How tech can support, and drive, the finance function
King Price CFO Paul Stedall believes that technology can take the finance function to the next level.
We live in an era where our organisations have become technology and data companies that just happen to provide some other services as well. Cloud technologies, machine learning, chatbots, AI and data analytics are having a massive impact on the way we make decisions, develop strategies and run our businesses every day.
And yet, I recently had to watch my finance team, qualified CAs and accountants, spend hours of their time looking through boxes of documents to answer an audit query that dated back to the formation of the company. It just brought home to me once more how important technology is, not just to support the finance function, but also to take it to the next level.
In our case, what’s needed as a starting point is a relatively simple digital document management strategy, which would allow people to instantly call up an invoice, the payment linked to it, and records of bank remittances. It wouldn’t just be an auditor’s dream, it would also have a massive impact on our finance team’s productivity.
Technology has been having a profound effect on the insurance industry for some years now. Thanks to data-driven insights, the ability of insurers to determine risk is evolving to a point of near-perfection. This essentially results in more accurate and fair premiums – which means that lower-risk clients will pay less for their cover.
Technology is also bringing about sea-changes in the customer experience, with data-driven technologies like AI, apps and chatbots driving a range of digital-first, human-friendly services that are tailored to the exact needs of our clients. Now we need to ensure that technology plays a similarly transformative role in the finance function.
One technology that’s already making a difference is process automation, which is basically programming software to perform some of the basic tasks that make up a huge amount of the day-to-day work for traditional finance teams. The key here is to take the opportunity to review your processes, and rework them where necessary, instead of simply automating old, redundant processes.
The big benefit is that this not only frees up finance staff to do higher-value work and be more customer-focused, but also makes their jobs more enriching by taking away the tedious work. Happy staff means a better finance function.
We’re also seeing a boom in the use of AI and machine learning in the finance world, both of which build on the ability of process automation to liberate finance professionals from low-value work. This is where we start building true digital intelligence into a finance function – but as with all technology, it’s not just a matter of installing some technology and pressing the ‘on’ button. You need the analytical skills that are necessary to interrogate data effectively, and this is where assembling the right finance team is critical.
Ultimately, the big differentiator for finance departments will be how they use analytics effectively. For me, the CFOs who use analytics effectively to combine finance data with other data will understand market trends better and be better placed to play a more strategic role within their business. Strong analytics enables strong decision-making. It helps you see issues and potential problems before they arrive, and plan accordingly. It drives a more strategic view of the business goals and solutions.
But there’s no one-size-fits-all approach to technology. What you implement depends on your specific business goals and challenges. We don’t always know where the tech journey will take us, and what our function will look like five or 10 years from now. What we do know is that whatever the tech looks like, it will always look better than rifling through dusty old storage boxes looking for long-lost invoices.