On CFOs and Digital Transformation

On CFOs and Digital Transformation

3 Min Reads

Emagia Staff

At one time, enterprise CEOs and boards expected their CFOs to manage business financing and financial record keeping, reporting and statutory compliance. In truth, the job varied somewhat depending on the organization. For some, the role of the CFO might include strategizing value-creation with the CEO. But for most, it was about finance, recording, reporting and compliance.

The finance role is a significant undertaking—even if bookkeepers use computers instead of books. Accurate accounting, reporting and compliance is no small task. The CFO also has the critical job of saying, “It’s not in the budget.” Probably more than one CFO has gone by the moniker “Dr. No.”

If such a CFO role was limited, it is changing, and the change is accelerating. The finance role is assumed, but CEOs and boards are looking to CFOs to handle increasing responsibilities. McKinsey has reported that the number of functional areas reporting to the CFO is growing. Areas reporting to the CFO now can include risk management, corporate strategy, investor relations, board engagement, post-merger integration and “digital.”

With expectations increased, CFOs must make finance responsibilities more streamlined and efficient. They need unified, complete information in real time for data-driven decision-making. The only way for this to happen is through digital transformation.

Digital Transformation: True Automation

For CFOs to succeed in the new responsibilities demanded of them requires true automation of financial processes. By true automation, we mean holistic, integrated automation rather than discrete function automation. True automation requires several state-of-the-art technologies working together to manage all functions in a financial process, such as order-to-cash (O2C), procure-to-pay (P2P) or record-to-report (R2R).

Robotic, cognitive, and analytic technologies must operate in a single, big-data environment containing all requisite data. Unification of all data in a process such as O2C is the only way to automate it fully and obtain complete visualizations and reporting, predictions and prescriptions.

These technologies include robotic process automation (RPA), deep learning neural networks, natural language processing, and rule-based expert systems. The combined application of such technologies brings true automation (also called hyper-automation) to the O2C team’s job.

Accounts Receivable Transformation

For accounts receivable, digital technology can execute the bulk of the daily work that AR staff traditionally has done, freeing up staff for problem-solving and other higher value activities. It also scales to handle growth without increases in FTEs.

The new automation provides real-time or near-real-time information that once involved considerable time and effort to assemble. In addition, automated real-time reporting and visualizations replace manually produced reports that were out of date upon completion.

As significantly, AR’s hyper-automation also improves customer experience, perhaps the most vital outcome. CFOs will have more time for expanded responsibilities, along with a complete set of information to support decision-making.

Process Transformation Value

While much of the talk of digital transformation implies complete cultural or organizational transformation, there are other facets, including process, business model, and core business transformation. The question is how to get started.

Process transformation provides an excellent starting point. It is easier to grasp and its execution manifests the new possibilities that digital transformation offers. It creates significant internal value while externally transforming customer experience—the vital component in the competitive marketplace. Success in O2C process transformation provides a foundational understanding and generates new thinking to transform the organization.

Emagia, by way of example, offers an AR/O2C system incorporating RPA, AI and analytics interacting with big data to provide enterprise-wide automation. Management can access real-time visualizations. Customers interact 24/7 with a conversational digital assistant trained in AR skills. Internal teams are relieved of the manual and repetitive tasks to focus on higher-value problem-solving.

Emagia’s system automatically gathers data from disparate sources and formats and interprets both formatted and unformatted documents. It aggregates the data from all regions, systems and sources into one data lake, out of which various functions operate.

Results include:

  • Credit decisions in seconds and minutes instead of weeks
  • The system prioritizes and automates collections supported by the digital assistant
  • Machine learning improves cash application to exceedingly high percentages
  • Customers have any-time, self-service access, receive tailored communication, and pay via any method

Visualizations and reports provide current global and regional stats. Descriptive analytics show up to the minute history; predictive analytics show what’s coming according to a scenario, leading to prescriptive analytics for action.

For CFOs, digital transformation in financial operations will make the enterprise more agile and competitive while providing valuable learning and experience that will carry through the organization’s ongoing transformation.


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