Intelligent Enterprise in Finance

Intelligent Enterprise in Finance: How Can CFOs Ace the High Risk, High Return Game?

As disruption threatens business norms, financial leaders and CFOs recognize the need to transform finance into a proactive, forward-looking function. They understand the increasing importance of utilizing real-time insights to guide financial processes such as accounts payable and receivable, tax, and financial planning and analysis. Their perspective on the future has made them the bastions of change. A research report shows that around 81 percent of CFOs are seeking new opportunities to generate business value whereas 77 percent believe that steering an enterprise-wide transformation is their cross to bear. In either case, it’s clear that the role of CFOs is transforming. They are leading the intelligence push. 

But, the larger issue is—how can they transform their enterprises to achieve insight-driven gains? What should be their plan of action to harness the power of business intelligence? What considerations must be taken to pave the way ahead? The article to follow sheds light on these critical aspects and more. 

Three Imperatives to Embrace Intelligence for CFOs

Leading in the age of intelligence is the new formula for success, and acceptance of this new formula is important for business survival. With that in mind, a majority of CFOs have started investing in the innovation of data and are planning to drive an insight-driven transformation to win a competitive edge in the following areas: 

a. Process Efficiency

Business intelligence can accelerate speed-to-value and increase operational efficiency by automating labor-intensive tasks. Advanced analytics and Artificial Intelligence (AI) can be instrumental in revealing the trapped data value to simulate financial outcomes and augment decision-making. Machine Learning (ML) algorithms can help CFOs to swiftly analyze and summarize commercial documents that would have previously required a large investment of time and effort. Not to mention, cognitive assistants can help customer-facing employees to solve queries, improving turnaround times and generating cost savings. 

b. Customer Experience

The relentless pressure of meeting customer expectations is one of the many reasons why financial enterprises are considering an intelligent transformation. AI systems can provide insights into customer attributes and leverage this mission-critical information to help organizations create better engagement strategies. These new-age systems are a drastic improvement over legacy platforms, which are based on siloed data and hinder in-the-moment customer responsiveness. In addition, CFOs have uncovered the potential to utilize external data to create more useful and competitively priced products. 

c. Risk and Compliance

Financial enterprises are the custodians of valuable financial assets, which is why their need for robust risk controls is paramount. AI can help organizations build a resilient business environment where risks can be proactively managed and controlled. Cognitive fraud detection systems can learn customer attributes throughout the engagement lifecycle and reveal patterns that suggest fraudulent behavior. Curating intelligence from data, these systems can facilitate automatic event monitoring and incident response on behalf of decision-makers, thereby averting risks. Increasingly abled ML algorithms can learn and improve with time to detect more complex fraud. They may even be able to determine how an attack occurred in the first place and provide a solution to disarm the threat.

Driving the Intelligence Movement - Key Considerations for CFOs 

Once CFOs realize the benefits of embracing intelligence, they must provide strategic leadership to advocate and spearhead the transformation within their organizations. They need to nurture the notion of change and develop a coherent strategy to galvanize it by looking into the following considerations: 

a. The Ownership

Driving the march towards an intelligent finance enterprise is a prerogative of the CFO. He shouldn’t rely on someone else to lead the charge and must advocate the vision of the future himself. While it’s true that the birth of the intelligent finance enterprise is technology-driven, it’s no less a fact that there is nobody as motivated as a CFO to prepare and push the people for change. 

b. The Conviction

Transformation favors conviction and enthusiasm, rather than skill. A CFO must take the plunge, make a case for the intelligent enterprise, and sow trust in employees to follow in his footsteps. This can come in the form of exercises, which can help employees put things in perspective. Start with helping them envision what their work would be in a world steered by intelligence. And on the contrary, what they stand to lose if constrained to legacy systems. 

c. The Culture of Innovation

As employees began to embrace the vision of an intelligent enterprise, CFOs should encourage them to think outside-the-box and visualize improvements in their regular jobs. He must foster a culture of learning and help employees extend the application of ideas beyond the realms of their own job functions. This culture of innovation can produce startling results in terms of employee productivity, work optimism, and growth mindset, which together can help drive the elements of intelligence across the enterprise.

The Alpha Approach to Business Intelligence

The attempt to create an intelligent enterprise using a cookie-cutter approach is doomed to fail. Therefore, CFOs need to develop a robust approach to move forward and accelerate change. 

  • Define a Vision: Begin by envisioning a future-focused on clear business goals and then start to develop a plan;
  • Build a Roadmap: Prepare a plan of action, emphasizing the predefined targets, outcomes, business models, processes, and workforce strategies, to create and scale the foundation of an insight-driven transformation;
  • Get a Grip on Digital Capabilities: Leverage new-age technologies, including IoT and process automation, and get adept at using them;
  • Achieve Cross-Industry and Functional Expertise: A critical imperative for leading and scaling the transformation in the right direction; 
  • Create a Relevant Solution: Deliver a fit-to-purpose solution that meets the financial functions and leads to tangible outcomes;

The Challenges Impeding the Change

CFOs are uniquely positioned to guide enterprises through their transition to business intelligence. However, the problem is—why are they slow in channelizing their efforts, or why do they drop the ball so often, for that matter? 

A survey revealed that a majority of CFOs find it challenging to adapt because of a rapidly changing business environment and the ever-changing financial forecasts. They struggle to convert their awareness into actionable strategies and can’t benefit from the opportunities available. Another challenge remains the alignment of business functions with overall strategic goals. Since most financial services companies are burdened by processes, systems, and people, CFOs face the difficult task of bringing multiple lines of business operations towards a common objective. 

It’s necessary for CFOs to help their organizations embrace the challenge of intelligent transformation. They must proactively seek measures to dismantle silos and spark a new approach to cross-functional collaboration, data sharing, and decision-making in order to win in the new era of intelligence.