The phenomenon of integrating new digital technologies across all business sectors has become more apparent as companies adapt to the challenges and opportunities arising from the pandemic.
With next-generation technology, such a transformation will help provide insights, automate processes and workflows, advance decision-making, and drive advanced capabilities.
The issue for companies that have yet to “transform” is no longer whether they should. It’s just a matter of when and how.
More companies will want to upgrade their Enterprise Resource Planning (ERP) domain to the latest suite in the next five years.
However, this transition is significant and requires significant investment, placing CFOs and the broader finance function at the center of decision-making. So much so that for many enterprises, ERP transformation focuses on the finance function over other parts of the enterprise.
This helps the finance function shift from day-to-day processes and workflows to a real-time mode reflecting the hour’s need. As a foundation for expansion, a digitized finance function will be crucial to manage the broader and more expensive ERP transformation of the rest of the organization.
Financial leaders approaching the transformation of ERP digital finance will face many digital finance technologies available in the market. CFOs will need to work closely with CIOs to find solutions that work best for the organization regarding key business priorities and enterprise architecture decisions.
On the road to success
Realizing strategic value drivers
Evaluating implementation costs against the expected benefits of efficiencies using target state ERP is critical. Companies should consider a Value Realization Model (VRM) assessment to identify potential quantifiable value levers and operational levers of ERP capabilities that help realize the value levers.
There should also be a clear understanding of the implementation roadmap, phases, timelines, and approach to assessing ROInt properly.
In addition, CFOs must stay on top of the latest ERP Finance innovations and prioritize the top ones that add maximum business value.
Predicting and avoiding expensive setbacks
Most organizations are saddled with a fair amount of technology debt and complexity – legacy systems are not easily compatible with the available digital technologies, leaving organizations bogged down in their innovation agenda.
The organization can leverage the best architectural innovations by adopting a bimodal approach while simultaneously upgrading legacy systems in phases.
The idea of waiting for all legacy applications to be upgraded/replaced is no longer an option to keep up with the competition.
Alignment around an intended business model
ERP transformation is an opportunity to financially align the entire enterprise around a proven set of simplified and standard global processes.
The intended business model should include clear definitions and guidelines for corporate finance, especially about rationalizing organizational structure, harmonizing charts of accounts, and standardization of global processes – with a focus on ERP as a single source of truth for reporting and analysis.
Reap the benefits
A digitally transformed finance function
With an intelligent ERP, it is possible to enable faster and easier month-end closings through the universal magazine to provide a single source of truth. Because all data is stored in the universal journal, there is no reconciliation between different data sources, resulting in a much faster and simplified period-end closing. Group reporting also enables real-time financial consolidation and provides a detailed view of the business at any point in the period.
It also provides a seamless process between the local and group closing activities, as both use the same data source, speeding up the closing process and leaving more time to analyze and act on the results.
Scale for growth with AI and machine learning
Intelligent insight capabilities help organizations proactively determine trends and patterns to perform Resource Consumption Accounting, real-time planning, closing, and budgeting. AI and machine learning capabilities enhance support through data visualization to enhance data modeling capabilities and deliver deeper insights using reports about the future.
The automation empowers finance and accounting teams to save several hours of labor-intensive work and effectively scale for growth by leveraging algorithms to automate budgeting and forecasting and drive business-critical insights.
As CFOs guide their organizations through this transformation journey, they must know the business case and the innovation they seek. In prioritizing the company’s needs and wants during the transformation process, CFOs play an important role in charting the future of a highly successful company.
To learn more about how Infosys has helped more than 250 customers on their transformation journey and for an overview of our services, visit Business & Digital Transformation With SAP – Success Stories and SAP S/4HANA System Implementation & Migration Services.
