Amid evolving global tax and compliance requirements, it’s more crucial than ever for businesses to have their financial management systems in place. But few in APAC are prepared…
Finance and accounting (F&A) professionals in the region do not have complete visibility of cash-flow data, and a large percentage of them do not trust their organizations’ financial data.
This does not bode well for businesses, especially amid changing global tax and compliance requirements in an increasingly digital economy.
What’s the problem with our financial management systems and financial data? And what can we do to revitalize F&A? DigiconAsia spoke to Tammy Coley, Chief Transformation Officer, BlackLine, for some answers.
Amid evolving tax and compliance requirements, it’s more crucial than ever for businesses to have their financial management systems in place. Yet, BlackLine’s recent survey shows that a substantial portion of C-suite and F&A professionals lack complete trust in their organization’s financial data. What are some reasons for this lack of trust?
Tammy Coley (TC): Trust in data is a cornerstone of effective decision-making for F&A and the wider business. There are a few reasons for the lack of trust. Many respondents said the reason they do not have complete trust in financial data is because the data is from too many sources, meaning they cannot be sure all data is being accounted for.
Financial data often comes from various systems and departments, increasing the risk of inconsistencies and errors. For instance, over a third (37%) of Singapore respondents cited that data coming from too many different sources prevent them from being certain that all data is accounted for. This fragmentation contributes to a lack of trust in the overall financial data.
Additionally, many organizations are still reliant on manual and outdated processes for significant portions of finance and accounting work, such as clunky spreadsheets. The outdated systems also limit F&A teams’ visibility until month-end, hindering their ability to respond to market changes in real time and undermining trust in key financial processes and planning.
With so much talk in the last decade about digital business transformation, why are F&A teams in APAC still slow in adopting technology? What has been the impact on day-to-day business, such as cashflow management?
TC: The hesitance to adopt technology is often driven by a fear of disrupting existing processes that appear to be working well. This resistance is not unique to the APAC region but applies to other regions as well. The pace of technology adoption also largely depends on the individual company’s culture and leadership.
For some firms, there is a recognition that their current processes are inefficient, and there is a desire to modernize. However, these firms often face uncertainty about where to begin.
Successful adoption of new systems requires business leaders to prioritize timely and clear communication. Companies without a strong vision and the ability to drive change management through effective communication are likely to transition more slowly. The challenge of changing entrenched routines and managing the transition process also contributes to the slow adoption.
Many organizations acknowledge the importance of technologies like AI and cloud computing for enhancing business resilience. However, a quarter of companies in Singapore report not having the right skills within their F&A teams to effectively adopt these technologies.
The slow adoption of technology can have a significant impact on day-to-day business operations. Without advanced technologies, companies often lack visibility into their cash flow, which is crucial for making informed decisions and responding promptly to market fluctuations. This lack of confidence in cash flow visibility can lead to decisions based on inaccurate or outdated information, further complicating business responsiveness.
Additionally, manual processes increase the risk of human error, which can undermine organizational preparedness and decision-making. The high volume of manual, day-to-day tasks also leaves little time for proper financial planning and analysis, further exacerbating these challenges.
Why is change management critical for digital transformation projects?
TC: Deploying a new technology is the initial step in a digital transformation project, but its success hinges on effective implementation. Organizations must adopt a considered and strategic approach to ensure everyone is on board and maximize the software’s potential.
Change management is crucial for aligning all stakeholders, ensuring they understand the vision and goals of the transformation, and coordinating necessary efforts across the organization. It helps address employee resistance and concerns amidst significant changes to processes, tools, and ways of working. Hence, engaging and supporting employees who understand the everyday pain points can advocate for the transformation benefits. This inherently empowers employees to confidently use the new technology, towards a smoother transition.
Overall, change management ensures operational efficiency and increases the likelihood of meeting project objectives by minimizing disruption during the transformation process. It highlights the positive impact of automation through clear communication for a successful implementation.
How do you see AI revolutionizing F&A roles, and how should CFOs prepare themselves and their teams for the transformation?
TC: AI is poised to significantly reshape the F&A profession in positive ways. On a foundational level, AI has the capability to manage vast datasets and automate repetitive, routine tasks. By automating these manual tasks — such as data entry, financial calculations, reconciliations, and basic reporting — AI can empower F&A teams to streamline processes and enhance efficiency during critical periods like month-end closes.
This shift towards automation can also help liberate time for teams to focus on strategic analysis and higher-value work.
BlackLine’s survey revealed that more than half (56%) of organizations in Singapore worry about making decisions based on inaccurate or outdated information. AI can bridge this gap by improving accuracy and compliance with automation, thereby minimizing human errors in financial processes. Advanced algorithms and machine learning models are able to identify patterns and detect anomalies with ease, making it harder for fraudulent activities to take place.
Additionally, organizations are better equipped for quicker, more informed decision-making with real-time financial analysis and insights from AI-powered systems.
In terms of implementation, CFOs play a pivotal role in defining the strategic direction and managing the right resources for a seamless transformation. As a start, CFOs can prepare by fostering a culture of innovation within the organization and ensure that teams are equipped to harness the newly deployed technologies effectively.
This involves investing in automation technologies relevant to their needs and upskilling F&A teams in data analytics to collaborate alongside AI systems.
F&A roles and processes should be redesigned to incorporate AI, prioritizing tasks that benefit from creative thinking and strategic insight, ultimately enhancing operational efficiency.
