, finance professionals who use their newly-freed time to focus on gaining insight into business issues will learn skills that more directly help the business achieve its goals. Those skills will give them better career opportunities inside and outside the company.
What happens to organizations that choose to pass up or delay this transformation? First, most of your competitors are already moving in this direction. Therefore, you face the risk of higher costs from inefficiencies in finance and other departments. That, in turn, could affect how Wall Street values your company. Second, the business world is undergoing digital revolution with or without you. Without a digital transformation of your own, your organization won’t be agile enough to handle change and draw insights from massive datasets or rapidly enter new or adjacent markets.
Handling the Impact
A large-scale transformation that requires new tools, new people, and a significant organizational shift can feel challenging. CFOs are likely concerned with change management, security, and other issues that have a profound impact on their businesses. Here are three organizing principles:
Transform your talent. The type of transformation we’ve been describing is a genuine challenge for a workforce used to just doing repetitive manual processes. They’re likely concerned that machines are coming for their jobs. That isn’t entirely true: across history, humans have partnered with machines to work faster and better, and in the process, become innovators. The same can happen now. But first, you’ll need to determine the skillsets you’ll need post-transformation, whether you have them, and, if you don’t, how to get them. Critical thinking skills, for example, will be essential, as will the desire to be challenged and to change with the times. Workers are already aware that if they aren’t ready to step up, the organization may leave them on the sidelines. Help them with this.
Assess your enterprise resource planning system. An organization’s ERP is critical to this kind of transformation. If you’ve just upgraded your ERP, then you’ll need to think about robotics and other automation tools that increase efficiency across the enterprise both at home and abroad. If the company is on a mature ERP and considering next-gen platforms, now is an excellent time to find an automated finance close solution. The right technology solution can layer onto an existing ERP, while the right automated technologies will enhance your technology portfolio — not force a “rip and replace.”
Remember: faster, smarter, better. This kind of transformation can feel costly — especially to a CFO with an eye on the bottom line. But automated technologies that ease the close process have the potential to help organizations see the stories behind the data while assisting workers to use their talents better. Knowing that faster, smarter, better is around the corner can help a CFO make the business case for this transformation — both to colleagues and themselves.
Debits and credits will continue. But the technologies that can make the process faster and smarter are out there — and they’re only getting more powerful. It is an exciting time for finance organizations and CFOs who recognize the opportunity to unlock the untapped potential in their businesses. With the right partner and mindset, CFOs can move their finance processes forward while reaping the benefits of better insights, better-skilled workers, and a more innovative future.
Matt Soderberg is a principal of Deloitte Consulting LLP and the Deloitte U.S. finance operations market.
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