- Point of view
Finance-as-a-service for the big-picture view
Connecting financial data for a clear line of sight into business performance
Though companies have had to contend with a slew of uncertainties, not least from COVID-19, they've also had the opportunity to build stronger businesses. From boosting cash flow to modeling longer-term operational and financial planning scenarios and rationalizing costs, organizations should consider new ways to meet changing priorities. And they should discard some of the approaches they take right now.
There are various ways that businesses can build nimbler finance functions with an agile financial management platform that supports more informed decision-making under pressure. But first, let's see where finance teams face the biggest challenges.
For any finance and accounting function that is not yet fully centralized and still runs a predominantly manual financial management process, the impact of COVID-19 has been especially difficult. CFOs and teams have struggled with:
So how can finance functions quickly improve performance and build business resilience?
By adopting a finance-as-a-service (FaaS) model, CFOs and their teams can craft fast responses to emerging business needs and generate valuable foresight to improve decision-making. Especially essential in turbulent times.
Finance-as-a-service is a future-focused service delivery model. It combines best-in-class finance operations management practices with advanced technologies – such as cloud-based ERPs, artificial intelligence, and intelligent automation – to make finance more agile and forward-looking.
With this new digitally enabled service model, F&A can improve working capital, deliver faster, more accurate forecasts, and bring down operating costs. It can also help finance organizations standardize and automate time-consuming, repetitive manual processes.
The FaaS approach helps CFOs in many ways:
A leading US insurance company was struggling with manual processes and a range of unconnected applications across functions, including record to report, order to cash, accounts payable, and travel and expense. The firm had only taken initial steps with digital technologies, which meant that the cost of finance was high, with inefficient processes and a limited view of operational performance.
The insurer adopted a FaaS approach. With a cloud-based ERP providing a uniform operating interface across all sub-functions, the finance team could easily automate processes, introduce digital technologies to improve performance, and deliver better operational insights for smarter decisions.
Thanks to these changes, the insurer expects to reduce its financial close cycle time, plug revenue leakage, and bring down costs in operations by up to 40%.
Companies need real-time access to critical information, but a legacy financial management system and process can't provide a big-picture view.
The FaaS model helps finance deliver better outcomes, such as improved cash inflow, accurate forecasts, faster close, better controllership and compliance, and smoother user experiences.
FaaS also makes your operating costs more predictable, so if your transaction volumes increase or service offering must expand, you can track what that would look like. It also gives your workforce greater freedom to focus on higher-value tasks and generate the insights the business needs to help chart the right path for growth.
At a time when businesses face huge uncertainty, finance functions that adopt a FaaS approach can establish stability, grow, and build long-term business resilience.