In a recent Gartner survey, 82% of CEOs reported having a digital transformation initiative underway in their business. What does that mean for Finance teams? For most CFOs, it means rethinking how they leverage people and technology to deliver value to their organization. It also means rethinking the outcomes they are trying to achieve.
For many years, finance leaders have focused on labor efficiency to improve their operation – outsourcing tasks like payroll, creating shared service environments to centralize work, and leveraging lower cost locations to achieve wage savings. Through these multiple moves, the “outcome equation” rarely changed. Today, 80% of finance’s effort is still on data gathering, with just 20% spent on data analysis and actioning. True transformation in finance should turn that equation upside down.
Where should CFO’s start?
Few CFO’s fancy themselves as technologists. The good news is they don’t need to be -- while still becoming the digital transformation czars for their organization. For many, the best starting point is to simply analyze where their team’s effort is focused. How much of their team’s day/week/month is spent on clerical tasks versus on recommendations and changes that positively impact the business? If the clerical tasks went away, what higher value jobs could your people do? Could they improve your control processes? Could they focus on your compliance posture? Maybe optimize employee spend to improve cash flow and drive the bottom line?
The best starting points on the transformation journey are high-value, low-risk opportunities that create positive momentum and impact. Rethinking your desired outcome equation will point you in the right direction.
Transforming Spend Audit and Risk Mitigation to Drive Finance Forward
For many large businesses, we find that transforming current spend audit and risk mitigation processes can be the perfect place to start.
Large businesses typically have dedicated resources (often large teams) focused on auditing employee and vendor spend transactions to identify fraud, waste and misuse. Typically, these are heads-down clerical positions doing sample-set audits on thousands of T&E, payables and e-procurement purchases. The intent is good, but often the outcomes range from marginal to counterproductive. There is just too much data, across too many spend channels, receiving too little analysis for it to be an effective audit. This is a great opportunity for technology to change the outcome equation.
Leverage Technology to Improve Your Finance Outcomes
Advanced, purpose-built technologies that leverage AI and machine learning can immediately transform the way large organizations analyze and action their employee spend. We regularly work with Fortune 5000 customers to reduce their audit effort while significantly expanding their audit lens. The impact can be staggering. We have examples of spend audit teams going from 50 people to 10 and from 20 to 2, all while expanding their audit scope and significantly improving audit accuracy and results.
- 70-90% reduction in audit effort
- 100% scope coverage of employee spend transactions (T&E, Payables, Procurement)
- Prioritized risk-based findings based on advanced analytics
- Up to 5% of total spend identified as a cost savings and/or future avoidance opportunity
And what did these teams do with their freed-up time? They are now focused on employee engagement, policy and compliance improvements, vendor negotiations, cash flow optimization, and data analysis that can be leveraged by managers to improve spend patterns across their businesses. Real time shifted to meaningful actions. That is the outcome equation you can achieve from your transformation journey.
For CFOs looking for digital transformation proof points, spend audit and risk mitigation is a great place to start!
Start Your Transformation Today!
To start your own digital transformation, take a look at Oversight’s AI-powered audit and risk mitigation platform.