The Future Of Digitized Workflows In Corporate Finance

Havell Rodrigues, Fintech Entrepreneur and Co-Founder/CEO of Adjoint Inc.  Getty The Covid-19 crisis is clearly accelerating digitalization. It is forcing managers to rethink the role of technology in automating multiparty workflows, ensuring teams can work efficiently from anywhere and with the highest possible data security. It is an opportunity for them […]

Havell Rodrigues, Fintech Entrepreneur and Co-Founder/CEO of Adjoint Inc

The Covid-19 crisis is clearly accelerating digitalization. It is forcing managers to rethink the role of technology in automating multiparty workflows, ensuring teams can work efficiently from anywhere and with the highest possible data security. It is an opportunity for them to create flexible and secure processes that enable them to be nimble and play a strategic role in their organizations as they navigate their way out of this crisis.

Legacy Issues

Corporate finance teams have chugged along with old legacy and rigid systems with all sorts of workarounds, using spreadsheets and emails to get the job done. Where things stand, in terms of a process, is often in the heads of the team members, as opposed to a dashboard that’s accessible to all stakeholders. In some cases, like intercompany loan documents, paper documents are filed away, and only the folks who were involved in the process have knowledge of their existence. 

Often seen as a cost center, they have been deprived of innovation and investment. Companies are further dependent on armies of expensive implementation consultants to make changes to these systems as their organizations evolve. This is time-consuming, expensive and impractical in a post-Covid-19 world where on-site access is often required to make changes. 

RPA Is Not Enough

Robotic process automation (RPA) has helped deal with legacy systems by automating simple, repetitive and mundane tasks. However, RPA falls short of truly automated complex processes that require interaction with other systems through application programming interfaces (APIs) and involve multiple parties signing off on transactions. It’s not very scalable or reliable because it cannot adapt to user interface changes.

RPA also has security issues when it comes to the storage of passwords and credentials, and often, a ready audit is not available to understand what RPAs are doing inside an organization. While they do create value in the short term, they can create technical debt in the long term.

The Need For Truly Digital Business Process Management 

Covid-19 has put liquidity management front and center as the survival strategy for corporations. This has, in turn, put the onus on CFOs to ensure they have the right processes in place to manage their financial operations and invest in optimal technology solutions.

So, to future-proof their investments in modern digital process management tools, what should CFOs look for? Here is a brief checklist: 

No-code methodology: Ideally, it should allow finance professionals to create workflow templates. This is a good requirement for finance departments to attract and retain millennial employees who can take initiative to modernize their organizations.

Finance-friendly: For example, the data captured should be able to be used for calculations, and formulas should be able to be expressed. Loan amortization schedules, tax calculations, etc. can be automatically generated. Basically, eliminate the dependency on Excel spreadsheets.

Visualization of workflows: Stakeholders should be able to visualize the steps while creating workflow templates to provide full transparency into the workflow process. Workflow templates can then go into production after the CFO or controller approves them. 

Contract templates: Contract templates provided by the legal department should be accessible by the workflow. The templates should have metatags that are filled as part of the workflow execution. For example, principal, interest rate, repayment dates, etc. can automatically populate a contract template so that the template can be executed within the workflow, with signatures incorporated into a final PDF that is stored on the platform. 

API-friendly: The platform should be able to pull and push data from existing systems, especially ERP systems. No more copy-and-paste or manual entries. This is especially important when a particular workflow generates accounting entries or to allow workflows that use ERP-based data to be triggered (e.g., multiparty invoice payment approvals).

Cross-department, role-based access: This is needed to enable cross-department (finance, treasury, legal, compliance, etc.) processes, as well as to ensure the “four eyes” principle is incorporated as a guardrail for fraud prevention.

Automated notifications: Stakeholders involved in a workflow step should be automatically notified via email or SMS to ensure smooth executions or to unstick processes. Dashboards can also be used to keep track of workflow executions.

Audit-friendly: All workflow interactions by individual stakeholders should be time stamped, with all comments captured (instead of sitting in emails) and all documents used in the process made accessible as part of the executed workflow. 

Cloud accessibility: This is important for remote workers, especially after Covid-19. It also future-proofs applications for machine learning. 

SaaS-delivered: This allows new security-approved features and functionalities to be automatically delivered.

The initial steps to take include testing such types of digitized workflows in a sandbox environment with simple workflows and a limited set of users. After piloting it internally and getting comfortable with the platform, the finance department can look at using the same platform to execute workflows with external parties, unlocking more value from this investment. The data generated from this platform can also be used by machine learning algorithms for fraud detection or to serve as a recommendation engine. 

Going through the process of digitizing automation is a good opportunity to revisit the “job to be done” (JTBD). What stakeholders are trying to accomplish in a given circumstance has to be considered. There is no point in digitizing a process just because “that’s how it’s always been done.” Remember, you are not trying to get a robot to do a job that was previously done manually. The “what” and the “why” are important and should come before the “how.”

It’s time corporate finance departments take a good look at their internal operations to understand what can be automated, what processes need to be put in place that can be digitally tracked and, once automated and digitized, what additional value can be flexibly delivered to their organizations. I look forward to seeing how CFOs embrace the technology mantle to lead their organizations.

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