Digital Transformation Blueprint
for the Office of the CFO

How does this ebook help me?
In this report, Dion Hinchcliffe, Vice President and Principal Analyst at Constellation Research outlines a guide to develop an effective digital transformation (DX) plan for the office of the mid-market CFO. Discover how intelligent automation tools build a strong finance growth engine, powered by data analytics to accelerate decision-making and aid revenue growth.
Download Now

Key Takeaways

DX maturity model helps identify tech gaps and improvement areas in finance functions
Data visualization tools provide real-time financial information and forecasts
Advanced automation tools can be customized as per business needs and are easy to deploy
Tips for CFO’s office to adopt and achieve DX plans to improve working capital

Table of Contents

01.
The Digital Transformation Of Finance
Skip to Section
02.
The Road To Economic Recovery Through Increased Digitization
Skip to Section
03.
Getting Ahead: Benchmarking Finance and AR With Best-In-Class Businesses
Skip to Section
04.
The Unmet Imperative Of Midsize Businesses: Digital Transformation Of Finance
Skip to Section
05.
The Enablers Of Digital Transformation: Cloud, Automation, And Integration
Skip to Section
06.
How Advanced Automation Can Help CFO Priorities
Skip to Section
07.
Comparison Approach
Skip to Section
08.
Recommendations To The Office Of The CFO
Skip to Section
09.
Constellation’s Research Advisory Board
Skip to Section
10.
Endnotes
Skip to Section
11.
Analyst Bio
Skip to Section
12.
About Constellation Research
Skip to Section

Executive Summary

 
This report explores the capabilities and technologies required to fully rethink, digitize, and automate the finance function more effectively than is possible with piecemeal or incremental approaches, yet largely without the risks of big-bang IT projects that have attempted this before.
 

Chapter 01

The Digital Transformation Of Finance


Proactive chief financial officers (CFOs) today must give serious consideration and devote appropriate resources to proper digital transformation of their operating model within the finance organization. The overwhelming majority of CFOs today—86% 1—now view the digitization of financial processes such as accounts receivable/accounts payable systems as central to improving customer satisfaction, customer retention, and revenue generation.

As a result of this need to rethink business operations, it’s clear that adopting automation and digitization is not only the new normal, but is essential. In other words, it’s a must-have to build companywide resiliency and long-term sustainability. This accelerated path to digital transformation also helps to better connect the Office of the CFO with the overall organization to not just thrive effectively but also to guide the organization into the future. For these reasons, CFOs must now play a more strategic role by guiding critical business decisions.

One of the main challenges the Office of the CFO faces is that finance data typically is relegated to traditional systems such as accounting and budgeting systems and spreadsheets. Even when there is no future-looking financial transformation plan in place, manual processes create major roadblocks around the order-to-cash (O2C) and record-to-report (R2R) process. This leaves data that’s not accessible to members of the wider organization who may need visibility into that data to make strategic decisions effectively. However, with digital O2C processes in place, the process of turning orders into cash typically costs 56% less,2 a figure that rises the smaller a business is, due to fixed minimum overhead of accounts receivable.

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Digital Transformation Blueprint for the Office of the CFO


In this report, Dion Hinchcliffe, Vice President and Principal Analyst at Constellation Research outlines a guide to develop an effective digital transformation (DX) plan for the office of the mid-market CFO. Discover how intelligent automation tools build a strong finance growth engine, powered by data analytics to accelerate decision-making and aid revenue growth.

Download Now

Contents

Chapter 01

The Digital Transformation Of Finance

Chapter 02

The Road To Economic Recovery Through Increased Digitization

Chapter 03

Getting Ahead: Benchmarking Finance and AR With Best-In-Class Businesses

Chapter 04

The Unmet Imperative Of Midsize Businesses: Digital Transformation Of Finance

Chapter 05

The Enablers Of Digital Transformation: Cloud, Automation, And Integration

Chapter 06

How Advanced Automation Can Help CFO Priorities

Chapter 07

Comparison Approach

Chapter 08

Recommendations To The Office Of The CFO

Chapter 09

Constellation’s Research Advisory Board

Chapter 10

Endnotes

Chapter 11

Analyst Bio

Chapter 12

About Constellation Research
Chapter 01

The Digital Transformation Of Finance


Proactive chief financial officers (CFOs) today must give serious consideration and devote appropriate resources to proper digital transformation of their operating model within the finance organization. The overwhelming majority of CFOs today—86% 1—now view the digitization of financial processes such as accounts receivable/accounts payable systems as central to improving customer satisfaction, customer retention, and revenue generation.

As a result of this need to rethink business operations, it’s clear that adopting automation and digitization is not only the new normal, but is essential. In other words, it’s a must-have to build companywide resiliency and long-term sustainability. This accelerated path to digital transformation also helps to better connect the Office of the CFO with the overall organization to not just thrive effectively but also to guide the organization into the future. For these reasons, CFOs must now play a more strategic role by guiding critical business decisions.

One of the main challenges the Office of the CFO faces is that finance data typically is relegated to traditional systems such as accounting and budgeting systems and spreadsheets. Even when there is no future-looking financial transformation plan in place, manual processes create major roadblocks around the order-to-cash (O2C) and record-to-report (R2R) process. This leaves data that’s not accessible to members of the wider organization who may need visibility into that data to make strategic decisions effectively. However, with digital O2C processes in place, the process of turning orders into cash typically costs 56% less,2 a figure that rises the smaller a business is, due to fixed minimum overhead of accounts receivable.

Chapter 02

The Road To Economic Recovery Through Increased Digitization


Coming out of the large disruptions of the early 2020s with many urgent priorities and demands for modernization, the Office of the CFO now needs to merge its financial transformation strategy with an organization’s overall digital transformation strategy for cohesive roadmap. To do this successfully requires working with the IT department to integrate technology solutions, prioritizing and clearly communicating the benefits of automation via connected workflows and high levels of visibility for the organization’s leadership.

To ensure an organization is prepared to drive digital transformation, the CFO and CIO must work together. By nature and responsibility, these two leaders complement each other well in that the CFO can make decisions for the finance team to deliver change and deliver value in new ways, whereas the CIO can enable teams (in this case, finance) by providing vision and implementing relevant systems and technology. Together, they can collaborate to determine the best path for the Office of the Chief Technology Officer (CTO) to modernize, automate, and transform their operations.

Chapter 03

Getting Ahead: Benchmarking Finance and AR With Best-In-Class Businesses


By leveraging the practice of benchmarking in their digital transformation efforts in finance, organizations can better analyze competitor successes and shortfalls to guide their own internal targets. This can help set realistic expectations and prevents disappointment when too-aggressive targets are ineffective, while providing a better estimate of the challenge that should be assumed, in order to motivate and drive the effectiveness of the effort.

Benchmarking finance also offers specific guidance related to technological maturity and likely roadmap. Modern finance software now offers advanced functionality such as robotic process automation (RPA), artificial intelligence (AI), and domain-specific machine learning, to name a few. By assessing their technological maturity and comparing it with the industry’s maturity level across finance operations, organizations can better identify areas for improvement that drive increased productivity, transformation, and operational efficiency.

Figure 1 describes the overall journey organizations will undergo as they digitally transform their finance operations. Today’s businesses largely find themselves at least in Stage 2, with a digital finance system of some kind, but more often in Stage 3 or 4, with some initial process integration, self-service portals, and automation. However, only very few—approximately 1% of organizations today by most estimates—have achieved a largely autonomous financial function.

Figure 1. The Progression of the Transformation of Finance Through Digital Transformation

The Progression of the Transformation of Finance Through Digital Transformation

At a technical level, the most mature finance operations rely on sophisticated analytics, visualized reporting, and advanced automation and orchestration. Even inside each technology, there is a maturity curve. Using analytics as an example, there are four stages of technological maturity:

  • Descriptive: In this case, the analytics tool simply describes what happened.
  • Diagnostic: Along with descriptive functions, diagnostic analytics also show why an event happened.
  • Predictive: Along with descriptive and diagnostic, predictive analytics show what might happen in the future after considering trends and current state of a system, process, or workflow.
  • Prescriptive: This is where fully mature financial operations peak. Along with descriptive, diagnostic, and predictive capability, prescriptive analytics tell the organization how to respond for maximal benefit. The analytics tool calculates hundreds or thousands of possible resolution pathways, prescribing an optimal solution to meet the business or technological challenge.

Prescriptive finance analytics can be considered a virtual consultant and powerful competitive tool for critical financial planning and decisions, and is thus considered the endgame in the analytics journey. This augments the finance team by providing always-on, real-time strategy optimization recommendations. Enterprises at this level of maturity are moving away from relying principally on the vagaries of infrequent and expensive human analysis and toward adopting a data-driven methodology for critical operational and decision-making processes.

For the purposes of this report, the term advanced analytics means access to the full range of analytics above, up to and including prescriptive analytics.

Fortunately, in the realm of the digital transformation of finance, high-quality benchmarking is now generally available and can inform the organization about where it is on each technology dimension of interest. This can help the CFO form prioritized goals and put them on a roadmap. The best benchmarks will focus on two metrics across each functional area in finance—namely, waste reduction and transformation potential.

A good example is Constellation Research’s benchmark in this regard (see Figure 2), which breaks down the technology possibilities in each major category of finance.

Figure 2. Example Benchmark Scoring for Digital Finance Capability

Example Benchmark Scoring for Digital Finance Capability

Constellation Research recommends obtaining a current set of benchmarking data for competitors and the general industry sector, and then producing an analysis that compares the organization with these measures. Figure 2 shows an example of an output and can help CFOs begin to establish the kind of transformation goals that should be carried out. However, other specific areas must be identified in the activities of the finance organization itself, including:

  • Accounting
  • Billing
  • Management reporting
  • Budget and forecasting
  • Tax accounting
  • Business analysis
  • Financial reporting
  • Accounts payable
  • Credit management
  • Payroll
  • Accounts receivable
  • Finance strategy and planning
  • Performance management and improvement
  • Treasury
  • Internal audit
  • Tax planning
  • Process controls

Benchmarking and opportunity analysis must be conducted for each of the functions in finance targeted for transformation. Opportunities are generally bucketed in this process into two categories: reduction of inefficiency (waste) and opportunities for automation/transformation. A prioritized scorecard can then be developed by the Office of the CFO in close conjunction with the CIO to determine the likely targets for overhaul and the order in which those targets should be met. With this information, CFOs are much better armed for understanding the digital landscape in front of them.

The next step, then, is understanding the complete range of possibilities when it comes to transformation technologies.

Chapter 04

The Unmet Imperative Of Midsize Businesses: Digital Transformation Of Finance


Nearly full digitization is now an imperative for the finance function because of a host of technologically based advances that enable numerous ways of operating. These include the widespread availability of business data; teams’ ability to process comprehensive sets of data using much more accessible algorithms and analytic methods; and improvements in connectivity tools and platforms, including cloud computing, self-learning automation, and advanced analytics/AI.

Today, CFOs and their teams are the critical gatekeepers for the vital data required to generate forecasts and directly support senior leaders’ strategic plans and decisions. This includes data relating to sales, order fulfillment, supply chains, customer demand, and business performance as well as real-time internal, industry, and market statistics. Constellation Research has determined there are four key areas of technology that, right now, are understood to show the most promise for use in finance—especially in midsize business—and therefore are the most likely to show significant results for their investment:

  • Pervasive automation and AI to improve processes across finance
  • Data visualization to give end users self-service access to real-time financial information and improve organizational performance
  • Advanced analytics for finance operations to accelerate decision support and operations
  • Sophisticated capabilities for rethinking and rapidly evolving business operations to unlock otherwise hidden or previously unattainable growth opportunities

CFOs prepared to unleash modernization and transformation across their finance portfolio, in a rigorous and well-managed effort, are set to reap more comprehensive benefits.

To maintain a competitive finance capability, CFOs must now champion and pursue investments in one or all of these areas. Successful buy-in will depend, however, on the company’s origination point in its current strategies, needs, and trajectory, as well as the available set of technologies and talent. It’s also key to realize that digital transformation of finance cannot happen all at one time.

In addition, it’s important for companies to avoid the common pitfalls: Companies should not use their legacy enterprise resource planning (ERP) and other core business systems as excuses to not embark on the needed changes in finance areas such as order-to-cash functions including invoicing, collections, and working capital management. By working on right-size proof-of-concept projects and successfully digitizing the high-value tasks within finance, the CFO—in conjunction with the CIO—can establish proof points that will build experience and confidence and ease the rollout of breakthrough new digital technologies across the finance function and ultimately across other parts of the company.

Chapter 05

The Enablers Of Digital Transformation: Cloud, Automation, And Integration


A few powerful baseline technologies, outlined below, have contributed to digital transformation in the financial sector. All financial leaders must understand why these technologies enable or directly contribute to better operation, lower operating costs, higher performance, and more agility. For mid-market businesses in particular, these technologies offer the potential to compete with enterprise organizations.

Cloud

The adoption of cloud in finance has brought a noticeable swiftness and acceleration into the system, with higher-growth firms seeing process swiftness through the process of digitizing functions such as order to cash. 3 SaaS-based cloud applications for business processes such as HR and accounting have transformed financial institutions’ working scenarios. Security and compliance are crucial ongoing challenges of financial services/solutions. Cloud-enabled applications provide increased security to the entire system and scale data for critical functions including consumer payments, credit scoring, statements, and billings. The cloud’s intrinsic features such as resource pooling, availability, on-demand service, security, and easy maintenance are the primary reason for its growth and popularity among various organizations.

Automation

Automation now comes in many innovative forms and provides a potent technology set that allows the full delivery of digital tasks with little to no human intervention. It is extensively used to streamline enterprise operations, increase productivity, and reduce costs.

Automation enables IT systems to emulate and integrate human actions interacting with digital systems to fully initiate and carry out business processes. Financial institutions utilize advanced automation technologies today—such as user-defined workflow, AI, and RPA—to fully automate transaction processing and communication across various systems.

Robotics in finance are used mainly for:

  • Treasury processes
  • Budgeting, planning, and forecasting
  • Billing, payables, receivables, and accounting
  • Intercompany transactions, allocations and adjustments, and journal entry
  • Reporting internal as well as external finances

Data Visualization

The graphical representation of business data via visual elements such as graphs, charts, and maps is termed data visualization. Popular data-visualization solutions such as Tableau and Power BI recently have given way to more domain- and industry-specific capabilities to provide an accessible way to observe and understand data patterns, trends, and outliers.

Data visualization is the key for gaining insights into financial data. Analysts and business leaders can use self-service to easily track and predict organizational performance based on the data patterns that are easy for them to understand, consume, and act on. This enables them to more quickly and accurately track both financial and nonfinancial KPIs. Correlating KPI metrics with business activities greatly improves overall business performance.

Financial institutions benefit mainly from the ability of new data visualization techniques to reveal important patterns and anomalies. Trending data is easier to see and analyze via more dynamic, interactive charts or graphs rather than fixed data points. The ability to dig deeper into data patterns allows better decision-making. Such advantages from data visualization provide businesses a true competitive edge—if their financial systems properly support these new capabilities. Examples include data visualizations for cash flow positions, days sales outstanding (DSO), and bad-debt reports, including tracking key performance indicators such as collector productivity and the Collections Effective
Index (CEI).

Combining Advanced Technologies in Finance

What is perhaps most compelling to the finance department is when many of these capabilities are combined in much more useful ways—for example, using higher agility (cloud) to go faster and not just automate or provide insights, but also deliver on new strategic operational capabilities in financial operations. At the leading edge of these capabilities are predictive and prescriptive financial capabilities (a combination of automation and analytics/data visualization), which can provide high-leverage aids for navigating and operating the organization.

Finally, at the leading edge of digital maturity is fully autonomous finance (see Figure 1), which can enable much of the tactical part of finance to be entirely automated, leaving the remainder to human decision-makers to map out high-order strategy.

Chapter 06

How Advanced Automation Can Help CFO Priorities


The broadest theme currently with advanced technologies in finance is that they are proactively changing the finance function to be one that is working on the business versus working in the business. In recent years, there has been a rising expectation among chief executive officers (CEOs) that CFOs will work with front-end team members to redesign financial processes to bring information directly into corporate technology systems, such as automating journal entries or digitally orchestrating key processes such as accounts receivable end to end.

In fact, a series of advanced technologies beyond workflow automation has now moved directly into the scope of finance leaders’ responsibilities—among them many of the technologies explored above, including but not limited to data visualization, intelligent workflow, data analytics, RPA, AI, and cloud.

CFOs can now spend their valuable time looking at anomalies and seeking vital new trends or new information that will impact the business, versus having to spend their time creating new reports or understandable explanations of the current financial situation. Advanced automation and data visualization especially can greatly improve the focus of the Office of the CFO and provide strategic benefits that can cascade throughout the finance function as these technologies are embraced and implemented.

Proactive, Intelligent, Easy-to-Implement, and Change Automation

Finance organizations perform a wide range of activities, from collecting basic data to making complex decisions and advising business leaders. As a result, the potential for improving performance via automation varies across subfunctions and requires a disparate portfolio of differentiated technologies to unlock the full range of opportunities.

Most of the technologies that deliver basic task automation in finance today, including intelligent workflow and RPA, have been around for some time now. But they’ve been getting more reliable, faster, and less expensive over the past decade. High maturity has also arrived: Many of today’s automation platforms and providers were startups a half-decade ago, struggling just to make it through the scrutiny of IT security and financial compliance reviews. Today, many well-established firms exist, with the infrastructure, security, and governance to support the needs of even the most sophisticated finance teams.

Lessons have been learned in how to be nimble and deliver changes in months, not years. The task-automation tools of today are now much easier to deploy and use than first-generation solutions.

Today’s financial automation systems are also much more self-service. Where an executive once had to delegate the development of a bot to an overworked IT team, today finance team members can usually be trained to develop much of the digital workflow themselves. Right now, it’s estimated that it makes sense from a cost/benefit perspective to automate at least 50% of the work that is theoretically possible to automate via low-code task-automation technologies, RPA, and other intelligent workflow solutions.

What’s more, as operational conditions change and new insights are made, today’s advanced automation can be continuously tweaked and dynamically updated right within the Office of the CFO, with little to no IT involvement, making it far easier to move quickly, avoid unwanted scenarios, and seize opportunities.

The Leading Financial Use Cases

There are several ways in which advanced technologies now can be used in finance. Automation is the discriminating factor, aided by cloud, data visualization, and other technologies. Figure 3 displays the subfunctions of the Office of the CFO, with those functions’ amenability to automation and data visualization in particular.

Although some high-value subfunctions are somewhat resistant to the capabilities of automation, it must be understood that virtually all of them can benefit from some degree of automation. General accounting, payables, and receivables in particular can be largely automated, and this is where much of the initial effort in next-generation automation technologies can be made.

Figure 3. The Degree to Which Finance Subfunctions Can Be Digitally Transformed

The Degree to Which Finance Subfunctions Can Be Digitally Transformed

Chapter 07

Comparison Approach


Today, the Office of the CFO has two main approaches to take: accumulate a portfolio of best-of-breed technologies or use a more integrated financial solution that already has many of the pieces put together and ready for use.

Implementing With Disparate Point Solutions

The challenge of using many different technology solutions from a large number of providers is in making them successfully work together, while also making sure that when problems in working together inevitably arise to troubleshoot cohesively when required. Although currently it’s considered a resurgent best practice to make the effort to integrate differentiating tech, finance functions often do not have a sufficiently special impact to the company’s market presence to warrant the effort and expense.

Realizing an advanced and modernized finance function that is agile and adaptive while also made out of the manually integrated collection of many finance systems and applications is therefore not always the best approach.

Scaling With Comprehensive, Integrated Finance Solutions

Instead, the Office of the CFO can increasingly depend on the broadening functional suites of many software providers, who are already adding in advanced automation, data visualization, and intelligent workflow and have all of it running in the cloud today.

While every organization’s mileage will vary, the fastest and most sustainable route is to choose several core technology offerings that span the range of functions required in the finance group. This minimizes the number of often-difficult and expensive integrations, while also reducing the numbers of vendors responsible. It also onboards the maximum amount of pre-integrated finance capabilities. Some duplication is inevitable, as is not having the best-of-breed implementation of some subfunctions, but this approach still allows some mix-and-match to achieve a more optimal set of capabilities while minimizing complexity and adoption.

How to Prepare for the Digital Transformation and Drive Adoption

Today, most existing processes in finance are intentionally designed to harness the collective intelligence and institutional knowledge of the finance team and the business. There is a strong tendency for managers, as they realize an automation effort, to follow those well-known patterns, re-implementing a new automation tool into the existing process instead of rethinking the art of the possible with what that technology can fully enable.

Instead, managers often view automation as mostly a technology initiative that is better led by the IT department. The result is a shortfall in reaching the finance team’s potential: Organizations end up with a patchwork of incompatible and suboptimal technologies and solutions that automate separate and distinct parts of the finance function. This approach was perhaps acceptable getting started with automation’s potential in finance, but no longer.

Realizing the full potential of digital finance requires a fundamentally new way of looking at the opportunities in finance. To unlock that potential, managers must be aware of the greater possibilities and then willing to reengineer their processes more completely and holistically. In addition to new technologies, this will require some real shifts in skill, talent, and mindsets. Thus, the Office of the CFO will have to hire more digitally talented members to the team and shift its culture to a more digital posture. But it is easier than ever to fully reengineer a finance function to be much more automated yet also far more strategic in the way it contributes value to the organization. Adoption of modern digital finance is therefore a competitive imperative, not an incremental choice, that will require both active change management and leadership vision.

Chapter 08

Recommendations To The Office Of The CFO


Successfully achieving the modernization and transformation of the finance function requires the leadership and vision of the CFO. It is the single most vital factor, just as with any initiative in finance. Based on analysis by Constellation Research, the Office of the CFO is most likely to achieve an effective approach by undergoing this process systematically via the following plan:

  • Begin the modernization and transformation process with everyday transactional activities in finance. These inherently have less risk, with a matching, appropriately low level of talent impact. Use the areas in finance shown in Figure 3 that are highly amenable to advanced technologies. This automation isn’t likely to disrupt staffing levels or cause worries about the future. Neither will it require the most advanced skills to realize. Also, such processes usually don’t require a major organizational redesign to capture the benefits of advanced technologies. A team that currently has a dozen people could reduce its headcount by a third by using a fully or partially automated solution. Seeking out simple tasks first allows the remaining employees to focus on the more strategic tasks and shows them how the change process works. These quick wins create the momentum and support that enable the finance function to justify the next steps in a broader deployment of advanced finance capabilities.
  • Proactively and positively address the human impact automation in finance will create. Work with the chief human resources officer (CHRO) to develop a retraining, upskilling, and internal relocation capability that works closely in conjunction with the Office of the CFO to prepare for larger-scale automation. As the finance function deploys advanced technologies and tackles more- complex activities, treasury, and financial planning, this typically involves reduction in workforce, given that these functions have less turnover and natural attrition can’t be used as dependably. A few organizations have had some challenges in this regard, but increasingly it is possible to use educational and cross-training approaches to retain many of these workers. For larger-scale modernization and transformation efforts, talent planning is important and will prevent undesirable talent losses. The CFO must carry out a clear and considerate communication plan for any affected workers before automation tools are introduced. Key points to address include being clear about the future organizational model, demonstrating that staff will have a chance to upskill or relocate within the organization, and ensuring trust is maintained as the finance function and related areas are redesigned in the face of major new technologies.
  • Revise the talent profile to attract finance professionals with the digital skills and mindset to carry out the remaining shifts. Take steps to retain existing workers who are adapting well to the new contours of the finance function. Up-and-coming leaders will be interested and self-motivated in helping to lead the changes and create the future. The Office of the CFO is not going to become another IT department, but its digital skills and willingness to use them are now table stakes for the finance function. Building a next-generation digitally capable finance capability as early as is feasible will create the ability to execute the modernization and transformation that finance requires.

Despite all the benefits of rethinking the finance function in modern digital terms, there are many future opportunities and possibilities that are unaddressed here. The key, however, is to have a fully modern foundation for finance that will prepare it for them. This much is clear, however: The possibilities and promise far outweigh the obstacles that existed just a half-decade ago. CFOs must develop and share with other senior leaders a new and technologically sophisticated vision for the digital finance function. They have a historic opportunity to shape the evolution of their companies while gaining invaluable
experience that will help take the organization the rest of the way. However, those outcomes and results will not come at all if CFOs don’t boldly take the first vital steps toward them.

Chapter 09

Constellation’s Research Advisory Board


External contributions to this report were provided by vendor and end user members of Constellation’s Research Advisory Board, who in this case were:

  • Stephen DeFilipo, higher education CIO
  • Wayne Sadin, CIO and financial systems thought leader
  • Jason James, CIO, Net Health
  • April Downing, CFO, Khoros
Chapter 11

Analyst Bio


Dion Hinchcliffe

Vice President and Principal Analyst

 
Dion Hinchcliffe is an internationally recognized digital thought leader, industry analyst, business strategist, enterprise architect, transformation consultant, and keynote speaker. He is widely regarded as one of the most influential figures in enterprise IT.

Currently a VP and principal analyst of Constellation Research, Hinchcliffe is a well-known industry expert on the topics of digital transformation, CIO issues, digital workplace, ecosystem strategy, digital business, and next-generation enterprises. His thought leadership can be found on ZDNet, ebizQ, On Digital Strategy, and Enterprise Irregulars. He is co-author of the bestselling Social Business by Design (John Wiley & Sons).

Hinchcliffe is an executive fellow at the Tuck Center for Digital Strategies and was recently identified as one of the top three people most mentioned by IT leaders. Industry analytics firm Onalytica ranks Hinchcliffe as the No. 2 influencer globally on the subject of digital transformation. He has keynoted or spoken at hundreds of leading industry conferences, including CeBIT, KMWorld, IT Roadmap, Dreamforce, CIO Perspectives, AIIM Conference, IBM Connect, and other industry events.

Chapter 12

About Constellation Research


Constellation Research is an award-winning, Silicon Valley—based research and advisory firm that helps organizations navigate the challenges of digital disruption through business model transformation and the judicious application of disruptive technologies. Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what topics are covered, and how clients can partner with a research firm to achieve success. Over 350 clients have joined from an ecosystem of buyers, partners, solution providers, C-suite, boards of directors, and vendor clients. Our mission is to identify, validate, and share insights with our clients.

Organizational Highlights

  • Named Institute of Industry Analyst Relations (IIAR) New Analyst Firm of the Year in 2011 and #1 Independent Analyst Firm for 2014 and 2015.
  • Experienced research team with an average of 25 years of practitioner, management, and industry experience.
  • Organizers of the Constellation Connected Enterprise—an innovation summit and best practices knowledge-sharing retreat for business leaders.
  • Founders of Constellation Executive Network, a membership organization for digital leaders seeking to learn from market leaders and fast followers.

About HighRadius

HighRadius offers cloud-based Autonomous Software for the Office of the CFO. More than 700 of the world’s leading companies have transformed their order to cash, treasury and record to report processes with HighRadius. Our customers include 3M, Unilever, Anheuser-Busch InBev, Sanofi, Kellogg Company, Danone, Hershey’s and many more.

Autonomous Software is data-driven software that continuously morphs its behavior to the ever-changing underlying domain transactional data. It brings modern digital transformation capabilities like Artificial Intelligence, Robotic Process Automation, Natural Language Processing and Connected Workspaces as out-of-the-box features for the finance & accounting domain.

To learn more about how HighRadius’ solutions have helped the world’s leading companies improve cash flow, reduce costs, and level of the contribution of their finance teams, visit www.highradius.com

Executive Summary

 
This report explores the capabilities and technologies required to fully rethink, digitize, and automate the finance function more effectively than is possible with piecemeal or incremental approaches, yet largely without the risks of big-bang IT projects that have attempted this before.
 

Chapter 01

The Digital Transformation Of Finance


Proactive chief financial officers (CFOs) today must give serious consideration and devote appropriate resources to proper digital transformation of their operating model within the finance organization. The overwhelming majority of CFOs today—86% 1—now view the digitization of financial processes such as accounts receivable/accounts payable systems as central to improving customer satisfaction, customer retention, and revenue generation.

As a result of this need to rethink business operations, it’s clear that adopting automation and digitization is not only the new normal, but is essential. In other words, it’s a must-have to build companywide resiliency and long-term sustainability. This accelerated path to digital transformation also helps to better connect the Office of the CFO with the overall organization to not just thrive effectively but also to guide the organization into the future. For these reasons, CFOs must now play a more strategic role by guiding critical business decisions.

One of the main challenges the Office of the CFO faces is that finance data typically is relegated to traditional systems such as accounting and budgeting systems and spreadsheets. Even when there is no future-looking financial transformation plan in place, manual processes create major roadblocks around the order-to-cash (O2C) and record-to-report (R2R) process. This leaves data that’s not accessible to members of the wider organization who may need visibility into that data to make strategic decisions effectively. However, with digital O2C processes in place, the process of turning orders into cash typically costs 56% less,2 a figure that rises the smaller a business is, due to fixed minimum overhead of accounts receivable.

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HighRadius Integrated Receivables Software Platform is the world's only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway - covering the entire gamut of credit-to-cash.