Automating Finance Processes: The 3 Key Organizational Factors

Whether reaching better decisions more quickly, displaying greater flexibility in difficult situations or securing greater efficiency: there are plenty of arguments in favour of automating processes within Finance departments. However, the right organisational prerequisites must first be met for the transformation to succeed.

Finance teams bear a great deal of responsibility in tough economic times. They analyse data, develop cost-saving strategies, manage cash flow and optimise resources. But if they don’t have access to the right systems, processes or data, they simply won’t be able to get a proper grip on the situation. Outdated systems and manual processes have a negative impact on both efficiency and quality. This is compounded even further in economically tense situations, where there is clearly no margin for bad decisions. Trusting your gut feeling is a dangerous game, while experience and data from better economic times often serve to muddy the overall picture.

Yet some companies use times of uncertainty for vital upgrades and development. They make a virtue out of a necessity and take the opportunity to automate processes within their Finance department. Their goal is to increase efficiency and create a working environment in which employees can focus on the important tasks.

The Automation Gap

In automation projects, the expectations and end results are often far apart. This is referred to as the automation gap.

FSN (The Finance Forum) investigated this phenomenon and determined that almost half of all initiatives fail to increase efficiency at the respective company.

So why is this? One reason is that the organisation at the companies simply doesn’t support the change. The teams are poorly managed and fail to focus on the key issues.

The organisational prerequisites for automation

There are three key pillars that must be in place for automation to succeed in Finance departments.

1. The automation leader

Successful projects have managers that seek to consistently drive them forward. This is no different in Finance departments.

An Automation Leader with the right skills and priorities therefore needs to sit at the helm of any organisation, making sure no opportunities to automate, improve or optimise processes are ever ignored.

  • They ensure that the company’s capital expenditure is always distributed correctly, and that automation is established in key areas.
  • They work meticulously on both documenting and standardising processes, as well as remaining open to trends and new technologies such as artificial intelligence and machine learning.

The role of the automation leader is more important than ever in tough economic times. Ever increasing competitive pressure and the availability of new technologies make automating processes in the Finance department a necessity.

2. The focus on improving processes

When a process is inefficient, simply eliminating the human component won’t help. The process will remain inefficient, even if automated. This is the main reason why automation projects either fail or do not deliver the anticipated efficiency gains. An organisation must therefore be willing to improve its processes.

  • Automation for its own sake will not deliver any added value.
  • The companies that enjoy success are those that first seek to optimise processes at the operational level and only then turn their attention to automation.

3. The willingness to accept cultural change

Automation is about far more than just new systems and automated processes. In fact, it requires working in a completely new way. It therefore comes as no surprise that automation initiatives are often met with rejection, while also fuelling fears among staff of losing their job.

Indeed, a survey conducted by Harvard Business Review revealed that 63 % of managers consider cultural issues to be the greatest obstacle when implementing digitalisation projects.

  • The survey also identified the factors that have an impact on cultural change. These include cooperation, transparency, adaptability, inclusion and community, which can all be described as human factors.
  • Employees wish to feel both involved and understood. Hierarchies, constant monitoring and rigorous top-down management all serve to unsettle and frustrate them.
  • Management must learn to both coach staff and listen to them.
  • Transparent and open communication promotes inclusion of the teams and helps prevent demotivation.

Many companies therefore choose to hire a Digital Transformation Officer (DTO). Possessing the required skills, this key role ensures that departments, teams and managers all pull together as one unit. The DTO establishes an environment in which making mistakes, freely voicing criticism and submitting suggestions are all permitted. In the ideal scenario, teams are formed which independently expedite digitalisation and automation of their processes and in which a new culture of change develops.

5 key factors for successful automation

1. Strategy

Digitalisation always serves strategic objectives. This is to improve efficiency or effectiveness. As such, it’s important to provide sufficient scope for the digital transformation and to anchor it in the minds of the workforce. You can achieve this by creating a digitalisation strategy at management level. It’s vital to ensure that everyone has understood the strategy and helps implement it.

2. Commitment to digitalisation

Without the genuine will to implement a digital transformation, most projects simply remain “a nice idea”. To counteract this, management must actively drive the process forwards and play an active part in shaping the new digital identity. Professional project management, target agreements with those responsible and ensuring that the employees have the requisite skills are the means used here.

3. Resources

Digital transformation requires time and resources. As such, it’s vital to make sure that you have adequate amounts of both.

4. Expertise

Without the necessary knowledge, digitalisation projects will quickly flounder. You should therefore focus on getting the right talent at your company and ensuring that the workforce has the necessary knowledge and skills. Also check whether you need a Digital Transformation Officer (DTO). The best approach is to create a culture of innovation and instil an atmosphere of change.

5. Systems, technology and data

In many cases, digitalisation and automation are accompanied by modernisation of the IT structure. If the systems and tools are outdated or unsuitable and the data is all locked away in so-called silos, an upgrade is simply unavoidable. It’s important to adopt a rigorous approach when replacing outdated and unsuitable systems. Invest in tools that are quick and easy to implement and protect your already limited IT resources. Don't forget to create an ideal database. The best ERP and CRM systems are only ever as good as the data that you process in them.