Intelligent Finance can have your finance department ‘Leading at Speed’

The term intelligent finance has moved beyond connected finance in finance theory for organizations. No longer is it simply ok for enterprises to have finance departments that are silos unto themselves or lead from a financial perspective only. The best managed and performing companies are leading at speed by having their finance departments focus on the entire business, deriving intelligence from automated processes that are data-driven and operationally focused. Learn how intelligent finance is the leading edge, not just of financial theory, but corporate performance management as well.

Some real statistics to drive the point further

Here are just a few of the driving statistics for intelligent finance:

• 86% of CFOs reported that analytics initiatives miss the mark
• 77% of CFOs believe it is within their purview to drive business-wide operational transformation
• 81% of CFOs see identifying and targeting areas of new value across the business as one of their main responsibilities
• Gartner predicts that, by 2024, 70% of all new FP&A projects will have an extended scope beyond the Finance department
• Only 40 percent of organizations have brought digital initiatives to scale (Gartner).

Financial professionals realize that it is their primary responsibility to first drive operational transformation for efficiency and secondly to assess areas of value across the business. However, in a related area, most agree that their own analytics, the information that drives these other two core responsibilities are often lacking.

So what is intelligent finance?

Intelligent Finance teams unleash their true value by inspiring and enabling a performance-driven culture by empowering decision-makers with data-driven financial and operational insights by speaking both the “language of the business” and corporate financial speak.

Essentially, intelligent finance converts all the business intelligence of the company into a financial lens that then offers insights into what drives profitability including the best return on investment strategies as well as the best cost-saving processes.

This intelligence is referred to as financial signalling and is the next step in the evolution of finance. Signals are the trend lines that take granular and disparate data sets, combined with an intuitive understanding of the business, that is then interpreted by the finance department for analysis and reporting to the C-suite for further action.

All of this data compilation, transformation, aggregation and analysis needs to happen at speed. Legacy financial systems spread across multiple environments that also require intensive labour processes are failing businesses and costing them competitive advantages and profit.

Here are the components of intelligent finance

At the very core of intelligent finance is the extended planning and analysis (XP&A) function that all high-performing financial teams are expected to produce in today’s top corporate performance management environment.

This XP&A extension dives into most operational units of an enterprise to offer support of resources to accelerate decision-making and unifying processes. In order to offer this support the XP&A process needs to have an agile data aggregation system in place across the entire eco-system of corporate data to ensure accurate financial signalling from every department is being analyzed. The best financial teams are using Advance Analytics and Machine Learning to drive these innovations even further.

The emergence of XP&A for finance is exactly what has led to the industry moving beyond connected finance. Without having the systems, automation and analytics-driven processes in place, operational plans of enterprises are already experiencing forecasting inaccuracies. These inaccuracies grow exponentially the larger the company is, and the more widespread and disparate it’s current data systems are.

The core aspects of any effective intelligent finance platform is:

1. Budgeting, planning and forecasting
2. Close and consolidation
3. Performance reporting
4. Financial signalling

Conquering the complexity of business information, processes, and automation is the true power of intelligent finance.

What is the process to Lead at Speed?

Leading at speed is the process that OneStream has developed to conquer this complexity. Even further than just simplifying processes and building an efficient system for financial aggregation, consolidation and close is what OneStream terms as ‘right time’ finance. As discussed above in intelligent finance, the true power of effective finance teams is the ability to offer insights from financial signals. Instead of relying on the traditional cycles of monthly reporting, with the new Intelligent Finance theory and Leading at Speed, companies are moving beyond these static and restrictive cycles of 30-day intelligence reports to gain financial insights ‘right now’.

There are six major steps to conquering the complexity in your organization’s financial and operational management as outlined below.

1. Drive simple and efficient IT systems
2. Implement a fast and accurate financial close process
3. Align strategic, financial and operational planning
4. Empower decision-makers with insightful financial and operational data and metrics
5. Use Advanced Analytics to drive innovation even further
6. Ensure internal systems and processes are designed to support and enhance growth

These core six principles in Leading at Speed are critical components to the infrastructure needed in intelligent finance, which as illustrated above, is also what is driving profitability, innovation and market-share.

Why digital transformations are gaining speed

“87% of companies think digital will disrupt their industry, but only 44% are prepared for potential digital disruption.”

Moving to the cloud before the pandemic was already gaining speed in companies, because digital disruption was a real threat. You only need to look to ridesharing versus taxis, home sharing versus hotels, consumer payment systems, electric cars (Tesla) or space exploration to see the real results of disruption. The fact that only 44% are prepared, is truly the reason why more C-suites and CEOs are pushing the envelope of digital transformations as fast as possible. These transformations have become all-encompassing for enterprises including moving to the cloud, data aggregation and consolidation and financial and corporate performance management solutions.

Those businesses that have failed to implement technology at speed, are also being left behind as “digital-first companies [are] 64 percent more likely than their peers to have exceeded their top business goals.”

If you would like more information on OneStream or Ascend Partners, a globally renowned consulting and implementation team, contact us today.

Authors:

Peter Popalis, Co-Founder & Managing Partner

Colin Sawford, Co-Founder & Managing Partner

Sources:

https://acquire.io/blog/digital-transformation-statistics/

OneStream, “Taking Performance Management to the Next Level with Intelligent Finance,” white paper, December 2020.

OneStream, “6 Steps to Leading at Speed,” white paper, November 2020.

Peter Popalis and Colin Sawford, “Intelligent Finance in action,” Internal Interview, Ascend Partners, July 2021.