In the latest in our series of articles that go back to fundamental principles, Lutamyo Mtawali FCCA offers tips for becoming a cognitive enterprise.
Advances in technology such as artificial intelligence (AI), blockchain and robotic process automation (RPA) are having a powerful impact on the way finance teams function and on the structure of the business as a whole.
And who better placed than the CFO and finance team, in their role as stewards of data, to drive the benefits that this technology can bring? By curating rich proprietary data and reinventing the team to deliver comprehensive, real-time insights, CFOs are already helping their organisations shape strategy, drive growth, reduce cost, manage risk and compliance better, and ultimately achieve sustainable competitive advantage. A recent global C-suite study by IBM found that 42% of more than 2,000 CFOs surveyed are operating, building or considering a data-driven and digital business platform model.
Where to start
Here are some of the practical steps that you can take to lead your organisation’s transformation:
- Assess the business case for investing in changes to finance technology that may have a material impact on enterprise results.
- Re-engineer finance processes and drive change by leveraging exponential technologies such as AI and RPA; identify some of the key areas ripe for automation – ie highly manual, repetitive, routine and time-consuming activities.
- Continually revisit and adjust the business model and technology architecture.
- Enable intelligent workflows that are flexible and can be replicated internally in other functions.
- Actively curate proprietary data and ensure it is secure, end to end.
- Upskill the finance team to build digital capabilities.
The areas in which technology is being used to optimise finance processes and create intelligent workflows include financial planning and analysis, procure to pay, order to cash, fixed asset management, record to report, compliance and control. In addition, finance leaders are collaborating digitally with external entities in areas such as treasury management and financial reporting.
For example, in the case of procure to pay, by using AI and machine learning, automation, analytics and cloud computing, it is possible to extract data, match invoices and purchase orders, assign general ledger codes, determine tax codes, code non-purchase order invoices and post invoices. This will reduce operational expenditure, be faster and more accurate, help with risk management and compliance, reduce fraud and overpayments, and improve auditability and transparency. It should also reduce the number of queries and speed up response times.
To become a truly ‘cognitive enterprise’, CFOs and finance teams need to determine the business benefits of particular technologies and build on the business’s previous IT investments. It is vital to put intelligent workflows at the heart of this evolution.
Here are some of the outcomes that can be achieved by leveraging technology.
- Value can be added to the business generally, including through the introduction of intelligent workflows with end-to-end processes that cut across boundaries, harnessing data from the entire organisation to provide seamless, enhanced real-time, personalised and context-rich insight.
- Value can be added to the finance function more specifically, including through the use of more streamlined, accurate and faster transaction processing, increased responsiveness to suppliers, business partners and customers, and greater transparency across the organisation.
- Proprietary data can be introduced and enriched with public and licensed data, effectively integrating data from ecosystem and network partners.
- New paradigms, best practices and competitive advantage can be established.
- Workers can be made more agile, collaborative, knowledgeable and empowered.
This article was published in Accounting and Business Magazine and written by Lutamyo Mtawali FCCA. Lutamyo is a finance transformation expert at IBM Global Business Services.