The speed of evolution of technology has combined with unprecedented cultural and social phenomena since the pandemic and transformed the way in which companies operate. As companies face increasing pressure to deliver on their goals while managing limited resources, automating business processes has become essential to help drive efficiency and productivity. This article will explore the benefits of automating processes within the finance function, examine hallmarks of a successful implementation, provide practical examples of how automation can positively impact a company’s operations and note some considerations for instituting sound data governance.
The Need for Automation in Finance Departments
All finance departments face challenges in achieving their goals such as attracting and retaining skilled finance professionals, balancing the competing priorities of day-to-day tasks and long-term planning and strategy setting, and maintaining the accuracy and integrity of finance results while trying to shorten the close cycle for reporting. These challenges and an ever-changing technological landscape have made it more important than ever for companies to embrace automation to help streamline operations and improve utilization of resources.
Automation can provide numerous benefits to any company, including:
- Cost savings: Automating manual processes can help organizations reduce labor costs and reallocate resources to other critical tasks. Similarly, individuals may be redeployed and upskilled to put their talents and abilities to higher use for reviewing and analysis with the results of the automation processes.
- Improved efficiency: Automation allows accounting departments to process information faster and more accurately, helping reduce the time spent on repetitive tasks and enabling employees to focus on more strategic activities.
- Enhanced data quality: Automated systems can help reduce errors and improve data accuracy, leading to better decision making and more informed strategies. Eliminating manipulation of data, import/exports and overuse of excel, brings uniformity and consistency to the inputs that yields more reliable related outputs.
- Greater scalability: Automation can help companies handle increased workloads without a corresponding increase in staff or resources, allowing for more efficient growth. As volume of transactions increases, consistency of application of procedures without increased time for processing, also allows the company to respond to growth—both anticipated and unplanned—in a way that allows for comparability and reliability.
- Increased transparency: Automated systems can provide real-time insights and reporting, helping make it easier for companies to track progress and demonstrate their impact to owners and board members. Shortening the time-horizon for information, creates greater agility to respond to what product lines should be optimized or eliminated, what costs are escalating or what other trends should be addressed to maximize cash flow management and drive executive decision-making.
Hallmarks of Successful Automation Implementation & Practical Tips
When embarking on a digital transformation journey, companies should consider the following factors to help successfully transition to automated processes:
Alignment of automation strategic objectives. Focus on automation projects that directly support the organization’s goals, companies can confirm that they are investing their resources wisely and making strategic choices that will have a lasting impact. Decision makers must involve various stakeholders, including staff members, customers, and board members, in identifying the most relevant areas for automation within the company.
Making the most of limited resources. Companies should prioritize automation initiatives that could have the greatest impact. Thoroughly analyzing their workflows and processes, isolating pain points or bottlenecks in service delivery, will help identify those areas with potential for the highest return on investment.
Managing the costs associated with new technologies and tools. To strike the right balance between cost and value, companies should evaluate the long-term benefits of automation in terms of time and resources saved versus the potential for improved service and product delivery for tangible benefits to the company and its stakeholders.
Obtaining buy-in and commitment of the entire company. To foster this sense of ownership, companies should involve all relevant stakeholders in the planning and implementation of automation initiatives, helping everyone understand the project’s goals and expected outcomes. This inclusive approach can help create a culture of collaboration and continuous improvement within the company and build trust and rapport among team members.
Developing a detailed change management strategy. Implementing new technologies and automated processes can disrupt a company, making effective change management essential.
Instituting a change management strategy that includes elements such as clear communication, training and support for staff members, and a plan for addressing any potential resistance to change within the company, will establish accountability throughout the organization, create transparency and offer opportunities for feedback .
Measure success and adjust as needed. Companies should establish key performance indicators (KPIs) to measure the impact of their efforts. By regularly monitoring these KPIs and evaluating the results, companies can identify areas for improvement and make any necessary adjustments to their automation projects.
Considerations for Sound Data Governance
The use of automation brings benefits of time savings to staff which can be redeployed for upskilling, maximizing collaboration efforts between teams and systems, enhanced accuracy and transparency of data. However, overreliance on technology without establishing controls around data quality management and other governance components, can expose a company to risk of inaccuracies, faulty trend analyses, or flawed KPIs and metrics.
A few items to note when instituting a Data Governance policy:
- Data Cleaning: Ensure that data utilized is regularly scrubbed for duplications, errors and other anomalies which can skew performance of the AI on which automation tools can rely.
- Data Validation: Validate information utilized for predictive and trend analyses [such as GL coding for invoices] to determine that it is up-to-date and applicable for the purposes for which it is being used.
- Data Governance: Policies and procedures for managing data, controlling access to it, who has ownership over maintenance and quality should be documented and available.
- Data Integration: Data from multiple sources and platforms must be accurate when consolidated and seamlessly integrated together.
Implementing strong governance policies and procedures around data quality management is essential to complement a company’s automation strategy.
Automation offers finance leadership a powerful way to help improve efficiency, reduce costs, and enhance service delivery. By carefully considering their organization’s unique needs and objectives, finance and executive leaders can strategically implement automation initiatives that help drive meaningful change and support mission-critical functionality. As well, being mindful of the challenges to maintaining sound data quality and putting guardrails in place, provides for an environment of strong data governance. Following the practical steps outlined in this article can help companies successfully navigate the digital transformation process and harness the power of automation in an impactful and reliable way.
