How finance and accounting can streamline and innovate with cloud

Finance and accounting (F&A) is the beating heart of a business. Its evolving role as the data guardian of the enterprise places it in a prime position to connect the organization and deliver data-driven insights that shape strategic decision-making. Finance also handles the day-to-day activities that keep a business humming: making sure suppliers and staff get paid on time, managing collections, and closing the books.

But when it comes to innovation, F&A often gets overlooked. Though other parts of the business race forward powered by the latest technology, finance stays burdened with legacy on-site systems, or at best, a hybrid approach, using cloud for the simpler processes and on-premise software for high-volume, complex, or super-secure work. Our flagship study of more than 500 CIOs shows that only about one-third of them are prioritizing a full-stack technology investment in F&A in the next couple of years.

The truth is that legacy systems slow F&A down. Teams working with older tools find it hard to integrate critical data, are slow to report, and – as seen during COVID-19 – struggle to connect across systems remotely. Gaps, errors, and constant updates are the norm.

The F&A business case for cloud-based solutions has focused on cost savings – minor process automation and straightforward streamlining. But enormous opportunities exist for businesses that are willing to embrace cloud. Instead of identifying cloud-ready data and processes that companies can can lift and shift, successful businesses should focus on using the cloud to drive innovation across the finance function as well as the enterprise.

Many organizations are adopting a data on cloud strategy to create one orchestrated, standardized, centralized, and highly automated system that adds (rather than simply maintains) value. And though most experts once cited security as an area of concern for cloud, it is no longer a topic of debate – they now agree that the cloud has become safer and more resilient than on-premise systems while costing less to keep secure.

But how is cloud transforming the office of the CFO? Cloud-enabled F&A helps forward-looking finance teams to:

With cloud technology, finance data is woven into the enterprise data fabric. In practice, this means that data that previously existed in silos can integrate into a single source of truth. Access becomes easier, analytics becomes more powerful, and cross-functional collaboration becomes seamless. In addition, cloud solutions enable the use of application programming interfaces to integrate third-party data, allowing data interrogation to occur in a much broader, richer context.

The cloud can power the creation of an intelligent digital mesh that connects people, processes, smart devices, and data. The CFO's office can then use this interconnectivity effectively to drive finance and business outcomes.

A multinational drinks company is using cloud-based technology with embedded analytics to connect financial planning, corporate planning, and operational planning across the enterprise. The company has also created an analytics playbook to help users from interpret insights in the context of the business and work toward their goals.

Cloud technology was once all about improving experience for employees and customers. It automated repetitive work and unlocked new levels of efficiency and accuracy in simple tasks. But today, software-as-a-service platforms offer more than a good experience. When cloud software is orchestrated intelligently, finance can forecast with uncanny accuracy, unlock new insights, spark innovation, and conduct full-landscape scenario planning.

What's more, flexible cloud platforms allow hyper-personalization and can deliver insights in formats that work best for your audience – audio, visual, or even touch (think touch screens or virtual reality dashboards, or even JARVIS, the artificial intelligence assistant from the movie Iron Man).

To improve the customer experience, a global healthcare company developed a conversational reporting framework to present financials through voice. Smart devices equipped with natural language processing answer 'what' and 'why' questions on financials, enabling people to easily access deeper insights that may not have been immediately available on standardized dashboards.

Organizations around the world had to swiftly pivot to work-from-anywhere models last year. But if on-premise software remains in play, remote working brings significant risks. The most successful organizations have acknowledged that the places we work – and even the ways we work – have changed for good. And they've used these changes to reach new levels of efficiency and deepen both employee and customer satisfaction.

Cloud computing meets and outpaces these evolving needs by providing a remote, collaborative space with 24/7 accessibility and tight security. A cloud environment is highly controllable – with built-in monitoring and measuring. And the cloud's ability to connect low-code automation platforms and deep process mining creates an integrated digital mesh that enables hyper-efficient work anytime, anywhere. For the F&A function, this can mean ditching error-riddled spreadsheets and manual processes for a virtual close with a highly distributed workforce.

For businesses with complex, global operations, the transition to a connected, seamless, and collaborative way of working across sales, commercial, supply chain, and finance is tough. But the payoffs can prove significant. A multinational consumer goods company took the bold step of integrating its plan-to-cash operations, powered by an advanced operating model and cloud technologies. It's now set to drive customer loyalty, profitable growth, and business resilience.

Artificial intelligence and cognitive capabilities in the cloud feed off live data streams to provide early, automated alerts that can trigger automated action or human intervention to correct exceptions and smooth out bumps in the road. There's no more hindsight or finding out after the fact. Instead, today's systems are self-healing and can detect, respond to, and remediate problems before they bleed into other areas.

This is particularly critical in today's hugely competitive and volatile environment where companies using the cloud are often looking to innovate and scale quickly to meet fresh demand. However, this can bring considerable development and security risks. Complex innovations must often run tests at late stages to understand their runtime realities. But late-stage problems are inherently hard to fix and companies under pressure often sail close to the wind trying to solve code or process errors while applications are live. By using a self-healing cloud infrastructure – driven by a cycle of machine learning, fine-tuning, and dynamic repair – businesses can keep delivering and deploying safely on the fly.

To respond to spikes in sales, a global consumer electronics company is harnessing advanced analytics and machine learning to hone its ability to sense demand signals and improve supply management. It has built a supply chain data lake, decision support engine, and data visualization tool – all enabled by a cloud platform – to feed into planning and decision-making processes. The result? It has improved forecast accuracy by up to 75% and cut working capital tied up in inventory by 30%.

Ultimately, cloud allows businesses to rapidly adapt to changing market conditions. Nowhere is this more critical than in the F&A function, where the accuracy and timeliness of tasks and insights can mean the difference between making or missing revenue targets. Cloud speeds up common processes like invoicing, reconciliations, reporting, and payments. And this frees up creative minds to collaborate in a space packed with detailed, flexible data, and tools for interrogation, analysis, and presentation. The upshot? Speedy innovation, constant transformation, and – most importantly – growth.

A food marketing and distribution company was struggling with a high cost of finance because of a fragmented tech and operating landscape and a failed ERP implementation. By adopting a cloud-based system of engagement, it was able to harmonize operations, drive efficiencies, and ensure scalability. Moreover, its customer onboarding time reduced from three days to a few hours, resulting in enhanced customer and vendor experiences.

Cloud technologies enable you to automate controls by embedding checklists, rules, and alerts. When powered by advanced technologies like artificial intelligence and machine learning, cloud-based solutions can reduce the time controllers spend on transactional tasks and free them up to focus more on the strategic side of their role.

A top US retail bank was failing the Federal Reserve's Comprehensive Capital Analysis and Review (CCAR) exam, which measures the fitness of the country's banks. Facing increased regulatory scrutiny, the company turned to Genpact to get its model risk management (MRM) standards and policies up to speed and to strengthen its model risk governance capabilities. We implemented a digitally enabled MRM solution with automated, integrated, and standardized model validation and governance processes. The result: the bank strengthened its model risk governance credentials, built strong client support, realized operating excellence – and achieved an A+ in regulatory compliance.

World-class finance and accounting has never been more important. In our work transforming finance for Fortune 500 companies, we've seen firsthand finance's evolution from a transactional function to a hub of innovation and a true strategic partner to the business. Forward-looking CFOs realize that cloud must serve as the core of finance transformation, enabling their teams to drive strategy, resilience, and growth through improved access to data and deeper insights.

Authored by Vivek Saxena, F&A service line leader at Genpact.