The following is a contributed article from John O'Rourke, vice president of OneStream. Opinions expressed are author's own.
The pandemic has shown the importance of having your finance and accounting functions on the cloud so your teams can work uninterrupted while operating remotely. Keeping your employees connected to key systems — and each other — is not just a convenience but a necessity today.
But even a virtually connected finance team can face efficiency challenges if your applications are fragmented.
Think about the steep learning curve someone faces if they're asked to step in for other team members or business partners over the next few months. If you have different processes for the financial close and consolidation, account reconciliations, and planning and reporting, that’s three or more systems the person has to master with little time to do it.
And that's hardly a hypothetical situation. Given the challenges of working remotely — household disruptions, connectivity issues — there’s a strong likelihood you'll need to have someone step in while stay-at-home mandates are in effect.
What's more, having a unified finance platform can help while team members are remote by providing them common access to actuals, budgets and forecast data. That helps streamline reporting and planning. It also ensures your team is working from the same data. Having a single source of truth can accelerate the close cycle, support agile planning, and improve accuracy and productivity. These capabilities are helpful in normal times; in times of disruption, they're crucial.
There are other reasons a unified finance and accounting platform is important given the business disruption we’re facing today. One is planning.
Unforeseeable challenges require your finance team to take a different approach to your regular planning process.
The ability to monitor revenue, costs and cash flow on a weekly and even daily basis can help the leadership team make critical decisions. If this process is rigid, slow and arduous during normal business times, generating actionable insights will be especially difficult during a crisis. Finance teams should ensure they have near real-time access to corporate as well as line-of-business data with views into financial and operating results by geography, division, department, location or any other criteria that’s needed to guide the business. Having that kind of access enables them to anticipate the unexpected so they can model best-case, worst-case and other scenarios.
Continued advancements in predictive analytics and machine learning are helping finance teams gain a clearer picture on what could lie ahead once pandemic risks are reduced and stay-at-home mandates are lifted.
Even so, the most advanced predictive analytics likely won’t spot the next black swan event like COVID-19. But a good system will enable your team to forecast with confidence using sophisticated statistical models that use historical trends as the starting point for analyses. Finance teams can then adjust baseline predictive forecasts with known business changes such as new customers, plant shutdowns, and new acquisitions. Machine Learning can take forecasting to the next level with algorithms that learn over time. When you add data visualization tools to that, your team can quickly spot trends, drill into the details and uncover new insights.
One Fortune 500 food and beverage company we worked with was at great risk of being impacted by COVID-19. But they were able to use their cloud-based corporate performance management (CPM) platform, along with graphical dashboards, to move beyond the month-end close and reporting process and are now loading and analyzing sales volume and working capital data on a daily basis.
As a result, the CFO and finance team are able to view seven, 14, 21 and 28-day trends vs. the prior year so they can spot trends, update their forecasts and make better, faster decisions. This is crucial for success today, because your analyses must be updated as quickly as possible so you can adjust products and services as demand shifts during the pandemic.
Automation as strategic enabler
Many organizations are embracing process automation to reduce costs, increase accuracy, streamline processes and free up finance teams to focus on more value-added activities. That adds value under normal conditions but during a crisis it can also help ensure business continuity. That's because it's especially good at replacing tedious and time-consuming tasks such as data collection and validation, transaction matching or account reconciliations. Because in a crisis, you’ll want your team adding as much value as possible by focusing on solutions and problem-solving rather than basic data collection and tasks better left to algorithms and software.
Beyond the crisis, automation frees up finance teams to spend more time on strategic tasks such as analysis, planning and forecasting.
Xylem, a leading global water technology company, replaced six legacy applications for financial close, consolidation, reporting and planning with a modern CPM platform. With a unified, cloud-based finance platform the finance team automated many manual tasks related to the financial close process and they’re collecting more detailed operational metrics along with the financial results. This has freed up the finance team to spend more time analyzing rather than updating data, providing the ability to respond quickly to changing business needs.
Bottom line: Technology is playing an increasingly central role in helping organizations increase agility in good times and manage through business disruption. As the pandemic demonstrates, we must expect the unexpected, and that means planning for it. Cloud-based finance platforms should unify and streamline multiple processes and provide the connectivity and agility needed to handle even the most challenging situations. That way, your technology becomes a strategic advantage that can help your company survive and even thrive through a crisis.
Disclaimer: OneStream is an advertiser on CFO Dive. The company has no influence over CFO Dive's coverage.