Making digital finance controllership a reality

As businesses in Thailand continue to adapt to the new realities in a world remade by COVID-19, operational disruptions and resourcing challenges have emerged amongst some of the top-of-mind issues for CFOs, many of whom have sharpened their focus on digital transformation, and the adoption of more digitised ways of working.

This shift is by no means new: Deloitte’s Thailand Digital Transformation Survey conducted in October 2019 before the onset of the pandemic, for example, revealed that 90% of executives recognised that their industries will face the major transformative impact within the next five years.

What appears to have been accelerated by the pandemic, however, is a growing interest amongst CFOs in digital finance controllership – or the concept of a specialised combination of accounting knowledge and flexible in-memory financial applications to modernise business data and logic.
 

From RPA to intelligent automation
In recent years, many finance functions have already begun to adopt the foundational tools of digital finance controllership, including the use of Robotic Process Automation (RPA) technologies. With the growing realisation of the limited applicability of RPA, however, many CFOs are exploring ways to scale these solutions and make them smarter.

Specifically, although RPA is useful for automating simple, repetitive rules-based processes, such as those relating to data collection, closing and consolidation, it is unable to support linkages within business units; as a result, enterprise resource planning (ERP) systems continue to grapple with challenges in automating their full end-to-end closing, consolidation, and reporting processes.

In their bid to become smarter, faster and more precise, finance functions are exploring the use of intelligent automation – a process that combines RPA with cutting-edge artificial intelligence (AI) technologies – to efficiently manage and integrate large volumes of complex, internal and external data, and in turn reduce their overall costs.

Such technologies go beyond simple task automation, and are capable of evaluating and responding to data in ways that previously required human intelligence. These include analysing millions of data sets, delivering the relevant information in a distinct format by leveraging data visualisation tools, and facilitating cross-functional communication and decision-making.

Furthermore, the use of intelligent automation also empowers CFOs with a greater capacity to prescribe more strategic interventions with new tools, such as predictive planning, self-service reporting, and cognitive agents.

By promoting a clean transactional data flow from the source directly to financial systems, including sub-ledgers and general ledgers, intelligent automation ultimately reduces the number of transaction-level variances that require manual reconciliation. Fragmented financial closings can now be replaced with a hub-and-spoke model, where applications can work in synchronisation within a single data source.

Embarking on the journey to digital finance controllership
Although the benefits of automation processes are clear, what is less clear is how finance functions can make this a reality. As CFOs embark on this journey, we believe that there are three key success factors that they will need to consider.

Firstly, as with all digital transformation efforts, organisations must develop a coherent enterprise-wide strategy. This requires the inputs from key stakeholders across both the risk and finance functions within the organisation, and a clear articulation of how intelligent automation can add value to the business. In the long run, this will increase the strategic alignment across the organisation, which will in turn translate into the desired outcomes of higher returns, greater cost reduction, and higher revenues.

Secondly, organisations will need to ensure that the necessary processes and infrastructure are in place to support and safeguard the implementation of these new platforms. These include not only cybersecurity infrastructure, but also mature process definitions, standards, and processes that will help to increase standardisation, and lead to higher gains in back office workforce capacity.

Finally, organisations must not ignore the human aspects that come with digital transformation. To ensure that their talent is able to understand the tools that intelligent automation offers them, and are ready to absorb and adopt these technologies, workforce retraining and reskilling will be required.

Looking ahead, the adoption of intelligent automation is only the first step in the journey towards digital controllership. As intelligent operations become the core components of finance functions, CFOs should also think about how they can stay ahead of the curve by incorporating other next-generation technologies, including but not limited to speech recognition, natural language processing (NLP), and machine learning (ML) capabilities, to truly reap the benefits of a digital organisation.

The views and opinions expressed are those of Montri Khongkruephan, Audit & Assurance Partner, Deloitte Thailand; and Joeyvoen Teo, Audit & Assurance Senior Manager, Deloitte Thailand, and do not necessarily reflect Deloitte’s view.