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The new generation of ERP software stands to revolutionise the modern finance function.
No longer is a company’s finance function simply tasked with retrospective reporting on commercial metrics and balancing the books. Today, Chief Financial Officers (CFOs) and their teams are being asked to deliver predictive, data-driven insights in ever shorter time frames to guide an organisation’s strategic decision-making.
The evolution of technology-enabled accounting and finance applications is reshaping the demands placed on finance teams. The ability to capture valuable data from across an organisation, gain a central view of business operations, and automate processes, has already created a new frontier. With new technologies promising even more radical change in the next five to ten years, the challenge is to keep pace.
For ERP solutions, the capability to integrate disparate business processes and data sources holds an often-unrealised opportunity. It can meet the demands placed on finance teams by providing a single view of all factors that influence the financial performance of a company.
Beyond integrating business applications, a modern ERP solution can use machine learning to automate routine business processes and be trained to apply business rules.
From accounting, supply chain, customer relationship management (CRM), human resources management and reporting requirements, a modern ERP solution can generate the insights that support crucial commercial decisions.
Too often, organisations rely on spreadsheets to ‘patch’ the gaps between data sources and systems that should otherwise be managed by an up-to-date ERP. This approach absorbs resources, delays reporting and increases the likelihood of data inaccuracies with research showing that up to 90% of spreadsheets can contain errors.1
A well-maintained ERP solution can help ensure that finance teams are confident in the veracity of the data they use, and in turn, the quality of the strategic insights they produce.
However, fully utilising a long-term ERP solution requires ongoing investment and continuous improvement, adequate staff training and organisation-wide commitment to using just one ERP solution, to maximise its potency.
Our personal finances are coming under greater control due to technological advances, and CFOs expect the same of their business solutions.
Advances in Artificial Intelligence (AI) and Internet of Things (IoT), supported by quantum computing that can underpin the next generation capabilities of AI, have the potential to equip finance teams with full visibility over an organisation’s financial management.
Deeper integration across previously siloed operations and applications, combined with the removal of manual data capture, could also deliver current and predictive financial insights, giving CFOs a complete and accurate financial picture of their organisation in real-time.
In today’s financial markets, information is abundant, but hard to synthesise and action in a timely manner. In the future, an ERP solution could predict a need for funding, put that request out to market and provide financial information to allow interested financiers (or their ERP software) to respond.
An ever-increasing pool of data is being collected and harnessed by ERP solutions. The continued move of these applications to the cloud is inevitable to protect confidential information about a company’s finances, staff, and customers from increasing cyber security threats.
Beyond data-protection, the use of AI and other technology brings unique challenges. For example, with decisions being made by an increasingly sophisticated AI – will an ERP software be able to explain how a decision was reached? Business leadership and Company Boards will be tasked with holding both their people and the ERP software accountable.
Elise Fairbairn is the Managing Director of Transaction Banking Solutions, Institutional Banking & Markets at Commonwealth Bank. Elise has extensive experience in the banking industry, spanning a variety of senior roles that have covered operations, front-line client relationship management, strategy, leading large scale business transformations, client research and transactional & trade, sales. Find out more about her on her LinkedIn page.
1PWC (2016), Spreadsheet Mistakes Issue No. 1. Retrieved 24 October 2019, from https://www.pwc.com.cy/en/Consulting/assets/spreadsheet-mistakes-issue-1-march-2016.pdf
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