In the future, is it possible for machines to take over financial management completely?
No. Technology is an important pillar of business competitiveness, but employees remain at the core of business functions and will continue to be so in the future. The human touch is needed to complete tasks such as negotiating with delinquent customers, executing strategic operations, and innovating processes, actions that machines will likely not be able to do in the near future. In today’s increasingly complex financial landscape, companies need to move beyond an automation narrative to an augmented approach to achieve business excellence.
This is the second blog from a three-part series on how finance leaders can transform their teams into a future-ready workforce that can support growing business needs. In the first part, we discussed the roadblocks faced by a distributed workforce. This second part focuses on the various technological solutions that can help overcome these challenges. In the third part, we will analyze how HighRadius’ Autonomous Finance solutions could help your business eliminate these challenges with the power of automation.
Augmented workforce: Putting people first
The shift to a workforce enabled by technological innovations and digital skills is considered to be one of the most effective approaches for organizations to enhance their business capabilities. However, considering the rise of distributed teams across the globe, CFOs are under pressure to set up plans for transforming their workforce. The growing customer base adds to the complexity of the situation. Let’s dive deep into the augmented workforce model to understand how it can cater to the unique needs of distributed teams.
Decipher augmented workforce model
The augmented workforce model utilizes a blend of technology and humans to work on finance functions in order to achieve better outcomes. Advanced technologies such as artificial intelligence (AI) and machine learning (ML) are used to streamline processes and establish efficient digital workflows.
Augmented workforce model for the future of finance: A necessity or an option?
Despite being in the 21st century which boasts of self-driving cars, collectors are busy writing dunning emails. Sounds obsolete, right? In this technology-driven world, sticking to the traditional approach of handling finance operations might lead to long-term losses and competitive disadvantages.
The way work is done is changing due to the rise of advanced technologies. Jobs are being reinvented, creating the ‘augmented workforce,’ and finance leaders need to adapt to this change in order to achieve success.
Evolution of technology for workforce augmentation
In recent years, the finance and accounting sector has seen significant advancements in workforce augmentation technologies to support digital acceleration. Let’s take a look at the significant ones:
- Robotic Process Automation (RPA): Over the past few years, the use of robotic process automation in the financial sector has grown exponentially for driving efficiency and cost-saving. It automates rule-based accounts receivable processes to deliver quick and efficient outcomes. Manual repetitive tasks such as cash posting and dunning can be streamlined in this way. RPA helps finance departments save up to 25,000 hours annually by reducing errors, thus improving productivity and customer experience.
- Machine learning and artificial intelligence (ML & AI): These technologies are used nowadays in many fields in the finance process including financial analysis, risk management, revenue planning, and blockchain implementation in treasury management. ML and AI use data from past interactions to understand customer payment patterns to provide the desired information for building better collection strategies. It predicts payment dates, deduction claims, and customers’ creditworthiness and saves several hours of manual work for the team.
- Big data: In the past few years, big data has led to significant technological innovations that have provided finance & accounting teams with convenient, personalized, and secure solutions. These solutions utilize structured and unstructured data to anticipate customer behavior and create business strategies. Big data tools include dynamic data-driven platforms whose behavior continuously morphs as the underlying domain-specific data changes. Some of the use cases of big data in finance are accurate risk analysis, real-time monitoring of market insights, and fraud detection.
- Hyperautomation: Hyperautomation refers to the mixture of automation technologies that exist to augment and expand human capabilities. It involves the combined use of technologies such as RPA, AI, and ML to automate as many business and finance processes as possible. It helps businesses complete complex workflows with little to no human intervention. Hyperautomation has become the latest accelerator to improve process efficiency, reduce costs, and enhance productivity.
Overcoming the challenges of a distributed workforce using technology
When managing a distributed team, it’s easy for things to go unnoticed. Whether it’s inefficiencies in processes, missed business opportunities, or lack of team collaboration, these overlooked issues can turn into major roadblocks over time. In the previous part, we discussed the challenges of a distributed workforce in detail. Here, we will list the technologies that empower distributed workforces to counter the obstacles.
Challenge: Inability to track productivity
Tracking progress is one of the biggest challenges of a distributed workforce. As the size of the organization increases, the challenge becomes bigger due to the limited visibility into the varied geographies and the huge number of team members that need to be managed.
Solution: Advanced analytics and real-time reporting
Advanced analytics and dynamic reporting provide real-time visibility into process health and productivity across finance operations. It allows access to updated, interactive reports from anywhere and on any device. It also lets CFOs generate customized financial reports covering multiple KPIs to get critical insights into the productivity of distributed teams.
For instance, finance leaders who are situated in different locations can keep track of the analyst-level effectiveness metrics such as CEI with real-time reports to take corrective actions, modify business strategies, and make proactive decisions on a day-to-day basis.
Challenge: Presence of disparate data sources
The distributed workforce has disparate data sources and the main challenge lies in integrating the data to get an overall view. Reports are not accurate without consolidated datasets and real-time visibility.
Solution: Central data repository
With a central repository, data can be gathered automatically from multiple sources to represent a single source of truth. It is a one-stop location for the entire data and eases the executive’s requirement for insights into the financial operations of different locations.
Automated data gathering ensures that all information is easy to find, and updated in real-time to support faster and more accurate decision-making.
Imagine the finance team of company Z wasting more than 60% of their time searching, collecting, and putting together client credit history data which is scattered across excel sheets, ERPs, and other data sources. A centralized data repository can provide them with the credit history under one unified platform and enable faster onboarding of customers.
Challenge: No defined process flow
Having systematic, standardized workflows to complete tedious finance tasks is essential to handle a growing customer base. Unstandardized finance processes lead to significant loss of time for teams.
Solution: AI-driven prioritization and rule-based workflow
AI-driven prioritization helps the team in organizing the worklist of analysts and arrange action items based on priority levels while also suggesting how to start the day. Rule-based workflows are configurable based on the business requirement for internal task assignments and approvals. It helps to improve process compliance by ensuring that important decisions are approved through the right hierarchy via automatic routing of requests.
For example, once a deduction analyst resolves a deduction, an approval email is sent as per criteria to relevant people. They can approve/deny the deduction directly from the email. It reduces the time for deductions resolution and provides visibility into the status of the deduction to all relevant stakeholders.
Challenge: Siloed workflows and lack of customer collaboration
Multiple locations often cause obstacles to smooth communication between teams and customers. It creates siloed workflows which lead to loss of resources, opportunities, and revenue. It also results in a longer turnaround time.
Solution: Centralized platform
A centralized platform provides finance teams of different locations with a collaborative interface that connects various finance tools and multiple ERPs to a single location. It also stores all customer interaction history, call recordings, notes, promise-to-pay data, and customer-initiated requests in one place.
For instance, company Z has hired a new collections analyst (analyst B), but he is situated in a remote location. It may seem difficult at first to work with, but using the centralized platform, analyst B will have access to all the past customer data and tools from his location and will be able to collaborate with the other finance team members in real-time. This makes the process easier and bridges the gaps in customer collaboration.
Challenge: Threat to data security and compliance issues
Distributed workforce often has to deal with credit card fraud and data breaches due to disconnected systems. The average cost of a data breach is
$210 per record. Non-compliance with industry-based security standards leads to revenue loss along with legal penalties and an increased customer churn rate.
Solution: PCI-DSS compliant payment gateway
PCI-DSS compliant payment gateway ensures maximum security of their customers’ confidential card data. It uses cloud technology to leverage processor tokenization services which eliminate the need for the merchant to store credit card information. This minimizes risks and cuts down the effort and cost of achieving PCI-DSS compliance for the merchant.
For example, customer A has to make a payment of $50,000, but she is skeptical regarding sharing the card details on an online platform. When company Z provides PCI DSS compliant payment gateway, it makes customer A feel more secure and it boosts her confidence in making payments.
Power CFO’s office with autonomous finance
In today’s unpredictable business environment where customer needs are evolving faster than ever, companies need to be more agile and sustainable. One way to do this is by making your finance function autonomous. Businesses need to seek ways to integrate autonomous finance features with the human workforce to achieve synergies. Let’s discover the benefits of an augmented workforce and how it enhances the nature of work:
- Increases the process efficiency of finance operations
- Boosts employee satisfaction and productivity
- Supports team collaboration across geographies
- Improves data visibility with real-time analytics
As we have gained a clear understanding of the value of an augmented workforce, let’s deep dive into the steps for its successful implementation:
Four-step guide for successful implementation of an augmented workforce
Business transformation story of Shurtape Technologies with autonomous finance
Shurtape Technologies, LLC is an industry-leading producer of pressure-sensitive tape products. Over the years, Shurtape has grown exponentially and expanded its business across continents. They have facilities in the US, Canada, UK, Germany, and Mexico. The credit and AR team at Shurtape Technologies, LLC handled receivables for all of its brands.
With the growing customer base, the credit and AR team at Shurtape faced several challenges:
- 40% increase in the AR team size at Shurtape
- Lack of significant impact on the resolution of the growing deductions
- 20% of the receivables were still in the past-due bucket majority of the time
- Any deduction less than $250 was simply written off without any validation
How did HighRadius help Shurtape Technologies?
- Automated worklist prioritization to identify accounts that have a high probability of delinquency
- Automated capture and recording of customer calls, notes, and P2Ps to pull and store customer interaction history, saving analysts time for more critical tasks
- Deduction resolution workflows for approvals or any inter-departmental or cross-departmental collaboration and resolution
- Automated correspondence to focus on high-risk accounts while reducing the bulk of dunning through pre-defined templates and rules
Impact:
Check the entire story on how Shurtape Technologies achieved scalability of credit and AR with HighRadius solutions.
The way forward with autonomous finance
HighRadius is the market leader in the emerging software category called Autonomous Finance and aims to disrupt how the Office of the CFO is executing key finance functions like accounts receivables, treasury, and accounting with AI. HighRadius Autonomous Finance Platform is a dynamic data-driven platform whose behavior continuously morphs as the underlying domain-specific data changes.
With Big Data, AI and NLP technologies HighRadius solutions help bring real-time intelligence to automate clerical, repetitive work empowering users to make timely and accurate decisions.
The Autonomous Finance platform is currently available for three key parts of the Office of the CFO: Autonomous Receivables for Order to Cash, Autonomous Treasury for Treasury and Risk Management, and Autonomous Accounting for Record to Report.
In our next blog, we will explore how to restructure your finance team’s role by building an autonomous finance function with HighRadius.
