by Andrew Foster, VP Consulting EMEA, AppZen
As organisations adapt to dramatic changes in working practices, the need for digital transformation has increased dramatically. Many organisations have been forced to move quickly to virtualise and digitise, as 2020 has seen huge changes in how (and which) businesses operate in an increasingly uncertain economic landscape.
The current crisis presents many challenges but it also presents unique opportunities for business transformation. As Nobel prize winning economist Paul Romer once stated, “A crisis is a terrible thing to waste.”
Desire to adapt to new ways of working
As companies respond to new challenges, the way teams approach problems and the way they work together to provide business value can change for the better. Formerly disparate teams are now coming together to work on collaborative solutions to resolve current problems.
Today’s business climate presents an opportune time for finance teams to use digitisation to reduce the amount of time and effort they expend on manual processes, so that they can increase their focus on managing core business issues and making more strategic decisions.
In a time of such dramatic, forced change, many of the usual constraints to business evolution have been removed. Concerns about breaking out of comfort zones or making changes too quickly are gone as companies look to solve the clear and immediate challenges they are facing. Similarly, structural inhibitors – like teams working in silos, general inertia and inflexible processes – are being replaced with a renewed energy and a common desire to adapt quickly to new ways of working.
This year is proving to be a catalyst for important organisational changes. As savings become more crucial to company survival, the misalignment of resources across the financial function can no longer be ignored. Most businesses can benefit from digital transformation to help finance teams modernise and become more efficient, effective and resilient.
Finance is a business function that can be dramatically improved through automation and the use of intelligent software in decision making. It’s arguable that the finance function of the future is being born out of the current necessity.
Focus on fundamental shifts
As they adapt to new ways of working, finance teams should focus their transformation efforts in areas where they can make fundamental, long-term changes. This means accelerating existing digitisation programmes and picking up on existing industry trends that go beyond short-term firefighting efforts merely designed to get through the current challenges.
Within the financial function there is an increased need for agile forecasting and reporting processes that rely on live data, rather than extracts, spreadsheets and manual reports. Finance teams were already making this shift, but this year has seen a more urgent need for real-time metrics that reflect the evolution of a rapidly changing business environment. This shift in approach is likely to be permanent with no reversion after the crisis is over.
Another important trend has seen many offices shift to remote working, and finance teams have been driven away from the standard practice of gathering paper-based documents and receipts. The ability to apply AI to paper trail-based processes has simplified a once tedious operation, making room for lasting change.
Why finance processes are ideal for transformation
Many finance processes have three characteristics in common that AI is well suited to transform: they are based on paper trails, require contextual information and operate at high volume.
In finance departments there is traditionally a paper-based, unstructured information flow. Many companies are still dealing with largely manual processes that are very time consuming and error prone. AI can understand unstructured finance documents, like receipts, POs and contracts. Unlike general purpose OCR systems that make basic mistakes, like confusing a ‘$’ and an ‘S’ or a ‘£’ and a ‘6,’ finance focused AI is much more accurate.
There is also the need for contextual information from outside and inside the organisation. AI can enrich the paper trail with a lot more context. It can look at the entire history of expenses for duplicates, for example. It can compare prices, suppliers and individuals against publicly available information, like Google searches and proprietary company information.
Large volumes of paperwork make comprehensive manual work cost-prohibitive and prone to error. Unlike a team of people, AI never rests, and can scale infinitely. It can apply the same level of rigour to every document, meaning a much more thorough and accurate analysis is undertaken in a fraction of the time.
Fix the misalignment of resources and value
The misalignment of resources and value across financial functions makes transformation absolutely critical for success. Most of finance’s resources and time are traditionally spent performing transacting, record keeping, reporting, and compliance duties. While these activities are crucial to the business function, they do not drive enormous added value. By allocating so many resources to these activities, finance teams don’t have the bandwidth to spend on financial planning or strategic activities that would increase the value they provide to their organisations and contribute significantly to success.
By implementing AI driven systems, finance teams are rebalanced. They can focus more of their time on strategic finance initiatives rather than on manual and tedious tasks. As digital transformation programmes are accelerated, finance teams can look at making a more permanent change and realigning their focus to areas of the business where they can add the most value.
