Illumiti Innovation Blog

The Role of Finance to Lead Enterprise Transformation Part 1

Date: September 06, 2022
By: Illumiti

Part 1: The changing role of finance and an introduction to SAP S/4HANA Finance

Finance executives armed with a modern finance platform are in a unique position to drive digital transformation enterprise wide. Reflecting on a recent SAP and Illumiti presentation to Financial Executives International (FEI), entitled “Office of the CFO: Leading the Enterprise Transformation Initiative,” this two-part blog post highlights some of the key takeaways about the transformative role of finance today.

Unprecedented Times

With accelerated change forced by global events and unprecedented disruptions, successful enterprises demonstrate resilience by surviving—maintaining liquidity, cutting costs, reevaluating resources—recovering, and ultimately executing growth. Resilient companies will survive, but will have to adapt quickly by embracing innovation, agility, and simplicity. The ability of the CFO to have real-time data to steer the organization is more important than ever before.

A Unique Vantage Point

Finance departments are uniquely positioned to drive change within the organization due to their knowledge and insight across all areas of business. As digitization has accelerated, CFOs really need to be the individuals driving business model innovation forward across the enterprise. Without an agile finance and risk foundation of systems and processes, the chances of other parts of the business excelling in this environment come into question.

The Economist Intelligence Unit’s recent survey of 800 CFO and finance executives identified four key business drivers for CFOs:

  1. Support Corporate Strategy
  2. Provide Business Insights
  3. Manage Risk and Compliance
  4. Manage Cost of Finance

The study found that 90% of senior finance executives believe that finance should drive collaborative enterprise planning to ensure alignment with both financial and strategic plans. Managing unexpected changes to financial forecasts and adapting finance processes to rapidly evolving business models are top of mind today. Roughly one-half of the finance executives surveyed want greater involvement in cybersecurity risk activities, and the majority want to use time freed up through automation to focus the finance department on more advanced financial activities.

Using technology and advancements for a modern financial platform, how can CFOs accelerate these business model innovations and transformations?

SAP S/4HANA Finance

SAP has the broadest and most mature finance and risk portfolio in the marketplace. SAP S/4HANA supports live business for all roles of the Office of the CFO. SAP's digital business framework helps SAP customers solve complexity and transition issues they're facing in their journey into the digital economy as a live business. Digital finance drives the digital ERP core, bringing together transactions and insights, serving as the platform for innovation and business process optimization to allow the entire value chain to be digitized.

From Looking Back to Looking Forward

Finance is always focused on running the business and executing operational tasks, but nowadays this is not what's expected from the business anymore. Business expects finance to deliver the necessary insights for decision making. In order to free up time, operational tasks cannot just be abandoned, but can leverage automation. It's not about reducing head count, but rather getting rid of the repetitive jobs while shaping them into new, innovative, and value-add roles like big data or market analysis, simulation, and prediction.

Historically, financial insights have largely delivered a look at the past, or the reporting of “actuals,” which tell us little about the future. In order to focus more on forward looking insights and transforming these actionable classic reporting activities, they need to be made more efficient. And this is where advanced analytics come in, including predictive analytic capabilities, smart alerting, and embedded reporting abilities within S/4HANA.

Measureable Benefits

SAP is helping CFOs and other financial professionals drive real value, both quantitatively and strategically, in their finance transformation and system enhancement initiatives. Most quantitative benefits focus on cost savings, as well as IT landscape and process simplification. The strategic benefits are equally, if not more important, when it comes to steering the business and adding value to other lines of business. There are also significant benefits from finance transformation delivering more agility and analytics to help steer the business and capitalize on shifting market trends.

Through SAP Performance Benchmarking Surveys of adopters moving from traditional ERP to enhanced SAP S/4HANA, companies report measureable benefits that include a decrease in planning, forecasting and budgeting costs; reduction in business and operations analysis/reporting costs; reduction in at close time and improved efficiency; reduction in TCO (total cost of ownership); system performance improvements; and improvements in profitability.

In Part 2 of The Role of Finance to Lead Enterprise Transformation, we’ll take a closer look at the power of SAP S/4HANA Finance to deliver real-time insights and streamline workflow.

SAP Platinum Partner Illumiti

As a modern system integrator and management consulting firm, Illumiti focuses on helping customers leverage the power of SAP throughout their digital transformation journey. To get better acquainted with SAP S/4HANA Finance in particular, explore a “Day in the Life of a Finance User” with Illumiti’s interactive tool

And watch for our follow-up post: The Role of Finance to Lead Enterprise Transformation, Part 2: SAP S/4HANA Finance powers real-time insights and streamlined workflow.

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