The Art & Science of Data-Driven Finance

office-sceneYesterday, Sutherland’s Jon Sunthimer, Vice President, F&A Global Technology Leader, co-hosted a webinar with Veena Gundavelli, the Founder and CEO of Emagia Corporation. The topic? Data-driven finance.

More than ever, finance organizations need to eliminate data silos, turn data into insights (and decisions), and digitalize and automate the Order-to-Cash (O2C) cycle. Finance executives are under increasing pressure to improve performance, with key drivers for finance transformation boiled down to the “4Cs”:

  • Cost
  • Control
  • Compliance
  • Cash flow

After an introduction by Ms. Gundavelli, Mr. Sunthimer pointed out that transformative is imperative. Digital technology isn’t limited to the domain of high-tech companies. Today, every company is a digital company, and those that aren’t have a limited shelf life.

Mr. Sunthimer elaborated on how today’s hot commodity is data. Companies sit on massive amounts of structured and unstructured data, and there is a strong desire to turn that mound into usable, actionable knowledge. Continue reading

If Time Is Money, Where Are Your F&A People Spending It?

office-sceneIt’s Friday, and, dear F&A professional, look around. As F&A offices around the world wind down for the weekend, there’s an uncomfortable truth lurking under that general sense of weekly accomplishment.

In a 2015 assessment of 832 companies’ finance organizations, “How Finance People Spend Their Time,” APQC asked finance leaders how much time they spent on transaction processing, control, decision support, and management activities. The survey revealed, that regardless of company size, approximate half (49%) of the workday is taken up by routine transaction processing.

Lost Time, Lost Human Ingenuity

Over the course of a workweek, that means that from bright and early Monday morning until Wednesday just around lunchtime, your highly paid F&A people are just keeping things ticking along. Paying bills, reconciling accounts, and doing all those other tactical tasks that keeps a company in good standing.

Necessary work, no doubt, but work that does not add value to the company as a whole. What finance professionals and CFOs want to see are for their teams to be focused on initiatives that drive revenue and profitability—initiatives that are aligned with strategy. Continue reading

The Case for Convergence in F&A Transformation

600px-shutterstock_149939726In today’s globalized world, many companies have F&A departments spread throughout a range of geographies, including the Americas, Europe and Asia. Such widespread corporate presence opens the door to markets across the map. But international access presents its share of challenges—especially when it comes to managing cash.

When we’re asked to address client challenges like improving working capital or delivering higher quality, timely reporting, many times one of the first root causes is the “run your own shop” approach to regional and global F&A departments. It’s not uncommon to find each finance function operating its own processes and technologies. As a result, many globalized businesses suffer from significant – and costly – F&A disruptions, needless repetition, undue human error and frequent reporting delays.

The Transformation Essentials

You hear a lot these days about business transformation, in the finance department and throughout any organization. Usually the conversation is in terms of digital transformation. The idea of the F&A function requiring minimal technology is going by the way of the dodo. Business leaders know that automation is key to all areas of success, including the formerly paper-heavy, manual finance function. Continue reading

F&A Forecast: 2017 Predictions and Predilections

processesAs 2016 draws to a close, businesses are peering around the corner in anticipation of what the New Year will bring.

Here, we present our predictions for what 2017 will mean to F&A.

Higher Salaries = Greater Demand for Value

Salaries for accounting and finance positions will continue to rise in 2017. That’s the news according to the Robert Half 2017 Salary Guide. Fueled by an increased demand for skilled professionals, starting salaries will increase in range from 3.0% to 4.3% in 2017, conditional on the position. The 2017 average clocks in at 3.7%, one of the highest in the past decade.

The direct outcome of this will be an increased desire (and demand) to get rid of the redundant work that reduces employee output and doesn’t create any value. Robots (from RPA to cognitive) will help humans do more of the innately human work—the work that requires creativity, abstract thinking or human judgment. Continue reading

2017: What’s Your Email Resolution?

startup-photosAccording to a recent study by McKinsey Global Institute, the average American worker spends 28% of the workweek reading and answering email. The report didn’t specify which departments they polled, but if you ask anyone in the F&A department, many people might respond that they strive for a mere 28%.

For finance professionals, trying to stay on top of email is a losing battle. Just as you read and reply to one, another one (or two) pours in. And the very act of replying can be self-defeating as it inevitably results in a response email, increasing the futility of Inbox Zero.

Another part of the problem is that email is addictive. The anticipation or rush of new emails can trigger a surge of the chemical dopamine, a key player in our information-seeking behavior.

Perhaps even worse, email can dumb us down when it comes to performing our work. Neuroscientist Daniel J Levitin is quoted as saying: “When trying to concentrate on a task, an unread email in your inbox can reduce your effective IQ by 10 points.”

If all this sounds frighteningly familiar in your F&A department, it might be time to consider putting this atop the New Year’s resolution list: Break the email habit. Continue reading

F&A: What Have You Done for Me Lately?

As we head into 2017, and into the fourth generation of business process services, there is little doubt that the F&A market has matured, dropping to six percent in 2015 after double-digit growth three years earlier. This will no doubt influence the year ahead, in both how process services are offered, and what clients are looking for.

With improvements having been achieved from a best-practices approach, location strategy and access to F&A tools, clients are now indicating that cost savings and existing productivity gains are very nice and well, but there is a deep desire for delivering on business outcomes.

Providers as Capacity Catalysts

Organizations are asking providers “what have you done for me lately?’ and are eyeing the ability to add capacity to their business in four strategic ways:

Actionable Intelligence: Some companies, for instance, want to tap into business insights to improve the customer experience, better their market performance or quickly respond to industry trends. There is little doubt, in our experience, that 2017 will see an increase in the application of analytics. Continue reading

The Future of Financial Reporting

reportingCFOs and financial controllers are feeling increasingly vulnerable as they struggle to produce forward-looking insights amidst ever-changing regulatory environment and ever-growing amounts of information.

According to a new report, “How Can Reporting Catch up With an Accelerating World?”, released in October from EY, 66 percent of respondents say the increasing volume and pace of data is significantly impacting the effectiveness of reporting. That’s up from 57 percent in 2015. The annual global report polls 1,000 CFOs or heads of reporting of large organizations across 25 countries.

Increased Complexity

These financial professionals noted that in 2016 the organizational environment intensified in complexity, as organizations added more legal entities, business units and reporting systems. A full 64 percent reported a surge in the number of reports requested by shareholders. Yet the survey goes on to say that reporting teams don’t have access to the technology or tools needed to make sense of —and actionable decisions on— vast oceans of incoming data. Continue reading

The Weekly Roundup: Technically Speaking

F&A weekly roundupTechnology is always in flux, and given its prominent role in F&A, that means the finance function must always be in flex mode. Accountants need to adapt to the cloud while considering its hidden costs. They must juggle robots and automation, and develop a solid understanding of technology while questioning its true benefits. Here, Sutherland presents a selection of articles that explore some of the latest technology issues facing finance. Enjoy the reading! (Feel free to tweet us or follow us @Sutherland_iBPO to continue the conversation.)

Accounting for Tomorrow

Cloudsourced Accounting cofounder Blake Oliver recently attended the first annual CPA Practice Advisor “40 Under 40” ThinkTank Symposium. In this article, he presents his five key takeaways from the event. “Accounting is still about the numbers. But we’re moving beyond compiling and reporting those numbers to offering insights about those numbers.” Continue reading

Top Articles of 2016: Part 1

Throughout the year, Sutherland’s F&A team channels its collective brainpower to present articles that cover a variety of industry-relevant topics. We cover subjects that you need to know about now – areas that influence the way business operates, and issues that can make or break the F&A function.

As the year draws to a close, we thought it might be a good idea to highlight some of the top reads that attracted your attention. Here in Part 1, we present the first five of our top 10 articles from 2016. Discover the topics that resonate the most.

1: Free Your Mind and Your Soul

Still looking at RPA through the lens of improved efficiencies? While that’s not a bad start, perhaps we should start viewing it as an essential tool for human ingenuity. This article makes the case for using automation to get rid of manual processes, enabling people to do what they do best. Continue reading

BPaaS: Follow the Yellow Brick Road

In order to arrive at the ultimate destination of Business Process as a Service (BPaaS) “plug and play” success (“The Emerald City”), it requires an understanding of the journey (“The Yellow Brick Road”) and its potential dangers (“Lions and tigers and bears—oh my!”).

Despite all the drum-banging around digital transformation, recent survey results of business process buyers and providers indicate that most are not ready to embrace the magnitude of the change required to achieve the next level of “plug and play” services.

“I could think of things I never thunk before. 
 And then, I’d sit and think some more.” The Scarecrow

Technology is hyper-dynamic. Almost everything that makes your life easier and more convenient is digital. Less than 20 years ago a cellphone was the size and weight of a brick, certainly not “smart” and out of reach financially for most people. Now we can chat with friends using voice commands, ask Siri or Cortana to look up bits of information we’ve forgotten or even watch movies or listen to podcasts as we sit patiently in airport waiting areas.

As individual humans we can adapt pretty easily to technology and its impact on our lives. However, large corporate enterprises are often still supporting legacy systems dating back to the 70s and 80s struggle to keep up.

Yet, every CIO and senior executive understands that digital technologies, intelligent automation and advanced analytics are the “brains” of the organization, helping to deliver the insights required to stay nimble and competitive.

“I could stay young and chipper 
and I’d lock it with a zipper, 
 if I only had a heart.” The Tin Woodsman

A 2015 study by HfS Research of 178 service buyers shows that “seven-out-of-ten enterprises over $10B in revenues do not expect their core enterprises to be delivered As-a-Service for the next 5 years.” They will, instead, be leaning on traditional labor arbitrage models.

Why? Most likely because process and technology are the heart of any operation, and many companies are not as far along the maturity curve as hoped. To stay “young and chipper” companies need to adopt technology, rethink old ways of doing things and step out of their comfort zone, exploring new possibilities.

HfS has noted, “Worryingly, as the future reality for business operations unravels, new research shows more than two-thirds of today’s enterprises are simply not ready for what’s coming. They’re blissfully unaware that their comfortable world of reactionary operations and legacy status quo is going to get ripped apart.”

As well, in the 2016 SSON survey of 500 Shared Services and Outsourcing practitioners, 79% believe their strategy will deliver dramatic and recognized value beyond cost savings. “Most respondents agree that Process Excellence is driving radical change… while innovations such as RPA and Digital Disruption get lower ratings.”

It would seem that there is still plenty of opportunity to simplify operations and take action against significant process inefficiencies throughout the enterprise. This needs to happen first before real change can take place.

Enter the shiny promised land of the Emerald City of BPaaS (Business Process-as-a-Service), a 5th Gen BPO offering that optimizes processes to help clients reduce capex and opex, helps organizations have greater capacity elasticity and improved time to market.

Two of the (many) key attributes of BPaaS address the heart of every organization’s first step toward “plug and play” success: The need to simplify and standardize.

  • Simplification: Practitioners are hosted and leveraged (1:many) across different clients in a shared service model.
  • Standardization: Services are delivered with standard F&A processes with some configuration (and little or no customization).

However, streamlining and standardizing business functions aren’t the only factors in a successful journey. There is a need to re-visit the fundamental reasons for why such projects fail to deliver the expected result.

“But I could show my prowess, be a lion not a mowess, if I only had the nerve. Oh I’d be in my stride, a king down to the core I would roar the way I’ve never roared before.” The Cowardly Lion

What’s the biggest barrier to change? It’s usually a potent mix of a couple of factors:

  • People’s comfort with the status quo.
  • A lack of understanding of the degree of change required.
  • A breakdown in communication

These can be the true “lions and tigers and bears” that businesses will encounter on their journey. To drive change, organizations need to be courageous. They need to have the nerve and resilience to conceive of, implement and enforce digital and process transformation.

This means getting the right level of executive sponsorship to own and drive the change process. There needs to be an atmosphere of creative willingness to write off legacy technology and processes in favor of simple, less complex options. It means starting with the end in mind and being clear about the business outcomes you want to impact.

As well, it’s essential to communicate intentions and leverage key stakeholders. In our experience with facilitating change for our clients, one place to start is to develop “Vision Champions” by leveraging your in-house experts in the vision, design and communications process. And, then testing for understanding and acceptance.

Companies know and understand this in theory, but the practice of change management is often a lesson in the cold reality of dealing with human resistance to change and unexpected hurdles that arise along the way.

Here at Sutherland, we are not only process leaders, delivering “plug and play” business process services, but our #1 job is helping our clients realize change through F&A transformation. It’s what we do day in, day out.

In my next post I’ll share how we helped a client define the business outcome and then enable technology, process redesign and change management practices to achieve their goal.

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