For many chief financial officers, the shift to remote working has highlighted opportunities to free up capacity by streamlining processes. While process improvement may have already been on a CFO’s finance transformation agenda for some time, the COVID-19 pandemic has shown what’s possible, leading many interviewees to look for ways to continue the journey.
With finance teams feeling stretched, the pandemic has also highlighted employees’ desire to improve processes. As one CFO interviewed for this report noted, the workforce of the future will no longer tolerate manual processes as finance professionals increasingly expect opportunities to automate, innovate and focus on higher-level analysis. Another said that prior to the pandemic, their finance team was completing 100 manual journal entries per month for each company. For them, the last year-and-a-half has shone a light on these types of inefficiencies and shown a clear need to embrace more efficient, automated solutions for tasks like this.
So what are interviewees doing in response? Several are making smaller, tactical changes driven by necessity by, for example, automating and digitizing reconciliation, invoicing and payment processes and incorporating tools to streamline quarterly reporting. Many are moving away from traditional spreadsheet software to embrace more powerful data tools that allow for better and more seamless reporting and analysis.
In other cases, finance teams are using broader system upgrades as an opportunity to improve processes. One interviewee said that in moving to a common system across the different countries their organization operates in, they made sure to also digitize and centralize activities with repeatable steps so they could free up finance team capacity. Many CFOs that are in the middle of large-scale transitions to cloud-based enterprise resource planning (ERP) systems are embracing or looking for ways to take a similar approach.
Other interviewees signalled a strong desire to speed up and streamline core activities. While many referred to monthly close processes as a key pain point, one CFO cited opportunities to improve their organization’s planning and budgeting processes. They described how their teams go through three iterations at different times of the year, which they feel leads to a longer process than necessary as people feel less of a need to get it right from the start.
Interviewees also reported a greater willingness to question what their teams do, with some saying they’re phasing out unused reports to free up capacity. As one CFO noted, this also involves learning how to say no and not being afraid to reorganize reporting and work as required.
CFOs looking for innovative ideas can learn a lot from their peers, many of whom have great ideas for improving processes. One CFO described their organization’s efforts to increase collaboration between finance transformation teams and those working on the technology side. They make sure a member of each team attends all meetings so they can bring their respective subject matter expertise to uncover opportunities to improve processes as part of the broader transformation journey.
We see opportunities for finance functions to accelerate automation efforts. As we saw in the recent CFO survey conducted by PwC and the Association of Chartered Certified Accountants, only 33% of Canadian respondents said the pandemic had increased their plans to use robotic process automation. While there’s much more to process improvement than automation, this is a key element.
While some CFOs may hesitate to make changes or introduce automation in advance of an ERP upgrade, these are important elements of the cloud journey as it’s important to address inefficient processes before making the transition. There are many actions you can take and tools you can adopt now in advance of the upgrade.
Standardization of processes is also a critical aspect of getting the full value of your new cloud-based ERP system. This was a particularly significant issue for the many CFOs we interviewed in the federal public sector. As they prepare to move to the cloud in the near future, adopting consistent processes both within and across departments is a very big opportunity to free up capacity.
The good news about transforming processes is that you can start anywhere and still realize significant benefits. We’ve seen many examples of how finance teams can generate quick wins by taking a tactical approach of addressing their immediate challenges and fixing one process at a time.
To make the most of the opportunities, CFOs need to link any tactical changes they make to their overall strategy and transformative vision for the finance function. For teams that are ready to take further steps towards streamlining and automating processes but are overwhelmed by the pace of change, we encourage you to think big and act small. In other words, make sure you consider the big picture while also focusing on smaller, incremental actions that align to a transformation roadmap that builds over time.