‘Digital’ and ‘IT’ probably are not the first words that come to mind when you hear the word ‘finance.’ According to McKinsey&Company, though, they should be.
In the recent publication, “Memo to the CFO: Get in front of digital finance- or get left back”, authors Kapil Chandra, Frank Plaschke, and Ishaan Seth outline the increasing need for digitization in finance as CEOs seek real-time data that can support business decisions. While Chandra, Plaschke, and Seth advise CFOs to hop on board the digital finance train, as they may miss out on significant business development opportunities otherwise, they also recognize that “the rapid arrival of innovative technologies plus a general shortage of top technology talent” prevents CFOs from driving full speed ahead.
What Chandra, Plaschke, and Seth are referring to is unfortunately all too common in the IT domain.
In fact, the BusinessWorld article, “The Evolution of Robotics Process Automation”, quoted a report by Etventure, Digital Transformation 2018, that stated “Most companies (55%) will need to change their business models due to digitization in the upcoming years. However, the wide majority (62%) of companies state that the knowledge and capability to manage digitization is not sufficiently available.”
As computing resources become less expensive, the number of systems, servers, applications, and technologies that IT must manage increases; yet the rate at which IT budgets are increasing is not in pace with this increase in computing resources. What’s worse? Skilled IT resources are harder to identify.
In other words, there is a lot to manage and insufficient numbers of people and finances to manage it.
The solution? Investing in the right technology.
Chandra, Plaschke, and Seth identify four areas of technology that will be most useful in digital finance.
4 Digital Solutions for CFOs1. Automation
Chandra, Plaschke, and Seth cite research from the McKinsey global institute, which states that 40% of finance activities can be fully automated. Simplifying these processes will not only save time, costs, and manpower, but also allow businesses to operate more effectively and productively.
However, as finance transitions into a digital strategy, CFOs will need to ensure that they can keep up with their business’s changing needs. This means more applications, more technologies, and more data. While Chandra, Plaschke, and Seth advocate investment in these technologies, organizations need to be careful not to produce islands of automation tools. Rather, they should seek a single, reliable IT Automation environment to manage their various, ongoing processes and workflows.
A good IT Automation and Job Scheduling solution helps organizations coordinate, consolidate, and centralize their IT environments with a single point of control. By having one unified, cross-platform tool, financial organizations can reduce overall costs while simplifying their business and IT processes.
2. Data Visualization
“…to make good resource-allocation decisions, teams need real-time financial information.”
The issue that CFOs face in leveraging financial data to appropriately allocate business resources— and, as Chandra, Plaschke, and Seth note, to improve organizational performance— lies in accessibility to real-time information. Data is often disparately housed and inconsistently formatted, rather than centralized in one uniform layout. This is where data visualization comes into play.
Finance groups need to begin taking what Chandra, Plaschke, and Seth refer to as a “visual-user-focused approach” when it comes to managing data. More simply, data should be intuitive and easily accessible to gain key insights.
The ActiveBatch Dashboard, for example, provides a visual representation of performance, health, and workload analytics so that users can quickly and efficiently monitor both real-time and historical progress of their business and IT operational workflows.
Additionally, ActiveBatch’s extensive set of views allows users to easily identify and evaluate data. For example, Machine Load View displays a visual heat map with refined performance counter graphs so users can monitor system usage and rearrange resources based on workload needs.
Data visualization not only plays a key role in improving organizational performance, but also contributes to what Chandra, Plaschke, and Seth call data democracy, “where business information is available anytime, anywhere, for everybody.”
In creating data democracy, however, Chandra, Plaschke, and Seth warn that “business units will request more and more data, not less,” and that CFOs will need to “establish rules around data usage that reflect the specific information requirements of decision makers across the organization.”
Although readers within IT may be silently cringing as this sounds like adding to an already increasing workload, with the proper automation tool, it does not have to.
The ActiveBatch Self-Service Portal allows personnel outside IT, including finance and other business users, to run and/or monitor department-specific Jobs. For instance, finance users can execute financial processes without relying on IT, freeing IT’s time from repetitive requests and allowing them to focus on other mission-critical Jobs and operational processes (cue sigh of relief).
The idea of information being available “anytime, anywhere, for everybody” also goes hand-in-hand with Chandra, Plaschke, and Seth’s third and fourth areas of technology most promising for finance.
3-4. Advanced Analytics for Finance and Advanced Analytics for Business
Easier access and greater availability to data has business leaders asking, “How can what we know now impact future decisions?” Chandra, Plaschke, and Seth stress that CFOs can use advanced analytics to improve core financial processes, which in turn can help the CEO and other senior leaders discover “new sources of business.”
Advanced analytics— and more importantly, the role digitization plays in analytics— is something Ralph Paparo, Senior Director of Data Warehouse at Mediacom, knows well.
Paparo uses ActiveBatch to provide key performance indicators to Mediacom’s Senior Management through built-in and custom reporting tools:
“We have a series of critical processes, and it really matters from an SLA perspective in terms of KPIs, in terms of sales, in terms of activity— these are very important metrics for senior management. They expect them to be delivered by 8 a.m. every morning. They don’t care about all the disparate technologies and servers that it actually takes to deliver that piece of information.”
In addition to the four areas of technology, Chandra, Plaschke, and Seth provide action-steps for CFOs to take in implementing a digital strategy.
First, they encourage companies to take an “inventory of use cases” as well as discuss pain points in current financial processes. Where can the areas of technology mentioned be implemented? Is implementing that technology valuable? Is it feasible?
We vote yes.
In closely examining use cases and identifying areas of technological improvement, CFOs can develop the digital landscape needed not only for finance, but for overall business needs.
As digitization in finance continues to emerge, Chandra, Plaschke, and Seth argue that CFOs must be at the forefront of the digital finance movement within their companies as “they have a clear opportunity to shape the evolution of their companies.” However, to fully take advantage of what digitization has to offer, a single, unified IT environment is not just recommended, but necessary.