Build a Stronger, More Resilient Business Through Digital Finance Transformation

Businesses around the globe have been rocked by the COVID-19 pandemic.

From shutdowns to supply shortages to drastic spikes in demand, uncertainty is the only certainty.

All of this turmoil has put finance teams at the helm – whether steering businesses through choppy waters or toward a bright horizon. Yet, despite the havoc, finance teams have a unique opportunity to redefine business strategy, operations, and technology in a way that will keep businesses resilient and flexible – whatever the future may bring.

With that in mind, SAP consulted with Andrea Yandreski, partner at Bain & Company to offer guidance to finance leaders on how to confidently navigate these disruptive times. The result is a six-strategy approach to building business resilience that is grounded in digital transformation.

The first step in preparing for uncertainty is scenario planning. While a wait-and-see approach might be tempting, it can leave you stuck with few options in an emergency. Finance should collaborate with leaders across the business to determine which scenarios could most greatly impact the business and come up with plans for dealing with each one. This way, no matter what happens, your company will be ready to act.

Once you have your contingency plans in place, it’s time to focus on strengthening your working capital. This means concentrating on balance sheets and cash flow management. For example, are your accounts receivable invoices being settled quickly? Are you making the most of payment terms and discounts? Are you unnecessarily tying up cash in excess inventory? Other ways to free up cash could be debt renegotiation or adjusting timelines for capital investment projects.

The next step is putting your cash where you need it most by improving visibility into company spend. The only way to enforce compliance and make sure spending is in line with business priorities is to have real-time insight into all your spend data. But this can be tricky when things like employee expense and vendor invoice data are managed manually and stored in siloed systems. Automating expense and invoice management makes capturing data from receipts and invoices simpler and also streamlines approvals and compliance checks. Plus, you can integrate with back-end ERP to give finance teams the real-time data and analytics they need to identify wasteful spending and guide better spending choices.

Enabling spend visibility leads us to the next strategy on our list – looking for cost savings opportunities. With these same spend analytics, finance leaders can clearly see spend areas that are not delivering strong returns and can better evaluate that spending in terms of whatever risks your company is facing.

The fifth strategy for increasing business resiliency is to eliminate low-value work, starting with processes that rely on institutional or individual knowledge or require manual work-arounds. By working with business leaders to reimagine those processes and eliminate or automate non-value-adding tasks, you will improve employee satisfaction and increase productivity – ultimately boosting revenue.

Finally, it’s important for finance teams to understand what is temporary and what is here to stay, then plan for new ways of working in the long term. Take, for example, the work-from-home paradigm. Many companies are realizing that remote work and virtual collaboration is a good fit – allowing people to be productive while also saving on business travel. The key will be for companies to have the flexibility to accommodate both scenarios for a hybrid model going forward.

Now that you know the strategies for building a resilient company, how do you put them in place?

The answer is through digital transformation of finance.

By automating processes and making it possible to work from anywhere, you keep your people and your business flexible and productive – come what may. Carefully planned digitalization also enables the process and data integration needed to give finance the visibility to control costs, optimize cash flow, identify savings opportunities, and plan for the future.

Finance leaders can spearhead the kind of transformational change required to make digitalization initiatives successful by aligning senior team members around identifying and enacting the most pressing digitalization priorities. They can facilitate change by helping determine the appropriate technology to accommodate needs and budgets and set appropriate timelines for rollout.

In these times of rapid change and uncertainty, standing still and hoping for a return to “normal” is simply not an option. The time to act is now. Finance leaders who position their businesses to most effectively weather the storm will not only minimize harm, but come out stronger.

Read our complete whitepaper on how to keep your business resilient. Then contact us for guidance on your digital finance transformation.

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