Intelligent Spending Drives Business Success
By Andy Watson
SVP and GM, Asia Pacific, Japan and Greater China, SAP Concur
Date: 5th June 2020
Finance leaders play a strategic role in organisations and are co-pilots of the CEO. With the proliferation of data and the rise of technologies capable of analysing vast volumes of information, they are increasingly being tasked to use data to think far beyond finance. They are often asked to provide the real-time, data-enabled decision support needed for everyone else in the company to plan and manage growth.
According to a Dec 2018 survey by McKinsey & Co, the CFO’s role has become significantly broader and more complex than it was even two years ago. For instance, the number of functional areas reporting to CFOs has increased from 4.5 in 2016 to an average of 6.2 today. The share of CFOs saying they are responsible for board engagement activities has increased from 24 percent in 2016 to 42 percent today.
The CFO is also the second-most-common leader, after the CEO, identified as initiating a transformation. Forty-four percent of CFO respondents say that the leaders of a transformation − whether it takes place within finance or across the organisation − report directly to them.
The challenge, however, is that most finance leaders don’t have the necessary data to do their new jobs. Neither do they have the time. Currently, a large chunk of finance teams’ time is taken up with day-to-day tasks, not strategy and looking forward – resulting in them not
being able to support growth.
Slower economy calls for greater efficiency
Finance leaders are becoming more involved in their firm’s growth strategy for one simple reason − growth isn’t as easy as it used to be. According to the International Monetary Fund’s (IMF) recent World Economic Outlook Update, global expansion across the board is under threat due to international trade pressures and a plateau in global growth that began
more than two years ago.
While CFOs play a critical role in driving organisational growth, inefficient manual processes and systems can hold them back and prevent businesses from keeping up with higher demand. And the larger a business grows, the harder it is to share data and collaborate.
Technology must step in to automate areas like travel, expense and invoice management. No employee likes to spend time filling out expense reports, and no manager likes to spend time reviewing and approving them. An integrated spend management solution can help firms intelligently automate manual tasks, which both frees up time for more meaningful work and improve experience for staff when applying for travel or submitting claims.
And instead of chasing after late expense reports, auditing reports to uncover compliance issues and manually reconciling invoices, intelligent automation frees up the finance team to spend more time diving into spending trend data so that they can understand how staff are spending, and seek new ways to trim costs.
Automation provides the much-needed visibility in policy making. With transparency into spend, finance leaders can better inform and educate the business on how to spend the right way. And instead of imposing policies from the top down which may lead to staff resistance, leaders can use data to listen and develop policies from the ground up. It makes employees a part of solving the problem.
By interconnecting spend data like itineraries, credit card transactions and Uber rides, intelligent automation can help give firms a unified view of where money is going and where employees are located around the globe, and help the company fulfil its obligations to manage the safety and security of its staff as they travel for work.
The key to effective spend management is to let automation provide controls without impeding employee choices. Staff should retain the freedom to select their flights, hotel and transportation – ideally using consumer apps like those they are already accustomed to in daily life – but then have the tools on the backend to provide oversight around compliance, fraud and duty of care.
Cloud-based tools provide several advantages, such as the ability to upgrade automatically with the latest tax and government regulations, ensuring the company is always working with the latest information. Cloud solutions also don’t require upfront investment in costly hardware or expensive upgrades down the road.
The last thing finance leaders need to work towards is to secure their IT department’s buy-in when deploying technology. The more the finance and IT teams can work together to standardise, simplify, connect and automate systems and processes, the more they can help drive the transparency and control needed for organisations to succeed today.
Subscribe to Digital CFO Asia today!