3 processes CFOs can implement now to improve business performance

People writing down processes by hand: Process mining could unlock lost revenue.

Process mining could unlock lost revenue. Image: Unsplash/UX Indonesia

Bastian Nominacher
Co-Chief Executive Officer and Co-Founder, Celonis Deutschland GMBH
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  • Tough economic conditions mean it's harder for businesses to meet financial objectives, but they could unlock lost revenue by improving processes through process mining.
  • Lack of processes could account for the unnecessary loss of revenues through non-billing, double payments and overlooking cost-saving opportunities.
  • Chief financial officers should focus on three key processes to optimize accounts payable, accounts receivable and supply chains to accelerate transformation and improve performance.

More than 90% of chief financial officers (CFOs) foresee a mild recession in 2023 – that’s not the news anyone wants, including the CFO writing this.

High-interest rates and stubborn inflation make the global economy difficult to do business, which is not just a C-suite problem. Economic slowdown hits everyone: fewer jobs, lower wages, falling tax revenue and reduced public services investment.

Tough times call for inspirational ideas. Here’s one: by improving the foundations of their businesses, CFOs can help revitalise global economic performance.

Have you read?

Processes are the foundation of every business

Every business is built on processes – the digital journeys taken by tasks, such as shipping an item or paying an invoice. In each process lies a massive amount of value to unlock. Why? Because right now, whether businesses admit it or not, mistakes are being made that impact their margins – goods are shipped but not billed, invoices are paid twice, and orders are cancelled unnecessarily because the IT system erroneously says it’s out of stock.

Businesses that optimize their processes can defy the slowdown, however, by tightening their processes and releasing lost revenue. For instance, one telecommunications firm saved millions by stopping duplicate payments. A candy company combined shipments to the same location in one truckload to decrease CO2 emissions and increase customer satisfaction. And a bioscience business found it could avoid more than 60% of its credit and delivery blocks, so it lifted them and boosted sales.

Improve operational performance with process mining

Each business used process mining, a technology combining data mining and process analytics, transforming companies’ operations. By creating a more granular image of a business’s inner workings, process mining gives CFOs the intimate knowledge they need to make their businesses run more efficiently, more effectively and improve performance.

By 2025, 80% of organizations will embed process mining capabilities in at least 10% of their business operations, according to IT consultancy Gartner. And 61% of decision-makers are planning to use or are already using process mining, according to survey results by Forrester Consulting. Whether process mining is on your agenda or this is your first time reading about it, here are three key processes CFOs need to nail to boost performance.

Process #1 – Optimize your accounts payable

With current inflation and recession looming, CFOs need their accounts payable (AP) to increase free cash. The problem is that AP departments are complex. Teams are too often locked into working methods where they miss cash discounts, pay the same invoice too often and make late payments that can trigger cash penalties.

Like the accounts receivable (AR) remedy, process mining provides CFOs with cross-functional, end-to-end visibility of how the AP function runs. It reveals opportunities, such as optimizing working capital by extending payment cycles and improving efficiency by increasing touchless invoice rates thanks to improved data entry accuracy.

Process #2 – Improve your accounts receivable

AR is a top finance process that ideally delivers quarter-on-quarter results. However, too many businesses fail to get what they need when needed. There are three common reasons for this:

Source systems are unaligned, preventing teams from creating one single source of truth for customers and balances. Poor visibility forces people to make “best guess” decisions on priorities. Teams are spending too much time on work that technology could do.

In an age when ChatGPT can rewrite Game of Thrones endings, CFOs must give their teams the tech that makes the most of their talent.

By using process mining in AR, teams get access to an objective, comprehensive view of data across systems. They gain insights and prioritized actions to capture value, for instance, by assessing credit risks in real-time with the help of a prioritized list of customers based on credit utilization and exposure, as well as past behaviour. And they can work fast with process mining – adding value to AR operations in months, not years.

Process #3 – Get your supply chain in order

Supply chains are bent out of shape. Rapid demand swings, unreliable inventory, and labour shortages make putting them back together a mammoth task. CFOs, nevertheless, can control what’s happening in their backyard. Thankfully, that backyard has a lot of hidden value opportunities ready to be revealed and captured with process mining.

Process mining can smash strategic CFO priorities by connecting people, processes and technology. With real-time, total knowledge of stock levels, process mining could allow people to remove unnecessary credit and delivery blocks and increase on-time delivery, as one example.

Plus, by smartly working with master data, process mining automatically fills in missing goods data like pricing, weight and addresses to improve productivity. This also has a positive knock-on effect on sustainability and customer satisfaction – both critical in the race for performance improvement.

Process mining can smash strategic CFO priorities by connecting people, processes and technology.
Process mining can smash strategic CFO priorities by connecting people, processes and technology. Image: Deloitte Development LLC

Process mining could smash objectives

Some 64% of CFOs told consultants Deloitte that inadequate technology and systems were the greatest challenges to turning data into insights. The same study found new and upgraded systems and automation were the most effective way to improve data and insights.

It’s time for CFOs to embrace technology that accelerates transformation and performance fully. With process mining, CFOs and their teams can optimize daily, routine tasks and deliver massive benefits for the top, bottom and green line.

Speaking to CFOs, they routinely share three main objectives: accelerating cost management, improving free cash flow and growing market share. What they do not routinely share is an awareness that fixing the foundations of their business – processes – will get them to where they need to be.

The year 2023 is not easy for businesses, but if CFOs nail these three key processes, it could be the year they set their businesses up for decades of success.

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