Automating your way out of disruption – Global Banking And Finance Review

By David Brightman, Director of Product Marketing at BlackLine

The coronavirus pandemic has underlined the vital role that automation plays in the finance function. Manual tasks, inefficient processes and a lack of data insight are holding back finance functions that have not yet automated and preventing them from competing effectively in a tumultuous market. For these organisations, the ongoing business challenges caused by the pandemic should be seen as an opportunity to ensure future projects have the best chance of success. This means facilitating standardisation and planning, as well as redesigning processes so that the same inefficiencies are not perpetuated.

Unfortunately, the finance function, like most aspects of business, are facing severe disruption as a result of the pandemic. Numerous projects relating to implementing or scaling automation have been delayed or cancelled, and many distributed teams are battling with an over-reliance on paper-based documents or office-bound tasks that are no longer feasible. Many of these issues would have been softened had companies already completed the move to digitise their processes before the pandemic, but research suggests that very few companies have fully addressed the automation gap.

The automation gap

In fact, a survey commissioned by BlackLine and conducted by FSN suggests that only 9% of organisations managed to completely transform their finance function through automation before the pandemic. This is despite the fact that digitally transformed companies are two and a half times less likely to report delays in their existing project timescales compared to companies that have not invested in finance automation and 20% are less likely to report delays to future automation projects.

Having already experienced the benefits of automation, these companies are also less likely to have reduced their budgets for finance automation projects. Furthermore, the research found that finance and accounting (F&A) teams that entered this crisis further down the automation path were better positioned to weather the pandemic. This is because automation enabled these finance professionals to spend a greater amount of time on valuable, strategic tasks that could help guide the organisation through the changing business landscape. And when business was in flux, and teams had to transition to remote-working with little time to prepare, they had more resiliency to ensure the financial close ran like clockwork, without compromising financial statement integrity.

With such a strong case for automating, what is holding finance teams back?

Challenges to effective finance transformation

The majority of organisations are yet to jump on the automation bandwagon and there are a number of reasons why. Challenges include a lack of commitment to fully instigate automation across the business, a lack of resources, short timeframes for implementation, and pressure from executives who want to see a faster ROI, to name a few. With pandemic-related issues added to the mix, its understandable that there is some hesitancy when it comes to investing in automation.

However, from managing data, assessing risk factors, stress testing, to uncovering inefficiencies and budgeting, automation can and has been proven to help. For those organisations that still have reservations, looking at existing automation successes and learning from their peers is an excellent way to kick-start your own business automation strategy.

David Brightman

Its important to remember that modernising your finance function can have a huge impact on business outcomes, producing real-time updates that can be used to guide decision making and risk management. However, moving to modern accounting means taking a unified approach. Integrating systems and data for a single source of truth, so you can standardise and control processes for consistency, efficiency, visibility, and change management is the only sustainable path forward.

Tips for initiating automation within your business

To begin with, businesses must have a clear understanding of the current state of their finances and where they stand within the industry landscape. What are the challenges? Where are the potential bottlenecks and opportunities for efficiencies to be created? This is a vital step in improving transparency. If businesses dont have a clear view over what is happening within their own organisation, how can they expect to make important decisions that will improve business outcomes?

To achieve this, finance teams should look to migrate any on-premise applications to the cloud. This will enable easier access and control over how and where data is stored, while also integrating applications to function as one whole system that communicates with all necessary business departments. This will give a clearer, real-time overview of where the business is at and where necessary changes are most critical.

Next, CFOs need to look at simplifying and streamlining some of the tasks F&A teams face day-to-day. For example, when automating financial close and reconciliation processes, its essential that process owners, not technical staff, can make changes quickly. Updates like adding or changing accounts for reconciliation automation, or applying technology like artificial intelligence to transactional matching, modifying variance exception thresholds, changing standard or custom report fields, should all be within accountings span of control. Ensuring the right people have access to the right data and reports, as and when these are needed, reduces bottlenecks considerably. This in turn leaves more time for making sure reports are up to the highest possible standard and insights are used to make any necessary adjustments fast.

Once transparency is instilled and time wasting bottlenecks are reduced, businesses can begin to regain control of their systems, through investing in new ERP systems and automating their budgeting, planning and forecasting (BPF) processes. Without transforming the BPF process that provide agility and insights, businesses would be forced to run in circles, producing forecasts that would become obsolete within days. In these uncertain times, companies need to be reforecasting daily and weekly, or at the very least monthly to have any sort of handle on the business. Where some organisations were getting by with minimal sophistication in their BPF, the unprecedented effects of lockdown have exposed significant weaknesses in these processes.

Finally, F&A teams should seek to connect with a community of experts dedicated to driving modern accounting and the automation journey, to achieve a more collaborative accounting experience. This could include networking, tapping into virtual best practices and finance transformation summits, and hearing from peers at other organisations about what has worked (or hasnt) on their modern accounting journey. For automation to succeed, its also critical that F&A control their destiny. Ownership means F&A can take charge of process automation themselves, without relying on IT or technical consultants. This ensures that technology can be confidently owned and managed by end-users those closest to reengineering the business processes themselves. If the technology creates friction to driving change, digitisation efforts will ultimately grind to a halt.

This has been a trying year, and businesses have a lot to learn from recent months successes and failures alike. Taking a holistic approach to automation, understanding the benefits of automating each process, and identifying the competitive insight that can be generated through new techniques and technologies will enable CFOs to work their investment in automation harder and smarter. If you havent already decided what your automation plans are for the upcoming year, this is the time to begin.

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Automating your way out of disruption - Global Banking And Finance Review