With the explosion of digital technologies—dashboards and analytics, mobile apps, social collaboration, and the cloud, finance teams need to be more involved in technology decisions. In an interview with Express Computer, Ajay Kumar of Oracle India speaks about the role of technology in finance.
What is causing the role of finance to change from governance to guidance?
Finance has traditionally been about control, compliance and reporting. The function’s main duties were to manage profit and loss, risk, control and compliance, and to provide the business with the reporting required to make informed decisions. But in today’s digital economy, cloud, mobile, social, and analytics are spawning new business models almost overnight. The pressure on finance leaders to change old business models and uncover new opportunities is higher than ever before. Therefore, the need to move from governance to guidance. CFOs must adjust to the new way all companies are valued in this digital age. Investors are giving much less weight to tangible assets such as property and equipment, and more weight to digitally based business models. At some companies, finance is at the heart of every significant business decision. This is the aspiration for many of today’s finance leaders.
As finance technology experts, we at Oracle have a unique point of view that, we hope, will help to fill that gap. As the business world shifts under the pressures of digital technologies and global markets, we have seen today’s finance leaders move to guidance. In order to accomplish this, however, finance teams must be freed of the tasks that have traditionally taken up so much of their time: compiling and producing reports from multiple data sources, often using spreadsheets. Finance leaders should automate, simplify, and outsource the tasks that don’t add value, so that their teams can focus on the more important, strategic tasks. Traditional accounting skills are seen as merely the cost of entry for a finance director or CFO. Today, there’s an assumption that you already have those skills embedded in a team. Companies are looking for finance leaders who are commercially astute. CEOs want a CFO who will be the co-pilot of the business—a strategic thinker, someone who can formulate a plan for the company and implement it.
What is the importance of digital technologies in finance domain?
With the explosion of digital technologies—dashboards and analytics, mobile apps, social collaboration, and the cloud, finance teams need to be more involved in technology decisions. It is becoming an accepted norm that the cloud can reduce IT costs, but the business benefits can extend beyond mere cost reduction into true competitive advantage. For example, a global real estate company recently embraced finance in the cloud, not only because of the cost savings, but also because the new system provided mobile capabilities to thousands of brokers and agents—thus, making the company more attractive to new franchisees. In addition, the new analytics and dashboards made the company’s finances more transparent, thus making the business more attractive to potential investors. Understanding where digital technologies fit into a business model is critical to finance teams that want to guide and partner with the business.
Our view at Oracle is that, to provide a reliable guidance system for the business, finance teams should embrace three principles:
Finance teams should be digital leaders
Data is the new currency
Finance connects the enterprise
What is the evolution of data as the new currency?
Finance helps the business say it with numbers. Because finance professionals are trained to be analytical, they are ideally positioned to drive a data-driven culture throughout the enterprise. The CFO’s office has always had credence as being a source of truth. Today’s flood of data is the perfect opportunity to extend that credibility to other statistical analyses and more data sources. For example, a global hotel chain monitored customer sentiment at every individual hotel and used this information to improve the customer experience and loyalty. Through predictive planning and analysis, they reduced forecasting cycles and close times, which freed up the finance team from routine reporting and gave them more time to partner with the business for revenue growth.
There are also regulatory implications associated with the availability and analysis of more data. Consumers and regulators will assume that your company knows the reason why a product failed or a tragedy occurred, and that you have the capabilities to predict more, because of the volumes of data being captured. As finance teams start to work with other business units—whether it’s marketing, sales or HR—they can help them identify the key performance indicators they should be measuring in order to demonstrate success. KPIs will vary for every business, but finance teams can help to ensure that the data sources are reliable, credible and viable, and that the numbers stand up to scrutiny.
Role of Cloud and Oracle solutions in this evolution.
Cloud-based models make it easier and more cost-efficient to roll out these tools to a wider group of people across the organization. Moreover, modern technologies such as social, mobile, and big data are changing the competitive dynamics of the global economy. Organizations that know how to create digitally enabled business models leveraging modern technologies are thriving; leaders who continue to invest in traditional business models powered by legacy systems are putting their companies, employees, and shareholders at serious risk.
One of the most effective solutions offered by Oracle in this space is Financials Cloud. It is the most comprehensive integrated and scalable financial management solution available. Oracle Financials Cloud helps finance teams be more productive, serve business managers with innovative modern best practices, and give all users on-demand access to role-based information for better decision-making. It is a complete, modern suite delivering continuous innovation in key technologies such as mobile, social and analytics deployed in the cloud to achieve more, faster, and with less resources.
Kumar is National Sales Consulting Director – ERP at Oracle
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