AI, Cloud, RPA can cut up to 35% off finance costs
by Bija Knowles
What is it that distinguishes world-class financial organisations and what do they do better than their peers? According to a report by the Hackett Group, the adoption of new technologies, including mobile computing, robotics (RPA), Cloud and artificial intelligence (AI), is a key factor. These digital technologies can reduce the cost of financial processes within large organisations by up to 35 per cent. The graph below shows that organisations considered to be 'top performers' or world-class, can reduce financial process costs by 21 per cent with a financial digital transformation. Their peers, companies that are not in the top-performer category, have an even greater opportunity to reduce the cost of their financial processes by up to 35 per cent.
The report – The Three Hallmarks of a World-Class Finance Organization – shows that the top-performers have a different approach to their adoption of digital technologies. This enables them to become more efficient and benefit from digital transformation opportunities. For example, the majority (91 per cent) of top performers agree or strongly agree that:
- digital transformation will fundamentally change the operating model of our business; and that
- digital transformation will fundamentally change our company's culture and our skills and talent needs.
3 paths to excellence and better financial metrics
According to Hackett Group, financial organisations achieve excellence through three pathways:
- They become leaner and more agile by freeing up funds for redeployment elsewhere in the company, with the ability to scale up or down according to demand.
- They adopt smart technologies and best practices by regularly re-examining their service model and investing in their people.
- They focus on the needs of their customers and other stakeholders, so change takes place from the outside-in.
The adoption of digital technologies helps finance organisations achieve the above three objectives in the following ways:
- finance costs (as percentage of revenue) are 44 per cent lower;
- they employ 45 per cent fewer full-time employees;
- error rates are 37 per cent lower; and
- they spend 15 per cent less time collecting and compiling data.
The digital leaders see marked improvements in their financial metrics, for example:
- there are 38 per cent fewer billing errors in finance customer invoices;
- finance is perceived as a valued business partner by stakeholders in 29 per cent of digital leader organisations compared with just 13 per cent of their peers;
- they spend 15 per cent less time collecting and compiling data versus analysing; and
- finance is perceived as agile in meeting business challenges by stakeholders in 65 per cent of digital leader companies, compared to 38 per cent among their peer group.
Click here for more information and to download the report.
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