The economic impact of COVID-19 is like nothing we’ve seen in recent memory, and many CEOs and CFOs are laser-focused on ensuring their financial houses are in order. This leads to an operational strategy that prioritizes short-term needs — such as cash flow — over longer-term strategy. However, COVID-19 and the subsequent shift to remote work have actually made an even stronger case for automation and paperless processes in finance departments everywhere.
Is now the right time to invest in automation?
Given the massive economic uncertainty caused by the COVID-19 pandemic, many executives would say “no.” In fact, 50% of CFOs intend to scale back or delay planned investments, and prevailing wisdom says this is a time for tightening the belt and circling the wagons rather than investing in transformative tech. But what if that’s actually holding you back?
Technology has been critical throughout the pandemic, helping companies pivot to remote work, attract customers looking to try more convenient brands and services, or scale supply chains. This moment simply confirms that today’s companies run on technology, even if 79% of those embarking on digital transformations are still in the early stages of their journeys. If anything, COVID-19 underlines the need to transform even faster. That means embracing automation rather than pushing emerging solutions to the wayside.
It’s exactly what companies need right now: a technology-based solution that accelerates business visibility, enables agility when it comes to shifting business needs, and institutes smart financial controls. It also allows companies to reduce headcount or do more with existing staff. In short, it’s not a question of whether a technology investment is warranted right now — it’s about what that investment can do for your financial operations.
Benefits Spanning Industries
It’s no wonder why past recessions have led to increased automation. These projects are becoming more common with each subsequent downturn, and executives have already deployed automated technologies to manage this economic shift: In one instance, an airline that normally processed 500 refund requests daily saw that number spike to 4,000 once COVID-19 hit and customers canceled their flights in droves. Instead of multiplying the number of customer service representatives to deal with those refund requests, the airline explored automation that could perform the same work quickly, inexpensively, and effectively.
In yet another instance, Eastman Chemical relied on customer relationship management automation to seamlessly make the switch to remote work. Despite the significant disruption posed to its industry by COVID-19, the company is on track to save as much as $40 million this year thanks to early investments in automation and other tech-based productivity tools.
Far from being unnecessary or unjustified, automation proves to be exactly what companies need in the face of sweeping change: a way to adapt to the ever changing times quickly and efficiently.
Applying Automation for Maximum Impact
When looking for ways to deploy automation, it’s critical to focus on how it can solve the problems of the present. Here are some pointers your team should consider when getting started:
Reduce financial workload. Manual financial workloads leave executives waiting for the insights they need to make intelligent, well-informed business decisions. According to research from McKinsey & Co., as many as 61% of all financial activities can be fully or partially automated. That means a smart technology investment could eliminate hours of work while enhancing and expediting the decision-making process.
However, there’s still a significant gap between what’s possible with automation and how financial departments actually use it. Just over one-third of finance tasks are currently automated, according to research by Accenture, meaning executives shouldn’t wait to have open-minded conversations about how to ease up their workflows.
Streamline global operations. Supply and demand are currently disrupted across the board, meaning executives need a payments platform that’s flexible, scalable, and secure. Automation helps on all of these fronts so payments continue to flow freely and independently. This also frees up your finance teams to focus on more pressing tasks where you need their expertise the most. With a faster financial close, for instance, finance teams can focus on analyzing data to present actionable insights to the executive team.
Accelerate close cycles. As executives scramble to put out fires (and prevent new ones from starting), routine obligations such as financial reporting and closing processes can easily be neglected. With the annual close, in particular, accountants can easily be overwhelmed by multiple closing processes that take attention away from critical daily operations and make the entire annual close a drawn-out process.
While low-performing companies take an average of 45 days to complete their annual close cycles, for instance, top performers need only 15. The difference here is with efficiency. Companies that run these workflows on autopilot ensure the pressures of the present don’t cause them to fall behind. Likewise, they can spend more time analyzing key results and business trends that could help them make informed business decisions.
Enhance visibility. Of course, monitoring cash flow is critical in times of economic uncertainty — and financial transparency is often the key to success. According to a survey by The Hackett Group, more companies are making an effort to focus on working capital and overall liquidity post-COVID. These initiatives are meant to address unexpected performance declines and debt growth at the beginning of the pandemic.
Because automation enhances visibility across business units, geographies, and time periods to illustrate every dollar flowing in or out of the company, it could certainly present a solution for companies looking to transform digitally and shore up their workflows.
Everyone anticipated automation would reach a tipping point in the business community; it was simply a question of when that would happen. Now, we have an unexpected yet emphatic answer: This pandemic has forced executives to question every assumption and prepare for a drastically different future. This means the time to make planned technology investments and automate tasks is now.