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Roadmap to become a Digital CFO

Finance function has been constantly evolving. From being a bean counter, it has become the guardian of the shareholder value and a trusted advisor.


As the guardian of the shareholder value, it is important the function considers the impact of the happening Digital revolution on the finance function. The digital revolution is toppling leaders at a pace never seen in history.  Hence, it is critical the CFO understand the Digital revolution and what it mean for the finance function.


Digitalization is often understood in a very narrow sense as the automation of the business operation or moving away from using physical documents to digital documents. While this is correct, the Digital revolution is a much bigger exercise.


Gartner defines Digitalization as "the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business".

What does this mean for the finance function?

The change in business models will require the finance function to build, evaluate and guide enterprises in decision-making.  Failure to do so, will mean non-performance of the most critical function of the CFO i.e. safe guarding the shareholder value. Numerous surveys have also repeatedly called out the CFO as a major decision maker in IT investments and in big number of cases the CFO has direct responsibility of the IT function. This further strengthens the case for the CFO to understand and probably push the enterprises into the digital revolution. The digital leaders will not be able to able to increase increased revenue and margins, it will also lead to a significant reduction in cost. An Oracle-FERF survey put the cost saving as 20% of the cost base.

While the CFO office gets involved in pushing for the Digital revolution and advising on the new business models it is also necessary for the 'Finance' function to be flexible and innovative is using the digital age knowledge to reach the next level of maturity.

 What is digital finance?

 To assess the current level we should look at the four attributes of the a 'Digital Finance' function

Leverage of Cloud - Strategically leverage cloud to modernize finance

  1. Leverage of Mobility - Leverage mobility to automate, speed the processes and provide real time data

  2. Leverage of Data age Big and Analytics - to improve business decisions, be able to present diagnostic, predictive and prescriptive insights.

  3. Leverage of Internet of Things, Social Media - to deliver real-time information using mobile devices and social media.

How to reach the Aspired Digital Levels?

The Process:

The 'Infosys Digital Finance Capability- Maturity Model' -helps an enterprise to assess the current 'Digital level' of its finance function. The assessment is done for the various processes within the finance function like Payables, Receivables, General Ledger etc. Next, based on the enterprise business environment the target levels will be set by the business with recommendations from Infosys. Enterprises may take a step-by-step approach to move from one level to another to ease the change management, budget availability, criticality and other business realities. Infosys will also help the enterprise set the new KPI to track the progress and assess the performance of the digitized function.



The Solution:

The Oracle Cloud set of solutions along with Infosys Nia solution provides numerous options to build the Digital enterprise. These solutions can be deployed on cloud.  Infosys will also help the enterprises build other solution levering the 'Infosys Digital' expertise to build solutions not covered by Oracle Cloud or Infosys Nia solutions.

Oracle Cloud:

Modern cloud applications from Oracle help you speed your digitization journey. These applications are integrated with social, mobile and possess analytic capabilities to help you deliver enhanced customer experiences.

Below are some of the Out-of-the-Box solutions offered by Oracle cloud, to speed up the Digital journey

Oracle Financial Consolidation and Close Cloud - built to optimize the close. Financial Consolidation and Close Cloud is designed to help minimize risk, provide transparency to the process, and accuracy to the results. Provide real-time insight and access to data with interactive process and financial dashboards.

  • Oracle Analytics Cloud delivers business analytics for traditional data and big data across the entire enterprise.

  • Account Reconciliation Cloud - helps management and improvement of global account reconciliation.

  • Accounting Hub Reporting Cloud - improves reporting by providing multi-dimensional and analytical capabilities.

  • Use Financial Reporting Compliance Cloud Service to optimize controls within and outside your financial processes using an integrated solution as part of your Oracle ERP Cloud deployment.

Infosys Nia:

Nia is a knowledge-based AI platform. It brings machine learning together with the deep knowledge of an organization to drive automation and innovation.

Nia does Data Collection from different integrated sources by using the information platform (IIP) and relaying it for further analysis. Nia then utilizes the  'Knowledge platform' (IKP) of Nia to analyze the data and detect anomalies. Next, the Automation platform (IAP) of Nia is used for 'Automated strategy' update, Automating fixing of the upstream processes. Nia also provides numerous dashboard to view real time data showing views across regions in real time with predictive and prescriptive analytics.

Below is the how Nia solution works for business case , where the enterprise wants to improve the DSO by automatically updating the collection strategy based on statistical, text and econometric analysis of the data fed from the various application like - Cloud ERP, Credit agencies like D&B, financial information providers like Bloomberg and third party applications.



Nia provides similar solution for other finance pain-points. Below is the current set of Nia finance solutions.


S Num

Nia Solution

1

Improving DSO by reducing propensity to default

2

Eliminating disputes through dynamic systemic controls model

3

Increase First Pass Match % & Exception Invoice Management

4

Re-imagining T & E process for World-Class Performance

5

T & E - Fraudulent Claim Detection Management

6

General Ledger & FPnA -  Acceleration of Close process

7

General Ledger & FPnA- Improving  Effectiveness of Balance Sheet Account Reconciliations (BSAR)

8

General Ledger & FPnA- Reducing market risk by real time monitoring of foreign exchange


Conclusion:

Where do you see your organization in terms of Digital maturity of the finance function? In our discussions with the finance leaders, the finance related digital work does not seem a priority item. Moreover, many CFO's also feel with the automation of the operation tasks and creation of shared services, the finance functions are now fully matured with no scope for drastic improvement.  There is also a reluctance to move decision-making tasks to machine intelligence. The CFO needs to overcome these inhibitions is using the new technologies of machine learning, robotics process automation, artificial intelligence. Leveraging the new solutions will make the decisions better, faster and also free-up the bandwidth of some of the always-in-shortage finance staff for more critical analysis needed to explore new lines of business, expand the core business. Thus, helping the CFO in guarding and enhancing the share-holder value.


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