By Andrew Hayden, Senior Product Marketing Manager, Winshuttle
When it comes to transforming finance through the implementation of shared service centres (SSCs), increased use of automation tops the list of key focus areas for many finance directors and CFOs. Certainly, that’s what research by Thomson Reuters and SSON – the Shared Services and Outsourcing Network – suggests. In their survey, 74% said automation was a key focus, compared to the next most prevalent factor, analytics, being prioritised by just 47%.
Considering this, why have few finance teams grasped the importance of automation? According to our own research at Winshuttle, 75% of businesses that have adopted shared services, predominantly for finance, have still to realise the full benefits of automating their manual administrative processes.
We interviewed 100 senior managers of enterprise SSCs in the UK and Ireland. 98% told us they saw considerable value in ‘intelligent automation’ in their back office, however, only 34% have so far gone live with automation to help them be more efficient.
What we commonly find in these situations is that organisations take the first big leap to back-office efficiency by merging disparate finance teams into one shared service. Then they put the brakes on. Their consolidation of finance functions creates some degree of efficiency, such as reducing the use of different finance systems or avoiding multiple teams doing the same job. However, these SSCs are often just repeating existing inefficient processes, simply in one location rather than many!
This is only the tip of the iceberg from an efficiency perspective. Realising true ROI from shared services requires a ‘phase two’ – introducing process reengineering to the newly consolidated function to make it as efficient and effective as possible. While this may not have been a priority for many organisations up to now, Covid-19 has changed the world, and with it, the need for organisations to be as financially lean as possible, for the foreseeable future. On top of this is the fact that many finance workers are now working remotely, adding to the need for improved technology and automation to enable these functions to continue effective operations.
The Bank of England has warned that unemployment will double because of Covid-19 and the UK economy is expected to shrink by 14%, triggering the deepest recession for 300 years. Roughly a fifth of workers have been furloughed and many of those who are working remotely are keen to continue doing so in the future once the Covid-19 crisis is over.
For finance teams and shared services functions this means every ‘dial and gauge’ will need to be adjusted and checked for efficiency. Up to the minute financial visibility will be even more crucial. But organisations will need to walk a tightrope. If they just cut back, they will shrivel. While they’re doing everything to achieve efficiency, they must also find more ways of moving forwards. This can be achieved by businesses bringing artificial intelligence into the business whilst also unlocking the invaluable human intelligence they have at their disposal. Brains must be used for knowledge, not for repeat processes. AI, Robotic Process Automation (RPA), and automation platforms must be used to tighten any slack in essential, common processes.
In my view, Covid-19 will be the shock many large corporate finance organisations need to truly embrace intelligent automation. They’ll be forced to look at how they can make their processes super-efficient.
The analyst firm Gartner supports this view with its theory on hyperautomation. “Hyperautomation refers to an approach in which organisations rapidly identify and automate as many business processes as possible. It involves the use of a combination of technology tools, including but not limited to machine learning, packaged software and automation tools to deliver work.”
While RPA tools have been on the market for some time, Gartner references a current “renaissance” led by the development of new and more sophisticated technology offerings and “zeal for operational intelligence”. It states that, “by 2024, organisations will lower operational costs by 30% by combining hyperautomation technologies with redesigned operational processes.”
A major part of this automation picture for corporate finance teams involves the processes surrounding, and reliant on, the core ERP or finance systems, such as SAP. Many of these enterprise applications require a lot of manual, repetitive work, that can drain morale, lower productivity, and introduce data errors. RPA done correctly ‘takes the robot out of the human,’ saving thousands of hours each year and enabling people to work on higher-value tasks and make a real impact on the business. For example, time savings for some companies, recorded through Winshuttle’s SAP automation solution, include:
- 95% on entering vendor invoices
- 83% on changing purchase information requests
- 98% on entering general ledger account documents
- 97% on customer credit management changes
What’s key to success with process automation is choosing the correct tools for the job. As indicated by Gartner’s ‘combination of technologies’ message, RPA is not simply a case of adopting one enterprise-wide, ‘generalist’ RPA platform for use in all cases of process improvement. This might be part of the solution, but for RPA related to specialist functions and systems like SAP and finance, dedicated, flexible software platforms designed for purpose, reduces the burden on the organisation to program the system into doing what it wants it to.
Organisations have craved greater efficiency for many years now, but in areas such as finance shared services there is still lots to do. Focused automation solutions offer many of the answers, and Covid-19 in my view is an added, if unfortunate, pressure point that will convince many finance teams to finally make the leap.