With the right systems, processes, and policies as well as effective communication, the finance department within an organisation can be the source of significant competitive advantage. This additional role is made possible by recent advances in technology, which allow for widespread process automation as well as innovations in management structure.
Breakthroughs in optical mark reading, data analysis, and artificial intelligence let finance departments automate processes that previously needed to be done manually. Such advances, if implemented and integrated properly, allow for four separate categories of benefits for businesses.
The first is to free up extra time. Although any given organisation’s finance department would have deep knowledge and insight into its financial strategy, its employees tended to be too busy to step back, take a look at the big picture, and offer sophisticated insight into overall strategy decisions. New advances in software technology mean that computers can finally do the real heavy lifting in the area of finance and record keeping, letting their human partners catch their breath for long enough to offer their insight to other areas of the company.
The second benefit relates to the depth of this insight. Big data analysis, predictive modelling, and improved data visualisation can provide team members with a much clearer look at the company’s past (and potentially future) behaviour. Various strategies can be simulated, tweaked, and analysed within the computer, before they are tried out in the real world. Armed with a comprehensive look at the data from several angles, your finance team can provide informed guidance during strategy meetings.
The third benefit of new technology, as applied within a company, relates to internal communication. With real-time networking now available to businesses of all sizes, members of the finance team can provide valuable timely information to support and fine-tune all stakeholder strategies. Insights from finance can finally enjoy equal footing with other areas of the company, when it comes time for decision making.
The fourth benefit involves helping your business positively affect the wider community through stakeholder engagement. A properly equipped and capable finance department can balance the company’s bottom line alongside its other priorities, such as having a beneficial impact on society and the environment. Through computer modelling of strategy outcomes, businesses now have the ability to preview the likely effect of their decisions with greater clarity. This more detailed analysis has the effect of letting organisations implement new, more holistic strategies with greater confidence.
Of course, the ability of a finance department to make such contributions, and the quality of the contributions themselves, depend on its own ability to function smoothly as a unit. Good internal governance, efficient day-to-day operations, the ability to handle unexpected events, a healthy culture with good communication links to the rest of the organisation – these are key features of a finance department that can add value to the business.
Such qualities must be earned, however. They result from a clear and coordinated decision within forward-looking businesses, to modernise their finance departments according to current best practices. Independent audits can lead to increased departmental efficiency, while the right business consultants can introduce streamlined procedures, up-to-date software and ERP systems, comprehensive training, a positive internal culture, and a company structure that seeks input from its internal experts.
With dynamic and agile processes in place, your organisation’s finance department will be able to play an important role in driving organisational adaptability, sustained business growth, and innovation. By leveraging predictive tools and analysis to plan, forecast, and share overall end-to-end performance, the department can mitigate risks surrounding new initiatives – and turn obstacles into opportunities.