By digitizing the processes at the heart of their companies, and breaking down silos, business leaders can turbo-charge operational efficiency and propel massive revenue growth and cost savings.
Like Pavlov’s dogs (or a massive whale shark), digital software waits to gobble up tasty – yet tired and aged – workflows moldering in dark corners of the back office. And in the foreseeable future, the finance function will likely become the chosen appetizer.
Our new research from the Cognizant Center for the Future of Work entitled “The Work Ahead: Soaring Out of the Process Silo” highlights data-based insights and tactical advice on applying new digital technologies to front-, middle- and back-office work processes to realize new levels of business performance.
For a generation, the financial management function has seen increased cost efficiencies associated with offshoring and shared services. Often, the human value-add consists of little more than rote and repetitive prep tasks that “get data ready to get ready” – like collating, searching, cleaning and integrating data – rather than contributing true “value” through tasks like making recommendations.
Imagine the overall impact of injecting digitally catalyzed efficiency into an area long in need of a major shakeup. But because it’s in the back office, F&A is perceived as an overhead, G&A expense. You can hear the skeptics now: “The finance guys are pencil-pushers – when I didn’t fill out their form just-so, I got chewed up in their process buzz saw. There is no way they can, or will, contribute to revenue-generating activities.”
That’s why a silo mentality bedevils those who abstain from the long view on the potential of digital process change. We surveyed nearly 50 finance senior executives, and most see productivity and efficiency as chief levers to improve their work. Yet, 70% cited the ability to communicate better too. This perhaps highlights a need for finance executives to build bridges outside the back-office silo and see the horizon beyond their domain.
Finance executives also think digital will help them work faster and lead and manage better. All of these elements make a critical difference in helping finance better contribute to the revenue generating activities for the business. Using new digital finance approaches, businesses can radically improve tasks such as days-sales outstanding, working capital and a host of other levers that materially impact revenue generation.
Platforms such as Catalyst (a cloud-based Cognizant F&A BPaaS solution) use a “born automated” approach to drive productivity benefits in enterprises’ accounts payable functions by as much as 50%. Other companies, such as Intacct, Xero and its strategic partner Expensify (with its promise of “expense reports that don’t suck”), are enabling smaller outfits to apply the BPaaS model to automate processes, reduce cycle times and speed financial close – often at the click of an “I accept” button.
“Not for my mission-critical processes,” you may scoff. Or, “Those platforms are only for midsize companies.” But at what point did platforms like Workday and Salesforce reach a watershed, and go beyond small and midsize businesses? Over a decade ago.
Changing things for the better in F&A with digital process integration is just the beginning. Consider the eminent possibility that Blockchain – as a massively scaled, distributed and encrypted ledger that presents an entirely new digital process platform – may roll like a tank tread through the transaction-based accounts receivable/accounts payable cornerstones of the modern finance function. Though in its infancy, Blockchain has the potential to completely reengineer long established norms within the most risk-adverse parts of the typical Fortune 500 company’s operations.
Getting Finance First in Line
Finance has never been regarded as the frontier of innovation (to put it politely); yet that may be about to change. Executives and leaders recognize that reimagining this often unglamorous – but vitally important – function is crucial to enabling a competitive position in markets that are changing faster than ever. Here are some steps your organization can take to anticipate and accelerate change.
TODAY: Discover the art of the possible.
Realize that the way that finance has been done since the advent of the pen-and-ledger is changing. With new digital apps and platforms, the untethering of finance process inputs and outputs from source systems, touchpoints, complexities and dependencies allows for new ways of working. The first order of business is to deploy intelligent automation (or “systems that do”) to chew through any and all rote and repetitive accounts payable/ receivable work in which humans are essentially doing the same thing on a “swivel-seat” basis.
TOMORROW: What could “good” really look like?
If you could imagine better and different outcomes for finance, then imagine what the ideal would be and work backwards from there. The cost savings that finance leaders achieve via new, digital approaches can fuel innovation in tasks such as days-sales-outstanding or control gaps. And that’s just a start – consider the improvement to in-the-moment decisions vs. the friction and latency of “we’ll get that spreadsheet to you in 48 hours.”
ONE to TWO YEARS: Getting from here to there
Like launching a spacecraft to a pinpoint spot on the moon, success depends on precision mapping and alignment of process change. So continue to focus on the future state of “what good looks like.” Use frameworks to guide and control process, geographic and business unit change around all your digital finance platform enablers (whether it’s platforms such as Ariba and Concur, or newer platforms like the aforementioned Catalyst). And above all, stay the course; with these small steps, big things can happen – and finance can be a showcase for the rest of the organization.