4 Criteria for True Finance Transformation

Febrero 28, 2019
Dory Malouf
4 Criteria for True Finance Transformation

Today’s CFOs and treasury executives are leading their organization through increasingly unpredictable economic headwinds. Against this volatile market environment, finance executives are required to make faster and more effective business decisions that protect the organization against loss, as well as enable growth opportunities. As a result, real-time solutions that empower finance leaders with superior visibility and intelligence into their cash and liquidity are becoming increasingly popular. However, many organizations are not equipped with a solution that truly empowers finance leaders.  

Here are four outcomes that CFOs should use to validate and spark real finance transformation:

  1. Productivity enhancements that deliver competitive advantages over industry peers
  2. Real-time visibility, including business intelligence capabilities
  3. Systematic enforcement of internal controls
  4. The ability to advance cross-functional strategic business partnerships

Let’s take a deeper look at why these outcomes are essential to accelerating growth in a volatile marketplace.

Increased Productivity with Automation

Productivity is not just about the time savings through automation. The objective is to transform your finance team’s output into a competitive advantage over your industry peers. Automation, ease of scalability during rapid expansion, standardization across regions and teams internationally, security protocols to protect against cybercrime and data security, audit reporting to ease compliance burdens are hallmarks of productivity. Kyriba has many success stories that demonstrate many of these benefits. Check out one example from HCSC.

Related reading: How HCSC Created a High-Performance Treasury

In addition to client case studies, a Kyriba business analysis of 217 organizations who use a TMS found significant performance enhancements, including time and cost savings. The study found that automation and standardization saved more than 450 hours per month, or the equivalent of 57 cross-functional workdays per month. Below is a breakdown of the cross-functional days saved per month, according to the analysis, conducted by Kyriba’s value engineering team:

  • 25 days for cash management and forecasting
  • 16 days for cash accounting and reconciliation
  • 11 days for payment related workflows

Savings from deploying a TMS according to The Kyriba Business Value Analysis Study, 2018:

  • $2.5M - The average annual all-inclusive return from deploying a TMS
  • $126K – The average annual savings on bank fee analysis fees
  • $107K – The average annual savings on FX translation
  • $745K – The average annual net interest optimization benefit, derived from 46% reduction in idle cash

The value generated from a TMS deployment is significant and is easy to demonstrate. Kyriba value engineers offer a business case analysis and consulting to qualified companies that demonstrates the savings and benefits a TMS can offer to your company.

Real-Time Visibility

As manual processes are streamlined, more time becomes available for reporting and analysis. For example, Kyriba Business Intelligence goes beyond traditional management reporting by offering data visualization and interactive dashboarding to transform financial data into actionable information. With immediate and dynamic reports, business intelligence offers visual insights that are not possible with spreadsheets. Users can get instant insight into strategic questions such as “What risks are my cash flows exposed to?”, “Has our bank rationalization project met our bank fee reduction metric?” or “Are my global cash forecasts reliable?” Unlocking opportunity with real-time analyses enables senior finance leaders to improve opportunities in any market environment.

Systematic Internal Controls

With a TMS, treasury can have a lot of fun with strategic analytics in support of driving company growth. Locking down and securing cash is another supporting function that a TMS can help to manage at scale. A TMS can centralize and automate payments and enhance payments workflows with real-time fraud screening capabilities to help reduce loss in three ways:

  1. Enhanced financial controls to prevent payment fraud, human error and other operational risks 
  2. Reduce financial risk with real-time centralized visibility of cash forecasts and management of FX exposures
  3. Systematic enforcement of cash accounting and process compliance

Many companies prefer to think that loss from payment fraud and cybercrime is an IT problem. There are stunning reports that suggest the opposite. Seventy eight percent of companies reported payment fraud attempts in 2017, and of these attempts 46 percent were successful. Of the successful attempts that resulted in financial loss, 92 percent resulted in losses as high as 0.5 percent of revenue. Increasing hedge coverage from 50 percent to 75 percent protects $1.25M per $100M in revenue for every 1 percent increase in USD. The value of treasury locking down payments fraud is real and measurable with the right system in place.

Ability to advance cross-functional strategic business partnerships

Treasury enabled by a leading TMS can better manage processes, improve reporting and visibility across the organization with business intelligence, and lock down threats with systematic controls. As the curator of business insights that drive value across the organization, treasury is the go-to trusted advisor. According to Deloitte’s 2017 Global Corporate Treasury Survey, 80 percent of CFOs say they need the treasurer to be the strategic advisor to the business. There are many scenarios where treasury has a primary role in accelerating cash movement to fund growth: When a new project is proposed and capital needs to be found; when the company prepares to buy-back shares; when a company looks to extend DPO without impacting supplier relations; or if a series of mergers and acquisitions are in play, treasury is in the best position to offer guidance on how and when it is feasible to fund these projects.

Conclusion

Market volatility and protecting against loss for multinational corporate CFOs and their treasury teams will be an ongoing priority. Where CFOs are called on to be the strategic leader for the organization, their treasury teams will be required to improve decision support. In this role, treasury is becoming the trusted advisor for the CFO, and acts as a business enabler to multiple functions within the organization. While treasury professionals are highly educated and specialized finance professionals, their ability to deliver on these demands is nearly impossible at scale without the right technology solution. Today’s treasury teams have a great opportunity to take create competitive advantages for their organization, and accelerate growth opportunities.