Escaping the Transaction Time Trap

marketing-board-strategyAsk any finance leader how much time their people spend on transaction processing and the answer will be “Too much!” Regardless of organizational size, a recent APQC survey shows that about half of finance teams’ time is spent on transaction processing.

In the last 15 years, more than 50% of Fortune 500 companies have been gobbled up by competitors, gone out of business or simply vanished. The cause? Digital disruption. The “Fourth Industrial Revolution,” characterized by new technology and digital connectivity, is upon us.

Executives and managers understand that in today’s rapidly changing world, excellence is not defined by the throughput of transactions. Keeping pace with change and deliver on outcomes are at the top of everyone’s list. In short, the finance department needs to be faster and more accurate in predicting threats and opportunities. They need more time spent on decision support and analysis.

The Feast or Famine of F&A

Yet, the feast-or-famine cycle of F&A continues to negatively impact an organization’s ability to get the most out of their teams. Highly skilled talent is often underutilized during non-peak times. (It’s not uncommon to see well-paid FP&A analysts performing many manual tasks and rekeying in data.) And, when the quarterly peaks hit, they are often overworked and heading toward burnout.

The staff follows processes and practices that have been in place for years. While these processes may not be “broken,” there are new approaches that can be employed. A recent whitepaper from Blackline predicts that while only 25% of F&A talent is spending time on analysis in 2016, by 2020 that figure will rise to 75%.

Automate for a Productivity Boost

It’s a matter of unleashing the chains of manual accounting work that consumes so much time currently. When mid-market as well as Fortune 500 companies can automate many of their current manual processes, it puts more thinking time — as well as time for creativity and innovation — into the hands of their people.

Automation reduces costly errors caused by overworked staff members and labor-intensive work like rekeying data. Digital technology, workflow tools and smart automation, also enforces a move away from paper-based administrative tasks that show F&A processes to a snail’s pace.

Digital technologies, when combined in tandem with process transformation, have the possibility of automating much of the transactional work that F&A talent are paid to perform. Isn’t it time you got more from your people?

To find out how Sutherland can work with your teams to bring smart automation and better processes to your organization, we’d be happy to advise you and offer an expert assessment of your current practices.

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Duke CFO Survey Reveals Optimistic Outlook

money-forecastingAccording to the latest Duke CFO Global Business Outlook, U.S. finance executives are more confident about economic growth than they have been in over a dozen years. The U.S. Optimism Index jumped to 69 (on a 100-point scale), the highest it’s been in 14 years, and much higher than the survey’s long-run average of 60.

In a written statement, John Graham, a finance professor at Duke’s Fuqua School of Business and director of the survey, said: “The jump in business optimism is leading to strong hiring and spending plans for 2017. Our analysis of past forecasts shows that the Optimism Index is an accurate predictor of GDP growth and employment over the next year.”

Indeed, 61% of U.S. firms surveyed plan to boost their payrolls this year, with an average increase of roughly 3%. As well, among American CFOs at both public and private firms:

  • 8% plan to increase capital spending, up from 1.4% last quarter
  • 3% plan to increase technology spending
  • 0% expect to increase R&D spending, up from 0.9% last quarter
  • 5% anticipate a rise in full-time employment
  • 9% expect increases in wages and salaries
  • 1% anticipate an increase in revenue, up from 4.4% in both previous quarters

Continue reading

Why F&A Can Be Your Organization’s Secret Weapon

What do you think of when you think of the F&A department? People issuing invoices, reconciling journals or creating a monthly financial statement? Yes, it’s that, but F&A has the potential to be a lot more.

One of the current trends in office design is to create open spaces of cross-functional teams. Designers are looking to see how the physical workplace can be a better partner to employees by fostering collaboration, teamwork, new ideas and new ways of working. They are looking to draw from all areas of the company in order to drive strategy and find new opportunities.

A Big-Picture View

In many ways the F&A department can be seen as an analogy to this same concept. How? Finance gathers financial and non-financial data from all disparate departments and lines of business—from operations, marketing, HR, R&D, etc. As a repository of information, finance is in the unique position of having a window to every aspect of the company.

The finance organization can therefore be a powerful agent of organizational change. It can leverage the information that it collects to assist executives and business managers to optimize processes, achieve goals, avert problems, and make decisions. In short, F&A can be a valuable partner to other departments in the company. Continue reading

On Home Turf: Sourcing Trends

Photo: Via Wikipedia

Photo: Via Wikipedia

A potent combination of new technologies combined with rising costs in traditionally lower-cost locations and a move toward domestic protectionism has had a direct — and positive — impact on onshore sourcing. That’s the word from a recent Everest post.

Everest points out that traditional service models grew by only 0.1 percent last year, while IT and business process services that were rooted in digital offerings are growing at a rate of 18 percent a year.

Digital Offerings

This echoes a sentiment throughout the analyst community. Horses for Sources has written extensively on the need to tap into a global resource to achieve desired outcomes, and notes that with the rise of digital and as-a-service offerings services become location-neutral. Location becomes a side issue as factors like access to automation, process transformation and alignment with digital business models/outcomes move to the forefront.

As automation becomes the great equalizer, F&A onshore locations are appealing for several reasons. There are a few key reasons: Firstly, there’s a desire for closer proximity to facilitate real-time communication and management; secondly, as business process delivery maturity continues to grow, companies are sourcing more complex tasks and need skilled talent; and lastly, the much discussed new technologies that can drive down costs once gained through labor savings.

The Skill Factor

Talent can be a key consideration. Companies want to ensure that the F&A talent working on their account have the skills and understanding of their industry and organization. The F&A market is maturing and with that maturity comes a need for higher value work, from treasury services to forecasting, planning and analysis. Due to the sensitive nature of this work, as well as compliance issues, companies may want to keep these functions onshore.

In a report from May 2015, Everest reviewed domestic US-based delivery locations, and the south has a clear advantage. By shifting work away from a Tier 1 city, like New York, to a lower cost Tier 2 or Tier 3 city, companies can cut costs anywhere between 15% and 30%, while still drawing a highly skilled human resources.

Locations like our Deloitte-heritage F&A Controllership & Management Center in Tulsa, OK, are optimal for highly complex end-to-end F&A work.  For example, our Tulsa location features a depth of talent, including CPAs, MBAs and Six Sigma experts amongst its staff members.

Located in the Central time makes it highly convenient for real-time communications from both the east and west coasts—and helps companies avoid extensive travel times (and costs) for site visits.

More importantly, our consistent delivery practices, policies and strong internal control structure gave clients the stringent, accurate financial, investor and tax reporting they are looking for.

To learn more about how Sutherland can help improve your F&A function, and to arrange an assessment of your current practices and processes with one of our finance experts, schedule an appointment today.

 

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Transform or Be Left Behind

You’ve no doubt heard the famous Tom Goodwin quote, or a riff on it:

“Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.”

It seems that every company wants to be “the Uber of X [insert industry here].” These digital disruptors are today’s cool kids, to be copied and envied.

Yet, for many enterprise-level—often highly traditional—global organizations laden with various levels of bureaucracy and clinging to entrenched operating models and processes, achieving this goal is a near impossibility.

Traditional (think insurance companies, banks, mortgage firms, etc.) businesses are placing customer experience and transformation high on their strategic agenda. However, they seem to be at a distinct disadvantage when compared to newer, highly nimble, technology-based competitors. If they fail to innovate and evolve, there is the risk of being left behind, as their market share is stolen out from underneath them. Continue reading

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

New Webinar: Excellence is in Order (to Cash)

600px-shutterstock_169847765Finance is in a state of flux. Processes that once served F&A have become outdated. If businesses want to keep up, they need to leverage new technologies and new transformative processes wherever possible.

Today’s CFO understands the need to focus on big-picture strategy and to continually reassess and revamp operations. For that reason, most CFOs list achieving finance operations excellence as a top goal for 2017.

The time has come to embrace data-driven finance by putting Big Data, analytics and robotic process automation to use. Leveraging these tools, in conjunction with rethinking end-to-end processes can help to optimize revenue, reduce risk and drive cash flow.

Discover how to free up your staff to focus on strategic thinking and higher-level outcomes.

Webinar: Data-Driven Finance for Achieving Excellence in Order-to-Cash Operations

On Thursday, February 9, 2017, join Sutherland’s Jon Sunthimer, Vice-President, Finance Transformation Practice, for the webinar Data-Driven Finance for Achieving Excellence in Order-to-Cash Operations. Continue reading

Location Strategy: Do You Know What You Don’t Know?

For finance professionals, it might be surprising to learn that the three hardest words in business don’t involve terms like “KPIs,” “reconciliation” or even “regulatory.” In fact, for most F&A leaders, the hardest words to grapple with are, “I don’t know.”

No one likes to admit they don’t know the answer to something. It can signal vulnerability or a lack of authority. But the best leaders are open to different perspectives and willing to benefit from others’ experience. It’s essential that they have the confidence to look elsewhere for answers when they can’t provide them on their own, because eventually, even the savviest of CFOs will need input from someone else.

So the question is this: What issues or challenges have you thinking, if not saying, those three big words?

Location, Location, Location

If you’re like many businesses evaluating or looking to increase your global footprint, you might be asking yourself: “Do I have the right resources in the right locations around the world?”

It’s a fair question. As branch offices continue to expand, business functions like Accounts Payable or Accounts Receivable are grouped together across a few key hub locations to reduce costs. And although companies need to be wary of the costs of setting up shop in metropolitan cities, there is the danger of moving so far out that skilled F&A labor becomes scarce or is unwilling to commute. Continue reading

The Weekly Roundup: Financial Predictions in an Unpredictable World

F&A weekly roundupChange is afoot. From new standards within finance, to economic and political turmoil across the globe – not to mention digital transformation – accounting professionals face a steady stream of challenges. Yet finance leaders must find a way to move forward during these unstable times; if they don’t, they risk falling far behind the competition. For this week’s roundup, Sutherland’s Editorial Team presents a selection of articles that explore some of the issues and try to predict what F&A can expect in the coming months. Enjoy the reading! (Feel free to tweet us or follow us @Sutherland_iBPO to continue the conversation.)

Robot Revolution? Fear Not, F&A

David Autor, Ford Professor of Economics and associate head of the MIT Department of Economics, recently gave a TED Talk about how technological advancement impacts employment. This AccountingWEB article outlines key takeaways from the research paper that informed Autor’s talk, and explores how they will apply to F&A. One of the main messages is this: Accountants won’t be replaced; they don’t need to fear a hostile robotic takeover. Continue reading

Cash Management Not Managed Well Enough?

rising costsIs your company debt going up even though cash on hand is stable? You’re not alone. A recent study by The Hackett Group brought to light some serious challenges in cash management. The study followed 1,000 US-based companies and noted that the cash conversion cycle (CCC) performance declined by 2.4 days, or 7%, from the prior year. The 35.5-day CCC average is now higher than it’s been at any time since 2008.

But averages can hide bigger issues. Consider this: Median companies are seven times slower at turning capital into cash than leaders. Cash is collected more two weeks slower than top performers: 43.5 days (median) vs 25.1 days (leaders). When it comes to paying suppliers the median group shelled out two weeks faster at 41.1 days as opposed to 59.4 days for leaders.

The study says that, by not following the best practices of leaders, this middling group left a whopping $1.07 trillion on the table. Continue reading