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Reimagine Finance in the Digital Economy 

The Digital Economy is impacting, in an unprecedented manner, operations and functions for all lines of business within  enterprises. The challenges of the digital age are unlike anything that businesses had to confront before. The speed of change,  emerging channels, changing customer expectations, advent of new technologies are all causing disruption to the business and processes alike and as a result, compelling executives to acquire strategic capabilities to stay not only relevant in the marketplace but pave the way for sustained growth and profitability over the long term.   

Transformation of the Finance function is an inevitable initiative as so much change is taking place that affects the routine and strategic finance functions, consequently, there is a sense of urgency to transform and reimagine Finance and is a  top priority for the office of the CFO to respond and act decisively. 

Trends and Drivers    

Financial services industry is undergoing a major shift by  embracing the Digital Finance strategy and creating products and services focused on improving human experience and delighting the customer.

The emerging Blockchain economy is on its way to create a whole different experience in how organizations interact with one another. 

The new economy of Algorithms is set to transform the world as we see it today to be so much influenced by Machine Learning, Artificial Intelligence, Hyper-Connectivity. These capabilities by far are the most innovative and groundbreaking and are here to disrupt the status quo in a significant way. 

Cloud computing is a game changer not only in terms of scalability and agility but also offers financial considerations of capital expenditure and operating expense management. 

Information security and risk management are being looked at with a renewed focus. Threats of fraud and cybersecurity breaches are increasing exponentially. In order to effectively manage these exposures, capabilities are required by organizations that facilitate better visibility, analysis, and mitigation strategies to safeguard assets and interests. Strengthening capabilities for governance, risk, and compliance has become a key initiative for the office of the CFO. 

Merger and Acquisitions (M&A) are taking place at a faster pace than ever before. It’s not enough to integrate the acquired business for consolidated financial reporting through capture of merely monthly financial balances. A detailed and real-time view of operations is critical for insightful decision-making. Therefore, capabilities that can provide a repeatable framework to  integrate new business with agility is becoming a priority for the Finance organization.    

Investing in capabilities to improve financial operations for the organization is high on the agenda of the CFO. Real-time receivables management with automated workflows, machine learning enabled cash application, self-service analytics, transparency, and flexibility are critical capabilities for achieving higher levels of operational excellence.

Finance of the Future    

Finance organization of the Future will strive to acquire strategic capabilities reflected in the following principles:   

  • Standardize Processes for Efficiency 
  • Simplify Applications for Effectiveness
  • Automate Operations to gain speed, increase service quality, and compliance 
  • Digitize Business for building a competitive advantage 

Let’s take a deeper look into the capabilities that can be acquired under each of these principles.:   

 

Standardize 
  • Enable best-practices based business processes
  • Establish master data governance for harmonized data, serving as the single source of the truth
  • Implement integrated process capabilities for transparency and fact-based decision-making       
  • Access to real-time information for timely actions 
  • Embed algorithms for predictive analytics
Simplify 
  • Modernize ERP applications and analytics ecosystem with composable and intelligent ERP 
  • Enable touchless operations with microservices 
  • Leverage  cloud solutions to lower TCO
  • Introduce tools and processes for collaboration  
  • Move to integrated budgeting and forecasting framework
Automate 
  • Establish algorithmic business operations with RPA, Machine Learning in the areas of  Cash Application, Invoice Matching, Account Clearing
  • Empower users with self-service capabilities to access information anytime, anywhere, on any device
  • Enable intelligent applications with automation and digital assistants
  • Gain agility and increase responsiveness 
Digitize 
  • Empower finance team to perform high-value activities
  • Manage cyber risk and governance, and align with information security standards
  • Enable digitized shared service framework
  • Exception based management of the finance function 
  • Enhance customer experience

  Are you ready to take action…   

There is no doubt that the Finance function will experience major transformation in the digital economy. As this happens,  there is a need for all finance and accounting professionals to take action. As an executive you will need to make decisions on acquiring these new capabilities. As a finance leader you will need to encourage your team to learn new skills to effectively operate in this new world of Reimagined Finance!   

Dinesh Chhabra is a Principal Architect at Mindset. He is an accomplished leader and an expert SAP Solution Architect with a proven track record of successfully delivering SAP enabled solutions for over 25 years, helping customers realize benefits of the digital age. He has extensive industry experience in construction, solar energy, professional services, manufacturing, chemicals. He is a seasoned professional with expertise in the Finance and Accounting domain coupled with a strong background in SAP S/4HANA Finance

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