Growth and Optimization
A Quick Win for CIOs in Financial Transformation
In enterprise-size companies, CIOs and their teams align their IT strategies?with their business strategies. At times, lending a hand to the business to help prioritize initiatives is essential. In the past, decisions around digital transformation often took a backseat to other initiatives.?However, the pandemic propelled the need to make digital improvements, largely due to the workforce moving remote. Employees needed access to programs and data to do their jobs, but that in turn exposed organizations to more security risks than ever before. Many organizations made the decision to move from archaic systems to emerging technologies, such as cloud, artificial intelligence (AI), and machine learning (ML) to combat these risks.
How CIOs can help digitally transform finance departments
A newly appointed CIO at a utility company helped lead the charge to modernize the organization’s travel and expense systems under its company-wide initiative to go digital. He referred to it as a “quick win” since it made a positive difference for all employees, deployed rapidly, and the transition didn’t bog down IT resources. This successful rollout opened the door to lead finance down the path to explore more complex digital transformation projects in the cloud that they had initially resisted.
Advancement in technologies, such as capturing receipts with embedded machine learning and human verification, have recently taken place so it may be worthwhile to check with finance to ensure the business is providing these options for its employees.
a strong partnership between IT and finance leaders enables the organization to remain agile in the face of unforeseen challenges.
CIOs need to ask their teams:?“How can we help drive initiatives with finance, such as?reducing?employee spend?(paying with company credit cards, non-PO spend), to help the company meet its cost savings goals??And "What’s the cost of doing nothing?"
The following are three questions every CIO should ask their teams if they want a “quick win” in advancing the digital transformation in finance:
1. Is the organization’s current expense solution unnecessarily using IT resources or outdated technology?
Some companies today are still using modules from on-premises software since it came free with an ERP system or a home-grown system. However, maintaining and supporting these systems can drain IT resources or rack up costs from system integrators, especially when much of the workforce has shifted to remote work environments. An found that roughly 80% of today’s AP managers' time is spent on lower-level financial tasks, such as invoice matching, purchase requisition, and vendor management – all tasks that have the potential to be automated.
Ask your team these questions:?
- Is there a backlog of enhancement requests or report creation requests from the users that cannot be addressed in a reasonable amount of time?
- Has the vendor of the technology announced an “end of life” strategy for the product? Or is the product in “maintenance only” mode?
ERP providers have their eye on innovating in other areas of finance functionality and not investing in the expense module. Hence, companies that turn a blind eye and continue on this path aren’t benefiting from the innovations being developed; a positive end-user experience, integrating travel data to give a company an end-to-end view of spend, or accessing near, real-time data with insightful, visual reports.
2.?Is the organization favoring solutions that increase the end-user experience?
Organizations are realizing the importance of putting employees first – especially as demographics of their workforce are changing. According to an EIU study,44% of US respondents listed “Increase employee productivity and satisfaction” in their top 3 strategic priorities for the next few years. The shift to remote work has created new expectations for how and when work gets done, and the tools businesses need to use. And it’s not just millennials—all generations are now accustomed to, and expect simple, easy-to-use experiences at work.
A Forrester research report found that “In the US, travel and expense software is considered the most important tool for enabling good employee experience.” Highly rated apps and approving expenses on the go are necessary in today’s workforce, rather than completing expenses using a spreadsheet. The easier these processes are for employees, the more likely they will follow organizational protocols, budgets, and safety measures.
Companies with the most engaged employees , experience half the employee turnover of their peers, and have a decisive competitive advantage.
3. Is the organization capturing all employee spend data in one place? ?
An? revealed 53% of respondents currently manage different types of spending with separate applications. Without one platform to capture and aggregate all employee spend, companies risk not being compliant with government or industry regulations and increase their chances of fraud.?It takes, on average, 14 months to detect a fraud scheme, according to an . So, when finance and others don’t have control and visibility into the minute details of where and how company dollars are being spent, it becomes more difficult to detect fraud quickly.
While this spend eventually makes its way into the ledger, the ability to proactively monitor, report, and analyze this spend gets lost. For example, employees that book directly with airlines and other travel suppliers create a “leakage” issue that exists in mostly every company. Without reporting this level of information, it’s hard for the organization to understand spikes in costs or where they could potentially optimize spending in the future by negotiating better deals with vendors and suppliers.
Automation can help companies capture this spend without disrupting the employee experience, reconciling it so financial teams can use the data to their advantage when negotiating with suppliers. IT may also be able to couch this initiative within a Big Data project.
about why companies shouldn’t wait to modernize their processes.
