The Rise of the Cyborg Financial Officer

Keshav Murugesh is chief executive at WNS and chairman of the Nasscom BPM Council, India.

The rise of new technologies is drastically redefining both the responsibilities of chief financial officers and the way they work.

Having donned the CFO’s hat myself a few years ago before I moved on to heading companies as chief executive, I can say with all honesty that the role of today’s CFO has never looked so different from the traditional perception, writes Kevshav Murugesh. From guardian of the company accounts and finances to shaping overall company strategy, today’s CFO needs to have more strings in his / her bow than just a good head for numbers. A CFO has to have a knack for management, strategy, risk management, and more importantly, alignment with technology.

CFOs often find themselves wading through oceans of data to fight complexities with growing the top- and bottom-lines, staying ahead of competitor activity and the regulatory environment, aligning wide-spread technology needs, M&A activity and ensuring business agility in the face of all of these factors.

And, on top of all of this, modern day CFOs must make sure they are still covering off the needs of the traditional role.

Technology and the CFO

In today’s competitive environment, the CFO’s secret to success is to operate with some form of technology automation and enablement. For the most part, this comes in the form of an ERP system, which can be relied upon for the planning, controlling and checking of value flows across the organisation.  Unfortunately, despite hefty investments in ERP technology to date, increased business demands and maturing processes have led to the inherent limitations of ERP in achieving end-to-end automation being exposed.

In general, these weaknesses are most prevalent when the modular nature of ERP comes up against new business needs, which are not accounted for, by current systems. Sadly, these new business needs are symptomatic of the changing role of the CFO.

When these limitations are up against legacy systems, there is a temptation to deal with exceptions outside of the ERP application, often through manual and paper-based systems. In turn, this leads to its own set of problems, with manual processes causing bottlenecks and, in the worst cases, audit and control issues. But this needn’t be the case – there is a better way.

Instead of manual workarounds, CFOs embracing the rapid pace of change can look to use what industry analysts call PETS – Process Enhancement Technologies and Services. PETS are designed to slot into ERP systems and reduce workloads and operational expenditure, while simultaneously bringing down the frequency of human error. At WNS, this is an area we support with a number of our financial services customers, to enable informed decision-making at a strategic level.

It is easy to overlook PETS as an additional cost centre, but this would be to ignore the huge benefits that they have been proven to have. At WNS, our own internal studies have shown that productivity, cost-reductions and efficiency can be improved by up to 30% with a PETS deployment.

Finding Helpful Partners

The benefits of efficiency and innovation that PETS bring can be amplified even further by partnering with an appropriate third party to hone them. It is estimated that the average knowledge worker wastes around 41% on activities that could be handled competently by others*, so outsourcing this to more cost-effective partners seems like an obvious way to further boost productivity.

As an example, consider the enormous number of customers and agents that financial services companies have to deal with at any given time. Often, their management information systems aren’t efficient enough to cope with this level of activity. This lack of efficiency frequently stems from a reliance on manual data collection, use of disparate measuring systems and inconsistent data, which can lead to inaccurate insights. This inadequacy in turn can cause poor business decisions, which lead to both dissatisfied customers and staff.  Handing over control of time-consuming and process-heavy functions means that management can focus its thoughts on moving the business forward, and innovating, rather than being bogged down with these issues.

This is something we successfully manage for a number of banking and financial services providers around the world. Whether it is taking on portfolio management and related financial products – from the opening of an account for customers through to management of the portfolio – this service can scale and flex to meet demands and changing portfolio requirements. Process improvement programs can yield dramatic results with regard to quality of delivery and reduction in the cycle time of processes.

The right business process management partner could also contribute positively to the innovation process directly. Rather than just taking on the grunt work, it should get under the skin of your business to look at every nuance of your processes to add genuine strategic value. If we look at other sectors, online travel agency Travelocity.com wanted to respond to a dip in worldwide airline traffic and hotel revenues, deciding at our advice to add an offline channel to its online business to generate new revenues – the result of which was a 50% increase in overall offline revenue.

By concentrating on delivering standardisation and efficiency gains across the business with a shared services model and a combination of technology and analytics, organisations have the opportunity to reduce operating costs, enhance efficiency, improve management decisions, increase customer satisfaction and, ultimately, revenue growth.

Moreover, the ability to use financial technology to make better organisational decisions with faster, accurate and more reliable data is a huge advantage for CFOs. This is especially the case when we place it in the context of their expanded role in modern businesses.