Over the past several years, numerous reports have surfaced about the role of CFOs evolving within organizations. One of their most challenging areas of responsibility is technology, which can seemingly change by the minute as new functionality and capabilities come to market. To that end, organizations should expect to increasingly incorporate technology into core operations. At the center of finance technology is the concept of hyperautomation, which includes everything from ERP to artificial intelligence (AI). A modern CFO must maintain a solid understanding of the latest technologies and how they might be leveraged within the organization.
ERP as the core
Modern ERP solutions enable companies to centralize critical business systems, align operation and finance processes, and streamline workflows. The ability to access and report on real-time data helps business process owners make strategic, informed decisions that can result in substantial cost savings and increased work efficiencies.
Leveraging the full potential of a unified and reliable ERP solution also allows for transparent communication and greater collaboration between an organization’s internal departments and external partners. Because modern ERP solutions are mobile and reside in the secure cloud, with the appropriate security rights, they can be easily accessed and fully utilized from virtually anywhere using any smart device with internet access.
Key attributes of a modern ERP solution
Today’s ERP offerings enable better management of customer and vendor relationships through efficient accounting, tracking and visibility into critical transaction processing, such as cash and request for proposals to pay. ERP solutions also facilitate the seamless integration of external business systems, automating the synchronization of transactions resulting from e-commerce, travel and expense, payroll, billing, paying, third-party logistics, contract manufacturing and other processing areas.
ERP solutions further enable organizations to report on and analyze enterprise-wide data in real-time, which is key to ensuring that business process owners always maintain unobstructed insight into their customer, vendor and third-party transactions. Having the ability to centralize, streamline and automate an organization’s finance and operations processes will help to ensure return on investment.
Key benefits of a modern ERP solution
The modern ERP is offered as a software as a service (SaaS) application, which an increasing number of organizations are moving toward. As CFOs have relied upon cloud-based customer relationship management (CRM) software for many years, they are now more comfortable with moving on-premise legacy finance and operation systems to a SaaS environment in a private cloud, public cloud or mixed-model solution.
Having access to a modern ERP solution from any smart device or tablet has enabled CFOs and business process owners to manage the business from virtually anywhere. Real-time enterprise-wide dashboards, KPIs, metrics and analytics can be accessed to allow the most critical decision-making to take place.
Business process owners can enter or approve sales, purchasing, expense, inventory and financial transactions from the office, warehouse and other remote locations. Documents, data, online notes and attachments can be shared and saved within the ERP system through any mobile device. Mobility has empowered the CFO to oversee operations, make well-informed key decisions, improve efficiencies and be more proactive about leveraging opportunities.
In the past, ERP solutions supported basic processes common to all businesses such as tracking general ledger balances and printing accounts payable checks. Today, myriad solutions exist in the market that address the unique needs of businesses in different industries. For example, modern ERP solutions are able to track the value of byproducts in a manufacturing process or control the disbursement of special purpose funds in a nonprofit organization.
While it can be tempting to select a product from a vendor that focuses only on your industry, there are trade-offs when doing so. For instance, these vendors may not have the resources to continually improve their products as larger ERP vendors such as Oracle, Microsoft, SAP and Sage can. This includes making ongoing functional enhancements to address new compliance requirements such as accounting standards changes and privacy laws, as well as offering platform capabilities such as built-in analytics, robust application programming interfaces and workflow engines.
Larger ERP vendors are also able to provide editions of their products tailored to certain industries, which can be customized with add-on offerings for specific industry sectors and subsectors. If necessary, additional upgradeable company-specific customization can be provided by consulting partner organizations.
As more AI-infused, cloud-based ERP and system functionality becomes available, these opportunities will continue to help CFOs streamline responsibilities.
Standard automation in modern ERP
Standard automation in modern ERP reduces risks to help optimize data integrity and financial controls. Workflow automation is set up in ERP to minimize manual steps in the business process and increase overall efficiencies. For example, an accounts payable workflow process can be configured to help streamline the approval and payment of vendor bills. Overall, the use of standard automation will contribute to reduced human error while requiring less intervention and freeing up resources that can be reallocated to more important business activities.
Emergence of intelligent applications—AI-infused ERP
AI is transforming modern ERP solutions with machine learning and natural language interfaces that help CFOs adopt a more analytical and strategic mindset. The AI-infused ERP systems can leverage existing system functionality as well as provide the opportunity for new capabilities. For instance, machine learning is able to analyze historical sales data against forecast demand to determine planning and procurement of materials. It can also be used to examine customer behavioral data and identify the best customers in which to invest more resources.
Furthermore, this type of solution can be used to automate accounts payable and accounts receivable data-entry functions, thereby reducing time spent on mundane data input tasks. Actionable data insights that enable organizations to improve operational efficiencies can be maximized with AI; and as more AI-infused, cloud-based ERP and system functionality becomes available, these opportunities will continue to help CFOs streamline responsibilities.
Point automation solutions
While modern ERP is a critical foundational item and often the largest software investment for an organization, there are also valuable automation tools that can help optimize finance functions. For companies with a high volume of bills to pay, accounts payable automation tools such as AvidXchange, Bill.com and Concur can improve workflow. These solutions enable firms to process supplier invoices without human intervention by providing a digital workflow to manage steps otherwise handled by a staff member.
The next point solution is procurement automation, which is used to accelerate the procurement process by freeing employees from repetitive and time-intensive tasks. By allowing staff to focus on business-critical activities such as decision-making and strategizing, these solutions are transforming the procure-to-pay process, enhancing efficiency and creating additional value while keeping costs down. Coupa is among the most well-known solutions in the market.
When it comes to financial close and reporting processes, two key solutions are close automation and corporate performance management (CPM). Close automation tools help the financial close process by automating account reconciliations, workflows and reporting. CPM tools assist organizations by automating and optimizing financial planning and analysis (FP&A) functions by designing workflows and inputs to build budgets and forecasts. In addition, both tools can help consolidate multiple ERP systems with monthly financial reporting.
Intelligent automation combines RPA and AI technologies, collectively empowering end-to-end automation of repetitive tasks involving both structured and semi-structured data. While the term AI can conjure up images of computers fully processing as if they were human, that potential scenario is still many years away, even with the advent of quantum computing. Today’s AI is broken down into three main concepts: humanlike engagement, optimizing and insight.
Humanlike engagement includes chatbots, natural language processing (NLP) and computer vision. Chatbots are frequently used to augment sales and support through online channels, while NLP can be used to understand the sentiment in voice and emails. However, the most prevalent concept in finance is computer vision, which can be implemented to make documents such as invoices, point-of-sale and bank statements readable, as well as to pull data for processing within systems.
Optimizing, the second type of AI features intelligent bots and business process management systems that help automate semi-routine and repetitive tasks. The final AI concept, insight, uses advanced algorithms and data history to forecast, classify and find patterns. This type of AI is heavily linked to the field of data science, where quality data is critical. There is also an emerging technology known as AutoML that is helping business users build basic AI models and generate insight faster than ever.
Closely related to AI is RPA, a technology that has grown rapidly over the past few years, despite having been around for more than a decade. Its premise that automation can be completed not only by a developer but by an average business user has captivated the market and catapulted the sector into one of the hottest trends.
Designed to automate high-transaction, highly repetitive tasks such as invoice processing, RPA boasts the ability to build, test and deploy a bot in as few as two-to-four weeks if the use case is simple enough. As bots are being used across organizations and the concept of digital workers is becoming more accepted, RPA is helping to augment the human workforce and elevate individual employee value. However, while vendors may suggest that anyone can build a bot, the reality is that some baseline technical understanding is required.