Although no one can predict the future, it feels like we are in a golden age of digital transformation. Everything is changing, from phone apps to cashless commerce and artificial intelligence to process automation and digital transformation.
This is true for both businesses and finance organizations. Based on research by StrategicCFO360, and SAP 71% of CFOs participated in the study believe that they are ahead of the curve when it comes to openness to technology changes, while only 5% think that they are behind. Their role in corporate technology decisions has grown significantly over the past 12 months, with 64% of them claiming that their influence is growing.
The concept of modern financial management systems
Finance teams have discussions about technology adoption guided by a more refined managerial view than traditional financial disclosures. They now encompass multiple dimensions such as profitability, cost centers and customer engagement.
They can then help other business lines embrace change, share their lessons learned and advocate for a future-oriented approach to digital transformation. This line of thinking is already being considered by CFOs, according to research data from StrategicCFO360.
Three quarters of CFOs believe that automation of manual and resource-intensive tasks and cloud technology are the key elements of modern finance systems. Over half of respondents believe that workflow automation (68%) or predictive analytics (54%) have the greatest potential to enable the most value-added uses cases.
These technologies open the door to shared services centers, which standardize company processes and have capabilities that support automated receivables, payables, proactive cash management, and fraud detection.
This transformation is powerful for both the finance function and the rest of your business. However, the most preferred technology enablement is still having one source of data for all financial transactions and analysis processes – even more than the cloud or automation. StrategicCFO360 and SAP found that 81% of the top-earning companies generate more than US$1billion in annual revenue, and 50% of those with less than $10m in annual revenues prioritize this area in their digital strategies.
This includes technology adoption. Resistance to change is a common problem in corporations, particularly when it comes to technology projects. Finance teams can help other units of their organization embrace change by connecting dots that show how each member of the team is positively impacted and the business outcomes.
Managing Change through a Digital Lens
Unanticipated risks and opportunities can be addressed quickly by organizations that are able to pivot quickly. It is possible to establish new business models quickly and with less financial consequences. Even organizations can restructure themselves to reflect the way people work together, whether they are in person or remote. However, it is important to not neglect the responsibilities required to maintain business services, customer expectations and partner requirements.
Finance teams can be active business partners by developing complex financial operations and supporting growth strategies. They can reconcile millions of transactions and several thousand records daily across multiple business units, geographies, systems, and provide real-time reporting as well as advanced analytics. This allows business users to evaluate the financial implications of their decisions and allow them to expand the business and pursue new opportunities with greater strategic and less risk.
How sustainable supply chains can boost resilience
The ongoing war in Ukraine could be the last straw, even if the pandemic was a black swan event that rattled global supply chains.
Unrest has meant that only a fraction of Ukraine’s 6 million tonnes per month of agricommodities (pre-war) is reaching countries in the Middle East and Asia. Inflation worries have increased as oil prices and adjustments to tanker and air cargo routes have led to an increase in energy prices. According to the International Monetary Fundy (IMF), this could range between 5.7% and 8.7% for advanced and emerging economies. Add to this the fact that supply chains generate more than 50% of global carbon emissions and the outcome has the industries grappling to limit global warming Supply-demand imbalances have been exacerbated by the shocks of the past two years. As organizations try to adapt, seize opportunities and change their business model, the importance of resilience and sustainability in supply chain has been reaffirmed.
Roadblocks to Resilience
A resilient supply chain is one that can withstand disruptions in its supply chain, and recover quickly if necessary. A sustainable supply chain includes ethical and environmentally responsible practices.
Research has shown that companies can increase their output by as much as 25%, and have a shorter product development cycle. A sustainable supply chain also offers greater control over costs, brand loyalty, and reputation. It is a top priority for most organizations to have resilience and sustainability in their supply chain network.
However, they face many roadblocks that prevent them from making the change.
Recent study found that 63% of organizations had a formal plan for sustainability, but only 35% had invested in data-capture technology. This could impact decision-making about sustainability. Only 23% of respondents had sustainability plans. This could lead to non-compliance.
Many organizations also lack supply chain planning. This can cause problems with transit-tracking, reduce operational visibility, create inventory blind spots, and limit supplier diversification. However, digital systems can make sense of big data to help build a diverse network of suppliers and partners.
Unified Digital Platforms to Streamlined Operations
Digitization allows organizations to transact, adapt and collaborate in real time with all their trading partners. One platform that unifies all points – suppliers, logistics providers and asset operators – gives unparalleled visibility to all levels in an organization’s supply chain.
All transactions are connected through one network. A thorough analysis of the data allows for identification of trends and tracking Key Performance Indicators (KPIs). This also allows benchmarking against industry standards. Organizations will be able identify risks and opportunities within their supply chains. This allows stakeholders to identify risks and opportunities in their supply chains, as well as taking measures to reduce the carbon footprint.
A platform that digitally unites a large network of organizations, facilitates collaboration between them, and helps to build resilience, can be used for everything, from procuring raw materials and supplies to purchasing equipment and service providers.
Vestas is a Danish provider of sustainable energy. They have struggled to automate manual labor due to siloed systems for procuring their goods. Now, they can communicate and share data with one, single, user-friendly procurement platform. Collaboration across business lines resulted in a reduction of time for supply chain planning, logistics and planning. They saw a 7X drop in parked and blocked invoices, and their suppliers adhered with their sustainability code of behavior.
Kennametal a supplier for industrial materials and tooling, also sought to lower the overall cost of its procurement operations. The company was able to increase supplier collaboration and achieve 50% year-over-year savings in its sourcing function.
Eliminating Silos With Agile and Connected Systems
Complex challenges are a constant challenge in today’s business world. These roadblocks make supply chains essential to a company’s differentiation strategy, and revenue growth plans.
Companies are now striving to reduce silos in their supply chains and be more agile. Greater visibility with logistics providers and contract manufacturers, as well as other global business partners, fosters multi-enterprise transparency, encourages process orchestration, and aids decision making.
Incorporating sustainability into business processes is a great way to achieve organizational goals. There is now a greater reliance on business networks throughout the supply chain process.
A cloud-powered, unified business network platform can be a valuable digital asset that allows trading partners to collaborate across the supply-chain. A better understanding of all aspects of the supply chain is crucial to building a sustainable and resilient supply chain. This includes monitoring and supplier discovery, as well as traceability, compliance with carbon footprints, and building an ethical supply base.