Transforming the Finance and Accounting Function A REPORT

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1 Transforming the Finance and Accounting Function

2 CONTENTS Abstract 3 Journey to Becoming World Class Optimize and Standardize Finance Function Talent Management Reliable Data and Analytics Robotics Process Automation A Norm in the Industry Finance and Risk Alignment Conclusion 6

3 Abstract In an increasingly competitive and complex environment, the role of CFOs and finance leaders has emerged from caretaker of company finances to strategic partners steering the organization towards higher goals. With more and more focus on the inorganic model of mergers and acquisitions for growth, the need to reshape the finance function has become unavoidable. What do you think is the most critical benefit achieved with reliable data and analytics? When do you think Robotics Process Automation (RPA) will be a norm in the industry as opposed to a phenomenon? What is the most critical challenge you face today in aligning finance and risk within your organization? Bringing the desired transformation, finance leaders face a multitude of challenges. Globalization of operations implies inadequate control of business process and a high cost of consolidating the business processes. The changes in regulatory landscape drive regular investments in technology infrastructure and the need to check on sub-optimal compliance processes. Talent and efficiency management is also a key issue that results in low profitability and high cost of specialized skill set for the organizations. In addition, analytics led performance management is a necessity to enable consolidation of data for decision making and to get a holistic view of entire business portfolio. NIIT Technologies 2015 survey has shed light on how the focus of CFOs has shifted from cost-cutting to efficiency improvement. The survey also revealed that there is a need to improve the decision making process and data visibility across organizations. The survey polled 30 senior executives (CXOs, VPs, SVPs and managers) to capture their views on the following key questions: What is the most crucial benefit that you think must be realized by optimizing and standardizing your finance function? What are the most critical challenges you face today with your staff? This publication explores the typical journey for any finance function and how the goals for this function help improve overall efficiency and effectiveness. Journey to Becoming World Class NIIT Technologies survey results reveal that most companies are slowly and steadily progressing towards the implementation of a world-class finance and accounting function. The last few decades were focused on ensuring compliance with changing regulatory standards, meeting governance requirements and ensuring cost reduction. However, today, the focus has shifted to: Operational efficiency and productivity to add real value to its stakeholders Empowering the finance function to make better and informed decisions based on the information available Data visibility across the organization NIIT Technologies survey has identified five key areas that play a vital role in developing a world-class finance and accounting function and adding more business value as a whole. 3

4 Optimize and Standardize Finance Function The finance function needs to build closer relationships with the business to deliver optimized global processes leveraging technologies. The function should be able to identify opportunities, spot pressure points and predict and forecast business performance to provide recommendations. Talent Management In the past decade, employees in the finance function have experienced major structural changes. Today however, these employees are working towards strengthening their role where they are part of the decision making process and are contributing to add value to the business. In order to fulfill these requirements, organizations must develop an In NIIT Technologies 2015 survey of senior executives, 35% of companies said they need sustainable cost reductions in their organization-wide framework that can help in attracting, motivating, hiring and retaining the best skillset. finance functions. Interestingly, a majority of the executives (42%) believe they need to improve efficiency in their day-to-day operations as compared to only a few (19%) who believed that availability of meaningful information for department leaders helps to understand performance against corporate goals. Also, 4% of the participants believed that accurate data delivered to the correct audience at the appropriate time is very important in optimizing and standardizing the finance function. In NIIT Technologies 2015 survey, 41% of all respondents felt that their organization was understaffed and the existing employees were overworked. While 22% felt that motivating and retaining employees was critical. More importantly, only 19% of the survey participants felt that the organizations take time to bring employees to a certain level and 18% felt that finding the right talent at the right cost was the biggest challenge facing their organizations. What is the most crucial benefit that you think must be realized by optimizing and standardizing your finance function? What are the most critical challenges you face today with your staff? 4% Enable sustainable cost reductions Under staffed and over worked 42% 19% 35% Availability of meaningful information for department leaders to understand performance against corporate goals Improved efficiency Accurate data delivered to correct audience at the appropriate time 19% 22% 18% 41% Finding the right talent at the right cost The time it takes to bring employees up to speed with new functions/features Motivation/Turn over 4

5 Reliable Data and Analytics Analytics is the practice of using data to answer questions about the business to understand its current state, spot hidden trends or relationships that can be acted upon, and make predictions about the future. This is an age old practice in the finance and accounting world wherein CFOs and Finance Leaders have been using analytics to crunch numbers and draw insights. But how analytics is being deployed appears to be shifting. In our 2015 survey, most senior executives (52%) believed that significant information that improves decision making is the most critical benefit of reliable data and analytics. However, 33% of the survey respondents felt that real-time monitoring and forecasting of events impact business performance and operations; 15% believed that the ability to extract analysis and visualize with the ERP of choice was the most critical benefit. What do you think is the most critical benefit achieved with reliable data and analytics? Robotics Process Automation A Norm in the Industry In the finance and accounting function, Robotics Process Automation (RPA) is fast emerging as a norm in the industry thanks to the number of benefits it delivers. RPA can reduce cost, enhance accuracy, increase scalability and flexibility of IT systems and increase compliance to standards. By automating processes, organizations achieve cost cutting but also free their resources for tasks that require high skill-sets. In our 2015 survey of senior executives, majority of survey participants (46%) are of the opinion that RPA will be a norm in the next 3-4 years. However, about 35% of the respondents said that it will be a norm in the next months; and 11% felt that RPA will be adopted in the next 12 months by the industry, followed by 8% of the respondents that felt that RPA will never become a norm. When do you think Robotics Process Automation (RPA) will be a norm in the industry as opposed to phenomenon? 52% 0% 33% Real time monitoring and forecasting of events that impact either your business performance or operation Ability to extract analysis and visualize with the ERP of choice Identify significant information that can improve decision quality 46% 8% 11% 35% In the next 12 months In the next months 3-4 years from now 15% Alleviating risk by improving the complex decisions of unplanned events more quickly Never 5

6 Finance and Risk Alignment With the rising pressure from the stakeholders, organizations are challenged to find new ways that can help them balance risks and finances in a more sustainable manner. To meet this challenge, organizations need to align the activities related to finance and risk to ensure that they are able to handle any crisis. In response to NIIT Technologies survey, 45% of the respondents felt that lack of an integrated approach and centralized oversight were the most difficult challenges that organizations face in aligning finance and risk; while 22% felt that limited understanding of business requirements and technology were the critical challenges. A small number of participants (11%) felt that a poorly executed change management plan - or lack of a robust one - was the major challenge while aligning finance and risk. What is the most critical challenge you face today in aligning finance and risk within your organization? 22% 22% 11% 45% Lack of integrated approach and centralized oversight Poorly executed or lack of a robust change management plan Limited understanding of business requirements Technology is only as good as the data it manipulates organization and converting finance professionals from analysts to decision makers. In the current competitive and global business environment with complex compliance requirements and risks, CFOs and Finance Leaders need to minimize the cost of managing business functions while focusing on overall process standardization and developing a specialized skill set for the organization. As organizations move forward to become operationally efficient and in turn, profitable, the focus is on an adept, agile and versatile finance & accounting process. Business transformation is, thus, imperative to increase value proposition and maximize business profitability. Our survey results also suggest that finance teams face a number of challenges in making the transformation a reality. Optimizing and standardizing finance functions, reliable data and analytic techniques, talent management, RPA and aligning finance and risk functions are top priorities for investment in the future finance functions. Enabling a world-class finance function is no small task. It requires undertaking a company-wide transformation project with best in class technology, knowledge and expertise to be able to deliver high business value to the organization. To cater to the needs of finance leaders, NIIT Technologies offers a comprehensive portfolio of traditional finance and accounting (F&A) services that integrate key business Conclusion Most organizations today are aspiring to establish a world-class F&A function. They are seeking platforms/solutions that can help them better integrate finance into the decision making activities of the processes such as Procure to Pay, Order to Cash, Record to Report and Travel and Expense. We offer a technology-enabled platform that helps organizations to seamlessly transform through FinGénie, a Business Process Management (BPM) layer. 6

7 About NIIT Technologies NIIT Technologies is a full spectrum global IT and Business Process Management (BPM) integrated services provider. We combine domain expertise, process excellence and cutting-edge technologies to provide flexibility and scalability across processes. We understand the BPO business and empower clients with innovative products and solutions that provide high performance and maximum business value - echoing our service vision New Ideas, More Value. Over the years, our business has established a proven track record of process innovation and operational excellence. We deliver exceptional business value through our continued focus on improving business outcomes. Our comprehensive portfolio of services is targeted across many verticals. Our state-of-the-art, right shore delivery centers across US, India and Philippines, caters to the need of more than 30 customers across India, US, Europe and Asia. In 2015, NIIT Technologies has been ranked Number 5 for customer satisfaction among all IT outsourcers in the UK. NIIT Technologies also has been awarded with 'Delivering Business Value' in the National Awards for Excellence in Outsourcing & BPO India NIIT Technologies Ltd. Corporate Heights (Tapasya) Plot No. 5, EFGH, Sector 126 Noida-Greater Noida Expressway Noida , U.P., India Ph: Fax: Americas NIIT Technologies Inc., 1050 Crown Pointe Parkway 5 th Floor, Atlanta, GA 30338, USA Ph: Toll Free: NIIT Fax: Europe NIIT Technologies Limited 2 nd Floor, 47 Mark Lane London - EC3R 7QQ, U.K. Ph: Fax: Singapore NIIT Technologies Pte. Limited 31 Kaki Bukit Road 3 #05-13 Techlink Singapore Ph: Fax: A leading IT solutions organization 21 locations and 16 countries professionals Level 5 of SEI-CMMi, ver1.2 ISO certified Level 5 of People CMM Framework Write to us at marketing@niit-tech.com D_100_050815