By Chetan Shroff, Oracle Commercial Leader, Cognizant
Traditionally, when you thought of a finance organization, you thought of accounting. In the modern, digitally-enabled enterprise, however, that’s no longer the case. The future of finance organizations has arrived, and their role has moved far beyond just closing books and issuing profit and loss statements. In a very real way, the new finance organization has become a strategic partner to the business.
Finance’s elevated role is due in no small part to the advent of new technologies — specifically, cloud-based enterprise resource planning (ERP) systems — that help the organization access and analyze unprecedented quantities of information in real time, from anywhere. No other business function has the same visibility into as much data from as many sources as finance.
This extraordinary new capability means that finance is now in a prime position to provide the data-driven decisions that impact every part of the business, from HR to sales and marketing to business development and operations. No longer just an accounting function, finance has become an indispensable partner for driving growth and revenue for the whole business.
Take a company that is evaluating the acquisition of another business. Although the final decision may be made by executives based on recommendations from the business development team, the supporting ROI calculations will most likely come from the finance organization. The reason is simple: finance has ready access to all the relevant data.
The new generation cloud-based ERPs have made a big difference. Once an M&A transaction has been finalized, the harder job of merging the two companies begins. In the not-too-distant past, finance systems were too rigid to provide insights into the synergy benefits from both companies. The most you could hope for was to simply consolidate the books and do joint reporting using dozens, hundreds, or even thousands of spreadsheets.
Cloud ERP changes that game. To begin with, cloud ERP is significantly more scalable and flexible, allowing for faster merging of disparate operations. But more importantly, cloud-based enterprise performance management (EPM) and analytics allows leadership to see how to best leverage the respective strengths of each entity and drive market value from day one.
The new cloud-powered finance organization can access data on the move from anywhere. Unlike in the old on-premises ERP world, people can now get immediate access to analytics while sitting in a meeting. Gone are the days they had to call IT and wait hours or days to get that same information.
Bot-driven automation is another innovation available to the modern finance organization that’s increasingly being deployed with measurable success. Smart digital bots can now sift through systems and databases in seconds to pull, say, the last 10 invoices for a particular customer, eliminating the need to run periodic reports. Digital assistants can help employees submit expense reports by taking a photo of a receipt and submitting it via their mobile device. Most of this is done today using chat, but soon you’ll be able to talk to your digital assistant; voice is poised to become the new user interface.
Other cloud-enabled technologies, though still emerging, will soon become commonplace in finance, driving a major boost in productivity. These include blockchain, which can be leveraged to improve the speed and accuracy of audits and other governance, risk management and compliance (GRC) routines. Machine learning will analyze large data sets—including data from outside the company, such as weather reports—to uncover hidden patterns, predict potential problems, and recommend next actions. Finance is also beginning to adopt social and mobile tools that can accelerate the period close by facilitating fast collaboration and decision-making between remote teams.
At Cognizant, we’ve seen firsthand how Oracle ERP Cloud is helping finance become a strategic partner to improve business outcomes. We recently helped a global freight forwarding company deploy a suite of ERP cloud apps to modernize its finance and procurement operations, which were bogged down by outmoded business systems. Invoice processing and financial reporting were all manual, collaboration with suppliers was non-existent, and critical financial controls were lacking.
Now the company has automated a vast majority of its financial processes and introduced fast, efficient online collaboration with suppliers. The company has a single system of record with standard audit trails. Real-time analytics and reports are driving better decision-making. Book closings that used to take weeks now take days. Overall, we’ve estimated that the move to cloud-based ERP has increased the productivity of the company’s finance and procurement operations by 25%.
The finance organization of the future will help enterprises do all of that and more. A future CFO will rely upon a live dashboard for margin analysis delivered with interactive visualization tools, integrating commentary from a natural language generator that draws on data populated by a robotic feed. This future is really not that far away.
How is your business adapting to the finance organization of the future?