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The unique value creation opportunity for CFOs created by the global pandemic

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CFOs have always been asked by CEOs to do more with less – something that has never been truer than it is today. According to a recent Gartner survey, CEOs expect CFOs to focus most on driving growth in profit whilst maintaining and preserving cash and cash flow.

Whilst the last 18 months have presented a challenging economic environment for many businesses, our forced reliance on technology to enable business continuity throughout the global pandemic presents a huge opportunity to drive optimisation.

Beyond the adoption of shared services, the development of finance as an efficient and insightful value creation centre from its roots as a ‘cost centre’ focussed solely on stewardship, has been down to advances in technology. This is something CFOs clearly recognise as, according to the same survey, 82% and 70% indicated that they would be increasing their investment in “digital capabilities” and “information technology” respectively.

What does investing in “digital” really mean?

The internet is awash with news of artificial intelligence (AI), robotic process automation (RPA) and advanced analytics being the “next big thing” in business, typically being pushed by vendors or consultants with a commercial stake in selling these solutions. The same Gartner report highlights that nearly 1 in 5 CFOs believe that either AI or digitalisation will have the greatest impact on the finance function over the next three years.

There are some excellent case studies and statistics to support the hype. Over lunch recently, a successful programme director proudly told me that one of his previous clients had moved from a team of over 150 individuals processing just over 3.5 million invoices per annum to just 12 people performing the same task in the space of a few years through investment in RPA. However, the reality is often much more complex than a simple strapline.

Just as new technology alone is rarely the answer to a business issue, RPA acts only as an accelerator of existing processes. If your current processes, performed without RPA, require a high degree of exception management, your new processes will require just as much (if not more) when fed into an automated process.

What about AI?

Artificial intelligence has almost unlimited potential over a long enough timescale and will, when combined with RPA, undoubtedly have a profound impact on future organisations. However, for most businesses at present, investing in AI on top of an investment in RPA, is akin to putting a very fancy plaster on top of a slightly fancy plaster – both of which are stuck over underlying issues in process and data.

Without investment in each of technology, process and data, the sorts of efficiencies in headcount outlined by the programme director in the example above are impossible to achieve.

The opportunity

Ultimately for CFOs to deliver more with less to fund further growth by driving operational efficiencies, to push finance even further toward the value-add, insight-providing function that it can be. a holistic and enterprise-wide view is required

As CFOs look across their organisation, they may find that the capabilities of tools available or the requirements of maintaining high-quality data are beyond the skills of their existing team. The old adage that a chain is only as strong as its weakest link rings true here – new tools and technologies without the expertise to drive them will have limited value. Similarly, new tools and technologies paired with excellent knowledge, but poor and infrequent data, are unlikely to be of much use. I am aware of more than one FTSE100 organisation that has invested millions in new technology only to find that corrupted data erodes any benefit from the new system within 12 months of go-live. In others I have seen new ERPs re-worked to follow legacy processes, relegating an very expensive new system to the status of a lick of paint on a crumbling building.

Having spent most of the last 18 months working remotely, almost every part of every organisation has come to appreciate the importance of technology to the day-to-day activities that drive businesses. Having already had to adapt to changes in day-to-day process, the removal of incidental conversations and the immediate exception management possible when working in an office, employees have a greater appreciation now of the potential of technology than ever before.

Now is the time for CFOs to leverage that enterprise-wide appreciation to generate sponsorship and support for the necessary investment in data, process and technology that will lay the foundation for future efficiency.

Aled Homer, Partner within our Busines Transformation team, focusses on CFO sponsored change, leveraging our network of interim managers and independent consultants to provide transformation advisory and execution services.

If you would like to know more about capitalising on this opportunity, or to understand how we are currently supporting our clients, please contact Aled here: