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HOW AUTOMATION HELPS CFOS DRIVE PROFITABILITY

By Vijay Kurkal, CEO at Resolve

 

The economic backlash of the pandemic has challenged organisations across sectors to bolster their financial security. CFOs play a critical role stabilising businesses in the near term, positioning them for recovery, and safeguarding against the unexpected.

Given the economic climate and uncertainty, CFOs are closely monitoring every corporate expenditure and understandably questioning how current investments will add value to the business. Digital transformation initiatives are being carefully scrutinized as CFOs weigh costs and benefits.

As business leaders analyse which projects to pursue and which to table, they should consider this: research shows that innovation during downturns and investing in the future empowers companies to better survive recessions. Economists suggest that investing in digitalisation helps cut costs because it increases flexibility and allows for more sound, data-driven decision making. Additionally, companies that neglect technology investments during downturns oftentimes face insurmountable performance gaps as they come out of the turns.

Transformative technologies can deliver significant cost savings and operational efficiencies that help address immediate challenges while positioning companies for long-term success. Simply stated, digitalisation should remain a key investment area for CFOs to drive recovery and foster growth.

 

Driving Productivity and Cost Efficiency

One technology that has surged to the forefront over the last few months is automation. Automation immensely improves process efficiency by minimizing repetitive tasks and increasing output per worker to maximise resources. According to Accenture’s Finance 2020 report, robotic process automation can eliminate up to 40% of the transactional accounting work for finance departments. In addition to freeing up the finance team to refocus efforts on more strategic work, it also enables more accurate forecasting and real-time decision making – which drives better business outcomes.

Automation can undoubtedly have substantial impact on your bottom line, with applicability across many departments and job functions. For example, Resolve’s customers use our platform to automate IT tasks and processes, which has resulted in business outcomes ranging from an annual savings of 40,000 manhours to more than $15 million in operational costs.

Today’s IT workers face an overwhelming workload in the wake of the pandemic, resulting from a rapid shift in business processes to digital channels, a workforce that became remote overnight, and mounting demand on infrastructure – not to mention ongoing challenges related to increasing complexity in dynamic IT environments. Intelligent automation can help make IT more efficient and streamline a wide range of activities, such as automating the roll out new applications and services, onboarding new users, powering chatbots that enable employees to self-serve, and provisioning new infrastructure. Reducing support loads on service desks allows IT teams to focus on more business-critical digital transformation initiatives that will improve business continuity and resilience.

Automation, both in the IT department and elsewhere, also has the benefit of capturing and encoding business-critical tribal knowledge, alleviating the need to rely on a select few subject matter experts to keep processes flowing. CFOs can rest assured that business won’t be disrupted by workforce fluctuations due to illness or other unforeseen events (or the inevitable reductions in headcount that many organizations are forced to make right now).

 

Preventing Unnecessary Losses 

In an increasingly digital world, ensuring reliability of critical applications and infrastructure is no longer just the concern of the CIO. Last year, server downtime cost 15% of global businesses over $5 million per hour, while 65% were set back between $300,000 and $2 million for every hour of downtime. The significant cost of such outages should come as no surprise given today’s dependence on technology systems for virtually everything – from day-to-day businesses operations to customer service. Downtime does long-term damage to brand reputation and directly equates to lost business and lost productivity – all of which adds up to serious financial impact.

Given CFOs’ vested interest in IT performance, it’s important that they work with their IT counterparts to minimise system outages. Investing in automation enables IT teams to prevent downtime by automating preventative maintenance and proactive health checks, and when outages do occur, automation significantly accelerates problem resolution by pinpointing the source of the problem and executing remediation procedures to quickly bring things back online.

CFOs seeking to streamline operations should also be aware of AI for IT Operations (AIOps), which leverages machine learning and advanced analytics, alongside automation, to help further ensure business-critical infrastructure remains up and running at all times. By collecting and analysing immense amounts of data from a variety of systems, AIOps can quickly identify and, in many cases, predict issues before they impact the business. By pinpointing a problem in the making and triggering automated processes, AIOps can help your business avoid costly outages and improve business continuity (not to mention safeguard customer satisfaction).

Today’s business landscape has been altered in profoundly unexpected ways, shifting customer demand and making the need for speed, agility, and optimisation more pressing than ever. CFOs can ensure their organizations survive and thrive by making strategic technology investments that offer immediate value, while also fuelling long-term growth.

Business

THE EFFECTS AUTONOMOUS DRIVING WILL HAVE ON THE TRANSPORTATION AND LOGISTICS INDUSTRY

Stefan Spendrup, Vice President of Sales Northern and Western Europe at SOTI 

 

‘Big thinking’ articles on how to disrupt industries from retail to healthcare have been so prolific in recent years that you would be remiss in assuming we have moved forward from the digital transformation era. Rather, it is important to think of these transformations as the natural extension of a technologically driven world, in which companies are constantly adapting to meet ever-evolving market demands and customer needs. As the pace of development in technological capabilities has increased, so too has companies’ access to technology. With this comes an expectation that companies remain current with the latest advancements.

 

Following the mobile-first era, the next stage in the evolution of digital disruption is the move toward robotics through the Internet of Things (IoT) and Artificial Intelligence (AI.) Once companies have integrated a comprehensive mobility strategy within their operations, we find them increasingly turning to “what’s next”; solutions that will give them an even greater advantage against competitors and help them stay ahead of the field. Machine learning is poised to meet that market demand.

 

The transportation and logistics (T&L) industry is at the forefront of this trend. An industry that may seem at first to be traditional and unchanged by technology over the past half century, has been among the earliest adopters of disruptive technology.

 

Autonomous trucking is the next frontier for the transportation industry. As larger enterprises move away from traditional practices, smaller organisations can follow and benefit from the mainstream acceptance of autonomous technology. This can be seen in areas such as:

  • Monitoring, information sharing and exchange across remote devices
  • Management of mobile devices, remotely, which can eventually be applied to powering and controlling autonomous devices
  • Remote support
  • Performance data and analysis

 

The numbers make the case. In the UK, 1.44 billion tonnes of goods were shipped via heavy goods vehicles (HGVs) in 2019, which is an increase of 2% when compared to the year before. Global e-commerce sales are set to reach $5 trillion (£3.8 trillion) by 2021, driven largely by lowered consumer costs for online shopping and the ease of ordering online for everything from fruit to furniture. This trend is not likely to decline, especially as many are looking to limit in-store interactions in the wake of the COVID-19 pandemic. It will be difficult for transportation and logistics companies to ignore the financial benefits of automation alone.

 

Evidential benefits of automation within the supply chain and operational practices already exist. This can be explicitly seen in Amazon’s famous robot warehouses. These IoT-enabled robotic devices can sift through packages faster than humans can. They can work anywhere and under pretty much any condition, which is why they have been employed within the supply chain to speed up delivery and enhance the end-customer experience. The Amazon example indicates that as technology advances, adoption is likely to surge.

 

When turning our focus onto delivery services, we are seeing incredible interest in autonomous trucking, which has the potential to deliver faster, more predictable and more reliable service. These benefits do not negate the valuable role humans will need to play in overseeing quality control, providing support and conducting data analytics functions to aid in further innovation.

 

Prior to implementing full-scale autonomous trucking, shippers will need to ensure that the management and assessment of a connected fleet meets jurisdictional and federal legislation in addition to minimising cybersecurity risks. High levels of connectivity often translate into greater security risks, and companies will need to prioritise security to ensure systems are built with cyber resilience capabilities and can respond quickly in the event of a cyber breach.

 

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ACCOUNTANTS HAVE BECOME CRITICAL TO THE SURVIVAL OF BUSINESSES AND THEIR REPUTATIONS DURING COVID-19

Stuart Cobbe, Director of Growth, Europe, MindBridge

 

The opportunity for fraudulent activity to flourish as finance departments operate remotely with less oversight in these extraordinary Covid-19 times is inevitable. Government loans and financial support have been given out with little or no accountability to businesses that are struggling with the change in their trading environment and as a consequence businesses find themselves in financial need.

There is already evidence of corporations handing back furlough grants as HMRC offers a 90-day amnesty, but without rapid data-driven insight and risk stratification, businesses may not know the extent of their exposure. Indeed many businesses face the daunting prospect of repaying loans at the same time as paying deferred VAT early next year in a far from certain trading environment. Stuart Cobbe, Director of Growth, Europe, MindBridge explains that the role of the accountant has now become critical to businesses and their reputations.

 

Unlocking transparency

The Covid-19 landscape is fluid and ever-changing, and businesses require accurate visibility of all aspects of their business in order to plan effectively for the future and to understand their financial position. As the economy continues to recover to a new ‘normal’, companies need to focus on the next 6 months. How many ‘zombie’ businesses are only operating due to deferred VAT payments? How many companies will fail when they cannot repay loans? The role of the accountant is vital in unlocking this transparency to provide data-driven, actionable insights.

After all, there are many questions around how government financing has been used, from grants to loans, furlough payments to VAT deferments. As of the 20th September, the total cost of furlough claims has reached a staggering almost £40 billion, despite 30,000 applications being rejected, with many likely to have been attempts to defraud the taxpayer. Research by economists from Cambridge, Oxford and Zurich universities found that as many as two thirds of furloughed workers continued to work.

For businesses that do not understand the extent of their exposure, they risk facing a HMRC-imposed tax charge equivalent of up to 100% of the grant to which any recipient was not entitled and was not repaid. It is, therefore, interesting to see the number of large organisations now publicly revealing plans to repay all furlough payments. For many, this is an opportunity to boost corporate reputation and demonstrate a commitment to rediscovering business as usual. However, given the huge pressures businesses have been under in recent months, many CFOs and FDs may not have the full visibility they require to effectively manage this without the power of audit.

 

Financial Risks

This is about far more than reputational damage, the potential misuse of furlough is far from the only financial risk. The extraordinary shift in every business’ modus operandi over the past few months has opened the door for opportunistic fraud. New sources of income; staff working from home with limited oversight; the financial pressures – both business and personal – created by the recession. The misappropriation of assets should be a very real concern for businesses of every size.

For organisations that have relied upon grants and loans to survive, an employee exploiting the lack of oversight to syphon funds for personal use could tip the company into failure. Companies must determine how – or whether – deferred VAT payments and loan repayments can be made. Is the company truly solvent or no more than a ‘zombie’ business operating with a balance sheet propped up by short term government finance?

 

Actionable data

Business resilience and reputation is a priority in this era, and CFOs or FDs may be struggling to establish trust across businesses now operating under a whole new range of pressures, from slimmer margins to a disjointed, remote workforce. There is an obvious need for complete visualisation of financial risks, and accountants play a crucial role in unlocking this data.

The rapid identification of mistakes in government support applications, potential fraud and the analysis of which deferred payments and loan repayments can be made and when – whilst ensuring other risk factors do not jeopardise business stability – is essential to futureproof the business, and accountants can assess data to provide this information in a complete and actionable format to lead smarter company decisions. This is the data insight CFOs and FDs need today.

Traditional financial risk assessment models will not be adequate. At best, problems will be revealed months after the fact. Companies need rapid identification of areas of unexpected activity today. This is where accountants and finance departments using sophisticated machine learning and artificial intelligence techniques can deliver real business value by rapidly assessing financial data and surfacing unexpected activity. Armed with this information, finance teams will know where to focus activities, the questions to ask and the remedial action to take. This information will drive departments and remedial action to ensure business success and growth as the nation gets back to its feet.

In short, accountants and finance professionals can provide the answers businesses need today, whilst helping managers to plan for the future effectively, despite the changes in policies and protocols as the pandemic continues to throw curveballs. An audit can quickly identify problems including but not limited to, cash flow, fraud, misuse of grants, loan repayment issues – all whilst offering the guidance and steps to safeguard the business to promote resilience and protect the solvency and reputation.

 

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