Digitization and automation are rapidly becoming the norm in finance departments. Many corporate automation projects are initiated by the CFO or Financial Manager. Despite this, finance departments still often work with Word and Excel files, or by manually connecting data from different systems. This not only applies to smaller organisations, but large companies too. Time for an overhaul of the myriad of separate tools, systems and files. But where to begin?
We’re all familiar with the classic scenario: ask HR and finance to compile a list of staff members and you’ll undoubtedly get two versions which don’t match. Whereas finance talks about FTEs and expenses, HR is all about headcount and people, meaning we can end up getting lost in translation. But isn’t it time we started combining forces more often?
Far-reaching digitisation is the new standard in finance. Smart, fully automated processes eliminate manual transactions and complex spreadsheets. No hands accounting, as it’s known at Exact. Exact CFO Onno Krap, and Kevin Mottard, manager of the Dutch CFO community at Alex van Groningen, explain the radical impact of digitisation on companies.
Financial managers who are searching for ways to work faster and smarter are exploring the potential of big data. Big data undoubtedly has a lot to offer the financial manager. But not ‘just like that’. It’s possible to have a mountain of data, but that mountain is of little value without the strategy and the tools to convert the data into useable insights.
Aren’t robots in finance still some way off? Absolutely not. They are closer than you might think, which means that financial administration can be handled automatically. Should finance professionals be concerned?
Many organisations miss the opportunity to make major savings on their procurement, says Edward Burgers, Head of Global Procurement at Exact. “Companies which structure their Purchase to Pay processes (P2P) can add a few percent to their profit. And if you invest your savings into a good procurement team, you’ll earn double.”
The role of the CFO has changed significantly in recent years. Fifty years ago, hardly any company had a CFO, but today it’s a role with an ever increasing number of responsibilities. Are CFOs becoming the modern day Sun Kings? Or are their days numbered?
‘If the financial professional doesn’t act quickly, disruption will ensue.’ Last week, the Free University and The Royal Netherlands Institute of Chartered Accountants (NBA), two Dutch educational institutions, published findings that the financial role is ripe for disruption. In their research, they addressed the questions of what the impact of technology on the finance role is, the current extent of the application of Robotics and Data Analytics (RDA) in the financial role and how this will change the required knowledge and competences of the financial professional. Conclusion: the majority of financial professionals underestimate the impact of technology in their work.
Automation and algorithms are increasingly dominating financial processes. One important technological development is predictive analytics. What is it, what makes it successful, and what can – or should – the CFO do with it?
Robotics, machine learning, blockchain- all technologies which cause disruption and spark digital transformation. 2016 could well be described as the year in which technological developments gained a foothold in both boardroom planning and management publications. If the trend gurus are to be believed, there are some big changes on the horizon. But what’s realistic? And what time frame are we talking about? What are the hot topics that should be on every CFO’s strategic agenda in 2017?