CFOs have never had it harder. They’re pressured to cut costs, increase revenue and forecast more accurately. Meanwhile, they face the continuing need to deal with economic uncertainty, regulation and scrutiny from investors.
It’s little wonder that, according to research from recruiter Robert Half, three out of four CFOs say their stress levels will increase over the next two years.
It’s also probably why, as Deloitte suggests, CFO turnover is on the rise. CFOs relish the strategic role their office plays in decision-making.
But their workload means they can risk burning out. Working nights, weekends and reduces their workplace efficiency and can be bad for one’s health. That’s why advances in artificial intelligence (AI) are so welcome; promising as they do a means for CFOs to manage their increasing workloads.
In fact, spending on cognitive and AI in this region will grow a five-year CAGR of 69.8% to US$5.0 billion in 2021, according to IDC. CFOs in particular are looking to AI to free them up to provide forward guidance to the business, by automating routine transaction processing, eliminating manual tasks and reducing the likelihood of errors.
The CFO ‘toolkit’
The benefits of AI are compelling. First, the technology enables transformational automation, freeing employees from mundane and repetitive tasks. Virtual agents, for example, can simulate financial tasks such as account reconciliation and compliance and operate them on a 24/7 basis; increasing productivity for the department.
Second, AI can reveal new and predictive insights. AI allows CFOs to ask not only ‘what happened?’, but also ‘what would happen if?’, allowing them to make better long-term decisions. What’s more, AI systems improve the efficiency of decision making by providing information in human terms through Natural Language Processing.
Despite all the benefits that AI brings with it, the key to making it effective is through data
Third, AI can help CFOs improve business outcomes. For instance, AI tools can reveal how CFOs can leverage excess cash for early payment discounts, or they can improve supply selection through AI analytics. One example of this concept in practice is when AI can enhance ERP apps so they can monitor supplier invoices for those that offer early discount payment and flag these opportunities, so finance teams can better prioritise payments.
Building tomorrow’s finance in the cloud today
AI apps, almost by definition, need to be connected to the enterprise through the cloud.
This is because the cloud is the best way to cost-effectively build data lakes that provide the raw fuel for machine learning and AI-derived insights. AI and machine learning embedded within cloud applications specifically, are at the cutting edge of providing business benefit through end-to-end solutions.
By connecting internal data, third-party data, open data and unstructured data in the cloud, along with relevant enterprise apps such as human capital management, sales and marketing, organisations can create a data source that’s second to none.
Intelligent algorithms can then analyse this data for hidden insights and present these insights, along with recommendations on the next best action, to CFOs; helping them make the right decisions for the business. This gives businesses the agility to be both responsive and predictive.
This approach improves over time. Every occasion a CFO uses their expertise to accept or change a recommendation made by the AI, the machine learns from that decision and incorporates it into future analysis.
In this way, the AI and CFO work together for the smartest and most efficient outcomes.
Avoiding the siloed data trap
By breaking down organisational silos through cloud computing, and then deploying AI applications, CFOs can accelerate workflow by creating a more cohesive, responsive and predictive organisation.
By discerning long-term patterns in data, AI apps can then provide unprecedented insights into what the future may hold and how likely future scenarios might affect performance and growth. This is important in an era where uncertainty is the new normal.
Ultimately, enterprises will future-proof their business and capitalize continuous innovation in enterprise applications.
Across APAC, full-scale AI implementations are gathering pace, and many organisations are preparing the way by moving their ERP systems to the cloud.
If you use different point systems and have a bolt-on integration approach, your environment will stay fragmented and your AI projects will suffer
In Singapore, a country well-known for innovation, RedMart is leading the way.
The e-commerce platform allows customers to buy groceries and household products, including fresh and frozen food, personal care, health and wellness, baby, and beverage, and pet products online. The company was keen to continue its rapid growth trajectory and identified business agility as a key enabler.
RedMart was looking for a solution that could provide accurate and complete financial book-keeping, deeper insights for decision-making and more efficient internal operations across all aspects of the organisation.
Working with Oracle, the company brought all its financial, supplier management and procurement capabilities together on one platform.
Oracle Enterprise Resource Planning (ERP) Cloud allows RedMart to collaborate with suppliers over a common platform.
This gives RedMart the ability to cut down the amount of time for financial book-keeping into less than half, and further reduce costs in the long term through better, more efficient negotiation and compliance processes.
Be prepared for the data challenge from AI
Despite all the benefits that AI brings with it, the key to making it effective is through data.
In other words, without a good data strategy, the effectiveness of AI will be compromised.
As such, a robust data management strategy is essential in ensuring that data obtained is reliable.
Cloud ERP paves the way for AI embedded in ERP, with the potential to inform board-level strategy
To address this, businesses should adopt a connected platform approach. If your company is using different point systems and have a bolt-on integration approach, your environment will stay fragmented and your AI projects will suffer.
By adopting a platform perspective, companies can create a strong, scalable foundation for innovation and deliver a superior customer experience.
Internal communication between CFOs and CIOs is key
Further to this, there is without a doubt that every IT project is created with the finance line of business in mind.
CFOs have to work with their CIO counterparts to incorporate AI into business intelligence models that are coupled with an overarching data management strategy.
To communicate this, a centralized identity and access management system helps to strengthen adoption of AI and build secure infrastructure.
As such, a standardized system builds efficiency and smoother communication between CFO and CIO teams.
Finance leaders also need to have a clear understanding of what drives their business, and collaborate closely with CIOs to discern the most suitable data sets to support their objectives. No matter which focus area AI is applied to, producing and implementing models to maintain an elevated level of performance is crucial in supporting the digital transformation of a business.
The Success of AI
Cloud ERP paves the way for AI embedded in ERP, with the potential to inform board-level strategy.
AI will help finance departments shift from filling out paperwork to focusing on business strategy and decisions.
The trajectory of this shows incredible potential, with IDC predicting that global spending on cognitive and AI solutions will grow 54.4 per cent per year through 2020.
AI will do this not by replacing humans, but by empowering them: taking on boring tasks and freeing employees for the more rewarding and strategic work.
In achieving this, CFOs will need to apply rigour to ensure that data quality and processes are up to scratch. If they succeed, they will find they’re able to meet their new responsibilities with ease.
About the Author
Raen Lim is the Head of Applications at Oracle Singapore, responsible for bringing innovation and success to customers in the local market through Oracle’s complete applications Cloud offerings. She is a passionate cloud evangelist and has more than 15 years of industry experience in technology sales, market and business development, as well as channel recruitment and enablement. Prior to joining Oracle, Lim had spent six years with Salesforce growing the ASEAN business. She was with Symantec before joining Salesforce.