Four big moves finance needs to make right now

Webinar reveals the benefits of automation and other big moves to support business growth.

On 16 February, CFO South Africa hosted a webinar, wherein Oracle senior director and SaaS leader for ECEMEA Swami Natarajan delivered a masterclass on the four big moves finance needs to make to support business growth.

Embracing business model innovation
According to a McKinsey survey of 200 organisations, 90 percent of executives talk about the post-Covid fallout and whether it’s going to fundamentally change the way they do business over the next five years.

“The sales model will change,” said Swami. “There are going to be new product offerings, an influx of competitors and rapid changes in customer expectations and behaviours.”

He referred to Netflix and how they disrupted their industry with digitised content. Forty percent of their content is original to Netflix. Similarly, Siemens launched an IT vision 2020 plan, which involved phasing out the traditional business and focusing on turning industrial manufacturing into a digital services company. They’re expecting a large portion of their income to come from a digital manufacturing initiative.

Swami explained that the best practice for business model innovation is rethinking what the customer wants. “I’m sure at this stage everyone is thinking about what the customer is looking for: organisations are collecting feedback where social listening tools listen to their customer’s voices, there are services companies who are productising their services to be a fixed-based instead of a time-based approach, and manufacturing companies are turning into services-based organisations.”
Another best practice is analysing your business model changes. “When you embark on business model innovation, you need to understand proper scenario planning and have the right tools available to do it. This will help you determine which investments are more likely to provide the business with growth,” said Swami.

He explained that collaboration is also extremely important and that, during the innovation cycle, there are properties that involve stakeholders from design, engineering, marketing, finance, HR and other functions.

Mergers and acquisitions
“When there is a crisis, a lot of people turn that into an opportunity,” Swami said. “We see a lot of mergers and acquisitions happening in the marketplace and across industry segments.”

He explained that customers are using this opportunity to support the business model innovations charity by bringing new players and entering new markets.

One of these examples is Phillips, which is known as a lighting company but refocused on healthcare technology and transformed the technology industry.

“Customers are using strategic modelling tools to help them identify the right organisation during the M&A process, develop financial cultural analysis, calculate capital impacts from M&A activities, identify where they can find cash from, and more,” Swami explained.

He said Oracle has also seen that business process owners are going to be the change management agents in an M&A process. “You have an enterprise-wide business process owner which helps with working in IT solutions and business processes, and then brings in the right amount of focus on these divisions. Having this early visibility of financial data and reporting is extremely important.”

Relentless automation
Swami said that this is the time to focus on code competencies and on becoming a code-driven company with automated processing, especially in the finance world in terms of automated closing and timely credit information on FS publishing.

“Companies are investing in intelligent process automation, which goes beyond the rule-based approach of robotic process automation and incorporates machine learning capabilities,” he explained. “It helps you to automate tasks in the accounting function so finance professionals can move away from mundane tasks to focusing on high-value activities.”

Creating a risk intelligent culture
“How do we ensure that we have brought on security risk audit tools to eliminate not only the manual processing, but also rule-based suppression of duties and audit sampling so that we can enable the audit community to provide the best for the finance organisation?” Swami asked.

He explained that this can be done by creating a risk intelligent culture within the organisation.

“There are multiple areas that we need to be cognisant of when it comes to risk management,” he said. “One, is streamlining and integrating your audit and compliance, and having an enterprise risk management framework for business continuity and planning. So shifting some of the finance and compliance resources to high-value activities is also part of this engagement.”

Next, he said, is using a native integrated risk management solution to engage with the key stakeholders and business process owners. Then, automating the analysis of the application security from the initial design to operating, to certification, and to evolution.

“What is common in all these moves is you need to have one, unified, integrated solution that covers the whole enterprise – from finance, to procurement, to supply chain, to customer experience, to HR management,” Swami said. “Having an end-to-end business process ensures that you are able to focus on the new business model, able to get M&A done very quickly and also able to help the workforce grow as well.”

King’s College and Hospital
King’s College and Hospital is in the process of taking these four steps. ICT director Saurabh Bhatnagar explained that they have automated a lot of integrations between different business solutions.

“We’ve automated back office and bank reconciliation processes, which has allowed us to do better planning and budgeting,” Saurabh explained. “We were even able to understand our consumers better and create the right reports.”

He said that the organisation is still in the process of rolling out some in-house solutions.