It’s no longer about number crunching and ensuring that the company’s books are in order. Today the global CFO’s role is a lot more varied, challenging and demanding. He is often viewed as an ‘architect of the organization’s future’ and is expected to create simplicity from complexities in the business environment. Complexities in terms of:
Most CFO surveys and roundtable discussions reveal that driven by the multi-level challenges in the macro environment, the CFO’s agenda in the current business environment is focused on achieving the following goals:
As the CFO’s Finance and Accounting (F&A) organization strives to achieve evolving business goals, technology enablement and automation become imperative, to an extent that no CFO’s office can operate efficiently without some form of automation or technology enablement. The F&A organization that deals with the value-based representation of business processes and is tasked with planning, controlling and checking the value flow in an enterprise, relies largely on the ERP system.
Most CFOs round the world, work with at least one form of the ERP system, the investment for which runs into millions of dollars. The proliferation of ERP within large as well as mid-sized enterprises has been phenomenal in the past two decades. The book Management Accounting in Enterprise Resource Planning Systems by Severin Grabski, Stewart Leech, Alan Sangster, states that about 90% of large organizations have implemented ERP systems. Given the hefty investments, the cost associated in re-alignment of business processes, and re-training of employees, CFOs obviously look at getting the most out of their ERP systems. CFO expectations from ERP and IT applications range between the following:
However, despite the utility value of ERP, increasing business demands and constant maturity in processes and systems have exposed certain inherent limitations of the ERP system in addressing end-to-end process automation.
The standard and modular nature of ERP systems leads to challenges when it comes to addressing business needs which are not part of the standard ERP module. Instances include managing multiple purchase scenarios apart from the in-built standard purchase module and tax accounting. Also, ERP systems do not have capabilities to automate manual processes of the cash flow cycle such as Accounts Payables and Accounts Receivables. While ERP is great for exercising control and ensuring integration, it may not have the ability to manage new and emerging business needs.
As a business process management partner for many global CFOs, we at WNS have seen two scenarios emerge out of this limitation:
While the first option causes inefficiencies, loss of productivity and in many cases audit and control issues, the second translates into key benefits in the form of reducing workload and operating costs, enabling vendor self-service, auto reconciliations and automated reports, optimizing production processes, eliminating human errors and ensuring better compliance.
According to Gartner, “F&A BPO PETS are supplements to a client’s existing ERP suite and suite of suppliers. Some are 'off-the-shelf' applications and some are 'home built' applications in the F&A BPO providers offering. The options for F&A BPO architectures will increase dramatically in the next five years with the growth of cloud technologies, especially software as a service, and business process as a service, which will increase the choice for using multiple PETS in an F&A BPO relationship.
…are the true catalysts or enablers of productivity, efficiency and cost-reduction. A close look at the CFO’s expectations reveals that PETS play a crucial role in achieving the productivity, efficiency and cost-reduction objectives of the CFO.
We at WNS carried out a study recently where we found that by deploying PETS productivity, cost-reduction and efficiency can be improved by up to 30% and when PETS is integrated with the Process Maturity Model, the enhancement improves to about 55%. WNS uses the Process Maturity Model to business processes from their current state of affairs to higher levels of maturity, thereby enhancing the impact created by PETS.
Join the conversation
Finance and Accounting
29 December 2021
28 December 2021
01 December 2021