BPM IN F&A THE DIGITAL CFO PARTNERING THE BUSINESS IN GROWTH. xchanging.com BUSINESS PROCESS MANAGEMENT 1

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1 THE DIGITAL CFO PARTNERING THE BUSINESS IN GROWTH xchanging.com BUSINESS MANAGEMENT 1

2 The changing economic landscape has transformed the role of a Chief Financial Officer (CFO). No longer a financial gatekeeper or someone who manages the account books, the CFO has evolved into a strategic business partner; someone who aligns business and financial strategies to help the CEO achieve sustainable business growth. As businesses emerge from the aftermath of the global economic downturn, the CFO s role is under intense scrutiny, both internally and externally. Under pressure to reduce costs and grow revenues, the CFO is required to ensure adherence to complex regulatory requirements; provide finance and accounting applications access to mobile workers; help stakeholders derive intelligent business insights from large complex data sets; and make processes more efficient. To address these challenges, the CFO needs to evolve into a technology evangelist someone who leverages technology to manage complexity, identify growth opportunities to steer the organisation to success, and unlock business value. DIGITISING THE FINANCE FUNCTION THROUGH TECHNOLOGY Standard processes Stock administration Focused metrics Cost reduction Asset utilisation Digital dashboard MEASURING PERFORMANCE ENABLING EXTERNAL PARTNERSHIP Scheduling shaping Pay-on-receipt E-commerce auction Cash management TECHNOLOGY Knowledge transfer Planning, forecasting, budgeting Profitability analysis Case management Cost analysis Risk management PROVIDING DECISION SUPPORT AUTOMATING TRANSACTION Standardise systems Cost reduction Efficient process flow Web-enabled processes Capital rationalisation Analysis tools 2 BUSINESS MANAGEMENT

3 WHY BUSINESS MANAGEMENT? As the Finance and Accounting (F&A) processes are at the core of any business, the CFO is focused on making these processes more effective and efficient. Understandably, the CFO is considering using Process Enhancement Technologies and Services (PETS)*, that F&A business service providers offer using a large portfolio of applications and services. Business Process Management (BPM) is a management approach that allows you to manage, improve and transform processes. However, manual process reinvention is time consuming, labour intensive, and prone to human errors. F&A teams are under constant pressure to demonstrate process compliance, sustain employee productivity, provide F&A applications access to the field employees, as well as, make changes to processes in real-time (based on data analysis). This is where technology-enabled Business Process Management for the F&A function comes in to help you automate and define process rules, thus helping address the challenges of a highly volatile business environment. Technology-enabled BPM delivers operational efficiency, improved employee productivity, compliance control, business visibility and enhanced organisational agility, thus giving you an edge over competition. Not surprisingly, it finds favour especially in processes requiring collaboration across multiple systems and teams, rule-based decision making, and transactions requiring a full audit trail. AUTOMATING ES FOR GROWTH PLANNING AND STRATEGY REFINEMENT ANALYSIS OF BUSINESS ES TECHNOLOGY-ENABLED BPM MONITORING AND CONTROLLING DESIGN AND MODELLING OF BUSINESS IMPLEMENTATION * Sourced from Gartner report xchanging.com BUSINESS MANAGEMENT 3

4 FASTER RESPONSE WITH TECHNOLOGY-ENABLED BPM By allowing you to identify process bottlenecks to streamline F&A processes, technology-enabled BPM helps in achieving enhanced productivity and improved operational efficiency, thereby improving your response time to internal stakeholders and dynamic market requirements. Various F&A processes like Procure-to-Pay, Order-to-Cash and Record-to-Report require processing of several steps before transaction completion in the workflow. For instance, an accounts payable invoice is segregated (based on pre-defined fields), coded (to the relevant approval authority) and an entry is made in the account books, before being sent for approval. In the scenario that these tasks are managed manually, there is loss of employee productivity, possibilities of human errors (while making entry) and most importantly, the likelihood of non-compliance with industry regulations. Not surprisingly, enterprises are driving technology-enabled BPM to automate the routine workflow tasks, to save precious man hours and raise employee productivity. In addition, organisations are also integrating mobility-based solutions with technology-enabled BPM to drive enhanced productivity, improved internal collaboration and quicker decision making. This allows you to focus energies on managing your core processes and raise enterprise-wide performance. Xchanging s technology-enabled BPM helped a leading global HR consulting firm enhance its operational performance, with its operational cost being reduced by 40%. In addition, the firm also saw an increase in payroll maintenance productivity from 35 to 50 cases per day, due to the automation of audit trail report. DRIVING IMPROVEMENT IMPROVEMENT STANDARDISATION Of organisational agility Of internal collaboration IMPROVEMENT STANDARDISATION Of the process workflow Of documentation EXECUTION AUTOMATION Of increased regulatory compliance Of quicker decision making EXECUTION AUTOMATION Of data processing Of forms creation Of defining access rules 4 BUSINESS MANAGEMENT

5 DRIVING REGULATORY COMPLIANCE WITH TECHNOLOGY-ENABLED BPM Over the last decade there has been an unprecedented increase in the number of industry regulations such as Sarbanes Oxley, Health Insurance Portability and Accountability Act (HIPAA), Payment Card Industry (PCI) Data Security and Dodd Frank. This has resulted in increased pressure on the CFOs to demonstrate adherence to these norms. In addition, with low acceptance levels for any corporate indiscretion, the onus is on the organisations to not just be compliant, but also demonstrate compliance by presenting proof of compliance. To do this, there needs to be a clear decision making process to explain how the final position was reached. Technology-enabled BPM helps enterprises reduce the risk of non-compliance, by identifying potential compliance breach issues. This is done by automating compliance controls, which limit the possibility of any unauthorised access to sensitive business data. Only authorised users are permitted to take specific actions and only a pre-decided group can take those actions. This facilitates an audit trail and demonstrates that a regulatory compliant approach has been followed. Technology-enabled BPM ensures that all processes are implemented according to an organisation s pre-defined standard operating procedures; the CFO has the requisite documentation proof to substantiate the compliance. YOUR KEY TO THE COMPLIANCE LOCK TECHNOLOGY-ENABLED BPM Monitors document status Provides data audit trail Process and workflow automation facilitates electronic approval of documents Allows users to define and manage system access Identifies and rectifies possible process compliance breaches* *Through Executive Dashboard (project status) and BPM Accelerator (project summary and detailed compliance reports) xchanging.com BUSINESS MANAGEMENT 5

6 DRIVING ENHANCED REPORTING WITH TECHNOLOGY-ENABLED BPM Attempting to capitalise on emerging opportunities in a recovering market, the CFO is seeking intelligent and deep data insights into internal processes. For this to happen, an integration of process and analytics to receive real-time updates is needed. Technology-enabled BPM along with process analytics allows you to monitor project related activities, access performance and workload metrics of the processes, and map how to transform processes (based on particular data insight). This will help you streamline your process workflow and assist in leveraging growing data volumes more effectively, for realising sustained revenue growth. In addition, analytical tools and algorithms turns data into an easy-to-understand format through Dashboard Reporting. This allows decision makers to see areas where savings can be made, deliveries improved and suppliers better managed. According to Gartner, intelligent BPM systems (ibpms) are the next evolution of technology-enabled BPM, which will see incorporation of more analytics and other technologies into process orchestration. This will enable the CFO to have more intelligent processes by improving the situational awareness of business decision-makers. By using mobility technology, reports and dashboards (offering enhanced business insights) can be made available to the CFO s on-the-move stakeholders, resulting in faster decisions. 6 BUSINESS MANAGEMENT

7 THE ROI By investing in technology-enabled BPM, you can initiate a sustainable process improvement programme. A key benefit is that enterprises can modify the processes, to suit dynamic business environment. TECHNOLOGY-ENABLED BPM: DRIVING AGILITY, TRANSPARENCY AND EFFICIENCY Adapt quickly to business needs Continuous process improvement Reduced process cycle time AGILITY TRANSPARENCY Increased regulatory compliance Identify fraud and misreporting EFFICIENCY Faster decision making Improved accuracy Continuous process Improved productivity xchanging.com BUSINESS MANAGEMENT 7

8 AUTHOR Srinivas Rajamanuri Associate Vice President, F&A Practice Xchanging.com REFERENCES AMERICAS 281 Winter Street Suite 380, Waltham, MA 02451, USA Phone: +1 (781) EUROPE The Walbrook Building, 25 Walbrook, London, EC4N 8AQ, UK Phone: +44 (20) ASIA-PACIFIC Xchanging Towers, SJR ipark, EPIP Area, Whitefield, Bangalore, , India Phone: +91 (80) 3054 linkedin.com/company/xchanging facebook.com/xchangingplc 2014 XCHANGING OCT.14 xchanging.com BUSINESS MANAGEMENT 8