15 | Wealth & Finance, Wealth & Asset Management Awards 2024 May22030 Bridging The Gap: The Importance of Bringing Finance Closer To Business Operations By Stefano Maifreni, founder and COO Eggcelerate In today’s data-driven business landscape, making informed decisions is crucial for achieving measurable goals and driving business growth. However, a staggering 49% of CFOs lack timely and accurate data to fuel real-time, data-driven decision-making, while 73% of finance professionals struggle with a lack of in-depth business analytics and key performance indicators. Bridging this gap between finance and operations teams through digital transformation and technology can provide comprehensive historical data, reporting tools, and actionable insights to support strategic business decisions and facilitate better alignment with overarching business goals and strategy. This integration offers a data-driven approach to drive informed decision-making processes across the organisation. Traditional Challenges and Limitations Traditionally, finance teams have faced several challenges and limitations in aligning with business operations, hindering data-driven decisionmaking and strategic planning. Here are some key hurdles: Legacy Systems and Siloed Data 1. Legacy systems and the high cost of transitioning to new infrastructure pose significant barriers to digital transformation 2. Organisations often adopt a ‘best-of-breed’ approach, using multiple specialised applications for finance functions, leading to data silos that need to be integrated for efficient reporting and analysis 3. Fragmented integrations between the core ERP system and satellite applications make it challenging for integration developers to maintain the complex web of integrations Compliance and Security Concerns 1. Ensuring data security and privacy as financial data becomes more and more digitised is a critical challenge 2. Meeting security and compliance requirements, such as diverse and complex tax regulations across multiple countries, adds significant complexity Process Inefficiencies 1. Standard finance processes like handling expenses, payroll, accounts payable/receivable, and budgeting can be inefficient, leading to time waste, errors, and lack of visibility 2. Manual, time-intensive processes are often required to gather financial information, hindering real-time decision-making 3. Business processes often require exceptions and flexibility when working with external customers, partners, and vendors, introducing complexity in processes like Accounts Receivable and delaying payments and revenue recognition Talent and Resource Management 1. Talent recruitment and retention, supply chain issues, and complex employee benefits management are key challenges faced by CFOs and finance leaders 2. Determining the right amount and type of debt to take on without jeopardising financial stability requires a review of loan terms, asset management, and robust cash flow monitoring These traditional challenges highlight the need for digital transformation and integration between finance and operations to enable data-driven decision-making, strategic planning, and forecasting. Bridging the Gap Through Digital Transformation Digital transformation is reshaping the financial landscape through innovations like automation, cloud-based collaboration, advanced data analytics, and artificial intelligence. Automation helps boost productivity and reduce human error by automating tedious tasks and complex processes. Cloud-based collaboration enables secure, centralised data storage and real-time collaboration across finance and other departments. Advanced data analytics provide insights into financial performance, opportunities, trends, and risks to support data-driven decision-making. Artificial intelligence analyses large amounts of data to detect patterns and mitigate financial risks. Increased Efficiency and Productivity Integrating financial processes with operational systems leads to significant efficiency gains and productivity boosts. Integrated systems ensure everyone works with the same accurate data, reducing errors from manual data transfers. Financial Performance Management (FPM) solutions can directly pull data from source systems, flagging discrepancies. This integration saves time by reducing manual data entry and consolidation tasks, allowing finance teams to meet reporting deadlines efficiently. Holistic View for Strategic Decision-Making • Integrated systems allow for planning across the P&L, balance sheet, and cash flow statements, providing a holistic business view. • By allowing users to drill down to the transaction level, integrated systems help answer management questions and enable better strategic decision-making. • Integrated data provides a comprehensive view of business performance, enabling informed strategic decisions. • Automated financial statements and analytical tools unlock new performance insights for strategic planning. Improved Financial Management and Control • Integration enhances the realisation of contracted savings through integrated procurement and finance operations. • It enables better vendor management, supplier relationships, and improved sourcing savings and cost control. • Accurate and timely financial reporting becomes more easily achievable with integrated systems. • Integrated systems foster better cash flow management and strategic decision-making. • Organisations can establish centralised procurement and finance functions with standardised workflows. • Robust budgeting and forecasting processes can be implemented with integrated systems. By embracing digital transformation and integrating finance with operations, organisations can realise strategic benefits such as increased efficiency, productivity, and collaboration, more strategic, data-driven decision-making, and positioning themselves for sustained growth and success in the evolving financial landscape.
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