Three Ways External Partners Help Accelerate Financial Transformation

Fredrick "Fritz" Smith
By Fritz Smith | March 3, 2022
About Fritz

How to effect an effective financial transformation:

Step 1: Work with an expert.

That’s it, that’s the list.

All facetiousness aside, the breadth of activities and cultural change involved in transforming a company finance function and processes to digital efficiency doesn’t preclude doing it on your own. But making the effort to achieve financial efficiency more…efficient, really warrants having an experienced team of financial digital transformation experts working with you.

This is especially true as regards cash flow visibility, control, and forecasting, as explored in a recent commissioned study conducted by Forrester Consulting on behalf of Corcentric on transforming finance through holistic cash forecasting. As the research makes plain, the financial planning systems and processes that finance teams rely on are a long way from optimized (many are still mired in manual financial processes). On top of that, functional accounts receivable (AR) and accounts payable (AP) silos are exacerbating the problem.

Obviously, this is not the ideal scenario for undertaking a financial business transformation without the help of outside partnerships. It’s not impossible, it’s just complex.

Note to the CFO: Transforming Finance means prioritizing goals.

Compounding the complexity mentioned above is the somewhat overambitious finance organizations to-do lists cited by many CFOs and financial leaders in the Forrester survey:

Base: 633 director-level and above payment strategy decision-makers in the US, UK, and France

Achieving any one, or maybe two, of these financial objectives in a 12-month period would take a major effort and be quite an accomplishment. But like any to-do list, you have to decide what’s reasonable and possible within your business model and current business environment. Working with an external partner to hone your finance transformation agenda will go a long way towards prioritizing what you can and should do, and in what order.

The first consideration a CFO or financial leadership team may want to make is moving up “Accelerate our digital transformation initiatives” to the top of the list of imperatives. Checking that goal off is going to make accomplishing the others that much more streamlined and productive.

To that end, here are three ways leveraging the competencies of an external partner can help accelerate your digital transformation roadmap.

1. Finance Transformation Management: Objectivity needs an external perspective.

Change management is a long-established discipline with an extensive tried-and-true set of best practices, strategies, KPIs and benchmarking. Unfortunately, any similar culture around “transformation management” is at best nascent.

For many, if not most companies – even large, established corporations – true finance process transformation is uncharted territory. Even the best intentions of tackling a transition of this magnitude internally are likely to take longer, cost more, and end up short of the ultimate goal of holistic cash forecasting.

As the Forrester research reveals, comprehensive digital solution partners provide an unbiased, objective perspective on where and how to best implement a successful financial transformation. In addition to bringing in proven best practices, experience, and track record, external transformation experts fill any gaps that an organization may have in its internal capabilities.

This collaborative inside + outside approach establishes the right balance of tapping insider knowledge while filling any internal expertise gaps to help companies accelerate their cash flow optimization journeys. Although approaches vary according to the Forrester research, 85% of companies are engaging or plan to engage a managed service provider to guide their holistic cash forecasting efforts. More telling, fifty-two percent are seeking a partner to provide everything from software to implementation and managed services.

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2. Call It Digital Enablement Instead of Digital Financial Transformation.

One of the reasons so many companies have yet to fully embrace financial transformation is that they’re too focused on the process itself, not the desired outcome. Or the term just seems a bit amorphous, and buzzy. You have to decide what results you want to achieve before setting about transforming the processes around them.

“Digital transformation” is simply an all-encompassing name that describes the implementation of new technology, processes, and people in order to enable streamlining business processes, improving customer and supplier experiences, and achieving specific, sustainable metrics. Like holistic cash flow forecasting, automated invoicing, three-way matching, payments, supply chain objectives, etc.

It’s important to note that financial transformation / digital enablement is not just a digital technology issue. It requires moving away from conventional thinking to reimagine a more collaborative, open-minded approach with all relevant business units, internal stakeholders, and even business partners. Working with an external partner facilitates (and motivates) the adoption of new and different ways to approach existing work processes which – more often than not – uncovers unexpected and better solutions.

Not surprisingly, these solutions and the process of getting there can actually go a long way toward achieving some of those CFO business goals on the list above. This is especially true for improving employee and customer experience, enhancing the ability to innovate, and improving the use of data for better decision-making.

3. Replace AP and AR silos with seamlessness and automation.

As mentioned at the start, siloed financial process workflows are further complicating and stonewalling the need for CFOs and finance leaders to realize the full benefits of real-time holistic cash forecasting, budgeting, data management, and other key functions.

Finance organization silos are generally not intentional, but often simply the result of legacy processes, inadequate human resources, and / or lack of AP / AR automation and a reliance on slow, cumbersome manual processes (a serious risk management issue) for invoices, receivables, payments, and the like. This can be just as true for startups as it is for large, established corporations.

This is where technology plays a critical role, and why having an external partner with both robust AP and AR invoice automation software AND expertise with your particular industry’s operating models is paramount. As the Forrester research shows, the right technology partner can help drive a successful and complete financial transformation.

The survey revealed that many companies lack the resources and expertise for automating AP and AR processes within their current back-office technology and ERP ecosystem. That’s why engaging an external partner who provides financial software implementation, Transformation Management expertise, and ongoing managed services capabilities is how to accelerate the financial transformation success that will ultimately lead to achieving holistic cash forecasting.

If finance transformations are hard, then digital transformations are exponentially so. Finding the right partner will simplify the complexity, streamline the entire procedure, and get your financial organization on the path to unlocking the working capital and revenue streams (and post-pandemic profitability) that will help achieve sustainable strategic business objectives.

To learn more, talk to us about helping you make a solid business case and download this Corcentric-commissioned study from Forrester, The Future of Finance: 360-Degree Cash Flow Visibility and Control.

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