Today’s CFOs have clearly moved from talking to targeted action. They have a clear vision of the digital transformation journey they want to take and are eager to rack up some quick wins. Their mantra? Think big. Start small. Act quickly.
According to the findings of Grant Thornton’s 2019 CFO Survey
, finance executives have their eye on advanced analytics, robotic process automation, artificial intelligence, optical character recognition and machine learning over the next 24 months. With pressure to demonstrate a healthy return on technology initiatives, CFOs are looking to these technologies to offer up some proof points that will allow for larger-scale enterprise transformation initiatives. In fact, our survey revealed that nearly half (48%) of respondents believe it is the CFO’s job to ensure that when technology promises improvements in efficiency and effectiveness, these benefits are fully realized.
No longer sitting on the sidelines, today’s finance executives are taking manageable steps to put modernization into action by piloting a handful of transformation initiatives---often with the implementation of proven technologies that can help reduce the perceived risk of such initiatives among internal stakeholders. As a result, it’s critical that they get it right, taking small steps to help generate quick wins to demonstrate measurable business value.
What constitutes a quick win? Here are some guidelines to consider:
“Just start; don’t overthink it. Identify a business case and prove it out quickly. Then be ready to standardize the capability across the enterprise to innovate.”
- Does the initiative deliver quantifiable, measurable value within 6-12 months?
- Does it serve to build on existing investments?
- Can the finance function own and manage the process?
Roy Nicholson, Principal, Business Consulting
Grant Thornton LLP
Grant Thornton’s survey revealed that two technologies that organizations are looking to fast track that offer potential as quick wins are advanced analytics and robotic process automation (RPA). The findings revealed that advanced analytics and robotic process automation tops the list of technology priorities over the next two years.
According to a 2018 Gartner study, four out of five businesses are expected to see a negative impact on revenue this year if they fail to complete digital transformation initiatives. As a result, many CFOs have begun their transformation journey by implementing RPA to optimize manual and repetitive processes. RPA offers the finance function multiple short-term benefits including:
- Immediate process changes. As some parts of the process are ready for immediate automation, finance teams can start removing manual hours from the process and free up human capacity to address the more complex, hard-to-automate portions of the process.
- Eliminating potential rework. During the automation process, teams build code using if/then logic, which helps identify underlying process inefficiencies and opportunities for standardization. Teams that standardize first will still need to automate and may have to re-do some of all this work during the coding process.
- Minimizing disruption. Process standardization that requires people to change the way in which they work often requires significant change management and is subject to disruption and employee resistance. Standardizing a process using robots instead of humans eliminates these challenges.
Other benefits include a reduction in ongoing maintenance, a self-generating audit trail, a digital workforce that can rapidly scale in line with the business and the ability to minimize additional work around regulatory compliance processes. Benefits of RPA increase as it is further enabled using artificial intelligence (AI) programming. With this quick win, finance teams can build upon an RPA implementation (via Cloud ERP systems) and leverage other technologies such as AI and machine learning to generate deeper insights and improve forecasting accuracy. In fact, nearly a quarter of respondents in Grant Thornton’s survey indicated they would be investing in AI in the next year.
AI can be used to enhance contract management and compliance, by analysing sets of documentation to extract needed elements to determine compliance. Artificial intelligence can also support contract management solutions and accelerate compliance such as the New Revenue Recognition and Leasing Standards.
Single source of truth
Organizations continue to be on the move to pilot digital transformation initiatives to generate quick wins that can drive larger scale efforts, finance teams must tackle the challenge of getting to a “single source of truth” (a single source of financial and operational data). Companies looking to advance their analytics capabilities will be bringing in more operational data. In fact, today’s business is doubling the amount of data it manages every year. The foundation of any digital transformation is the single source of truth, not a network of tangled, disconnected systems. Without confidence in the quality of the data, finance leaders can possess no real confidence in the outcome of their initiatives.
“Taking advantage of advanced analytics is less dependent on the technology itself and more about having access to timely, accurate and a variety of data that can feed the analytics tools,” explained Roy Nicholson
, Grant Thornton principal, Business Consulting. “It’s getting to that single source of the truth and putting in place an efficient “Data Supply Chain” to make sure the data is accurate and consistent. Your analytics is only as good as the data that feeds it and a lot of organizations don’t have a good way of getting quality data into the technology to start off with. The effort to setup analytics tools is the tip of the iceberg. The task of implementing an effective Data Supply Chain is the iceberg that lies underneath the surface.”
He added, “For a long time, organizations haven’t had a really good case to address the data supply chain challenge which means a lot of them stayed in the status quo of using spreadsheets across different functions to view information. Now they realize the data challenge has to be addressed if they’re going to be able to leverage some of these new technologies and operate more effectively.”
As organizations look to greenlight digital transformation projects, CFOs, as chief stewards of data, must aggregate rising data volumes from multiple sources and must have the utmost ability to trust the data. When armed with the ability to trust data quality, finance teams can create reports and self-service dashboards that not only alleviate demands on their staff but also facilitate better strategic forecasting, planning and even uncovering fraud.
But it’s a task that’s easier said than done. As owners of enterprise-wide data, finance functions often run thousands of reports and spend an inordinate amount of time analyzing them to cull valuable insights. CFOs need to be knocking down data silos in their organization so there’s a single source of truth.
With finance teams facing a sense of urgency to drive digital transformation, CFOs need to begin to prioritize quick wins while developing long-term plans for digitizing the enterprise. “Just start; don’t overthink it,” advised Nicholson. “Identify a business case and prove it out quickly. Then be ready to standardize the capability across the enterprise to innovate.”
Principal, Business Consulting
T +1 408 346 4397