Professional Documents
Culture Documents
December 2016
Wheel of Finance The future of Finance: As we look at What does the future hold for the
the future of Finance, its important to Finance function? Todays Finance
consider two things: How Finance organizations are more then ever under
delivers value to the organization, and pressure to deliver value to the business
what enables the Finance function to do and in parallel operate within a highly
so. cost-efficient and most-effective delivery
model. The introduction of new Digital
How Finance delivers value: In our technologies is likely to be the
view, Finance delivers value through most important factor impacting the
three types of services: Operational Finance function.
Finance, Business Finance and
Specialized Finance. Think transactional, Digital technologies radically transform
strategic and highly specialized. how the business and its Finance
function delivers value. Digital Finance
What enables Finance: Underpinning utilizes disruptive technology, data,
these three services are what we call innovation, and people to elevate and
Finance enablers. These enablers differentiate the capabilities of the
include the organizational structure and Finance function. Digital requires
the Finance teams talent; the organizations to think and act differently
information, systems and data available in order to generate value.
to the Finance group, and the processes
and policies that enable the Finance The ability of CFOs to leverage Digital
team to monitor risk and stay on top of technologies to position their future
regulatory obligations. Finance function will determine the
future of their organizations.
Wheel of Finance Rise of the Finance Factory: Finance some time. However we expect that
will be a utility function where day-to- Finance teams will be transformed by
day transactional finance from the rising use of robotics, mobile devices
payables, receivables and invoices to and cloud computing.
treasury transfers, journals, capital
expenditures and the close cycle will Close, Consolidate and Report: One
be managed centrally in Finance of the transactional Finance processes is
Factories. These Finance Factories are the process by which organizations
fully automated/robotized process produce their internal management
centers with continuous control and reports and external financial
process visualization tools monitoring statements. In this Point of View we
real-time on process exceptions. focus on Finance technology trends and
enabling technologies providing
What else: Theres no paper, solutions for todays Close, Consolidate
anywhere. Employees use cloud-based and Report challenges, in particular the
apps on mobile devices to transact their Close process.
business, and highly standardized,
workflow-enabled business processes Reviewing the literature, global trends,
handle the rest. Finance managers innovations and based on conversations
receive event-driven, real-time updates with solution providers about how they
thanks to new integration tools and see Finance evolving, we developed our
advances in in-memory processing. perspective on the future of Finance and
the Close, Consolidate and Report
Information & Systems: Integrated process.
ERP systems will remain the backbone
of companies financial systems for
Maturing Emerging
Complexity
Time
Robotic Process Intelligent Artificial
Automation Automation Intelligence
Software used to capture and interpret existing Automate non routine tasks involving intuition, The theory and development of computer
applications for the purpose of automating judgment, creativity, persuasion, or problem systems able to perform tasks that
transaction processing, data manipulation, and solving normally require human intelligence
communication across multiple IT systems
Automate this: The business leaders guide to Cognitive Technologies, the real opportunities for
The robots are coming, Deloitte Financial Services robotic and intelligent automation, Service Delivery business, Deloitte Review, issue 16, 2015
White Paper, 2015 Transformation, Deloitte, 2015
Screen scraping data collection Data input and output in any format Natural language recognition and
Rules based business process management Pattern recognition within unstructured data processing
Tactical toolset to automate repetitive tasks Replication of judgment based tasks Dealing with unstructured super data
sets
Cheaper and faster step towards process Basic learning capabilities for continuous
efficiency improvement to quality and speed Hypothesis based predictive analysis
Self-learning rules continuously
rewritten to improve performance
Source: Gartner Hype Cycle for Emerging Technologies | Note: Trends across time are not to scale
Advances in technologies give rise to Blockchain Increased transparency to all transactions via a
centralized shared service Factories distributed ledger
which perform the majority of transactional Increased speed of exchange between entities
processing (e.g. payroll) while reducing the number of intermediaries (and
the costs associated) to accelerate data
Factories are overseen by a Finance Control
consolidation and reporting
Center that monitors process
Blend teams involved in payment processing
performance, exceptions and service
levels for both people and Robotic Process RPA Reduced labor required across all routine (rule
Automation (RPA) bots. These processes are based) financial transactions
completely web, workflow, and self-serve Increased need for change management due to
enabled dramatic revision of talent models
Event-driven, real-time information
updates and continuous process
Cognitive Self-correct repetitive tasks such as AP/AR,
improvement are made possible thanks to leading to reduced costs and improved accuracy
advances with in-memory processing and Enables identification, recovery, and reduction of
integration tools overpayments in high volume, complex
transactional data environments
The close cycle becomes nearly
continuous thanks to the advent of visual In-Memory Enhanced visibility into information and more
close-management tools, integrated sub- efficient processes
ledgers, and the automation of consolidation Faster execution of transactional processes such
and intercompany transfers as AP/AR and Travel & Expenses
CFOs are no longer focused on processing Cloud Shortened close cycles and reduction of
lagging data, and instead leverage leading reconciliations/data entry through single platform
analytics to make key decisions implementation
Increased access to more efficient, well defined
data models
Transaction processing
Close, Consolidate and Report (general accounting) Purchase-to-Pay Order-to-Cash External reporting
Fixed Asset Tax Planning/ Benefits Admin./ Inquiry Payment Accounts Regulatory Rating Agency
Cash Application Collections
Accounting Accounting Accounting Handling Processing Payable Reporting Relations
Investment
Daily P&L/ Mark
Premium Re-insurance Accounting/ T&E Procurement. Bank Treasury/ Trust Investor
to Market/
Accounting (Ins) Accounting (Ins) Securities Accounting/ Card Admin Reconciliation Management Relations
Middle Office
Pricing (FS) Reimbursement
Finance Human
Budgeting & Function Performance
Strategic Accounting/ Financial Internal Project
Financial Forecasting Internal Audit Management Management
Planning Tax Policy Analysis Consulting Management
Planning
Profit Center/
Expense/ Performance Multi- Risk Actuarial
Customer/ Acquisitions & Real Estate
Revenue Measurements Dimensional Management Analysis/
Producer Divestitures Management
Allocations Reporting (CM) Reserving (Ins)
Profitability
Level 2: Close
and analytics This can lead to a fragmented, manual and inefficient close,
4 as well as to inefficiencies throughout the accounting period
Integrated MJV Control,
Leveraging integrated technology solutions for financial close
Implementation complexity
IC accounting &
Disclosure management improves governance, collaboration and
management workflow around complex, labour-intensive activities,
3 including:
o Financial process & close management
1
o Automated account reconciliation (operational & financial)
2
Automated Account
reconciliation o Manual Journal Voucher control, Intercompany (IC)
3
2 accounting (transfers & eliminations) and Disclosure
management
Financial process &
o Analytics, including external benchmark data and big data
4
Robotic Process analytics
close management
5 Automation
1 (RPA) o Automated Close through Robotic Process Automation
5
ERP
Innovations focuses on deploying reconciliations management
facilitated
financial outside of the finance organization into operational areas *
close Enhanced Finance Control and Automation (EFCA) suites are
Maturity level depending on continuously expanding in scope and delivery options to meet
Low
Solution providers have been noticing the market need for Robotic Process Automation (RPA) in its basic form is the
innovations and offer solutions to improve the efficiency and automation of manual processes by replicating repetitive
compliancy of the financial close process as well as tasks with a computer-based application
improvements in management reporting and analysis and
RPA (commonly known as robot or bot) are computer
external financial reporting and disclosure
coded software programs that perform these repetitive rule-
Solution providers develop a single solution or offer a platform based tasks using cross-application macros to automate all or
solution (suite) which integrates a range of finance processes parts of an end-to-end cross-functional process
and controls
RPA tools evolved quietly over the last decade, but have now
Platform solutions have workflow integrations, use vendor- reached a level of maturity where process automation is
supported integration technologies, and are positioned as possible at a significant scale2
components of a "solution, rather than as stand-alone
Automation technology providers range from RPA focused
products in the vendors' portfolios1
vendors to others having a wide and diverse portfolio.
The marketplace comprises of1: Examples of RPA vendors are: Blue Prism, Automation
o ERP vendors, e.g. SAP and Oracle, offering Financial Anywhere, UiPath and Redwood
Corporate Performance Management (FCPM) solutions in- RPA vendors are evolving to provide consulting services along
and outside their ERP customer base with technology services, and offer solutions which broadly
o Traditional on-premises vendors, like Tagetik, offering comprise three fundamental elements2:
modified, or new, cloud-based solutions and pure play o A set of developer tools
SaaS1
o A robot controller
o Niche players, such as Insightsoftware.com, offering
o Software robots themselves
cloud or SaaS solutions outside the ERP suite. These
solutions are often purchased due to corresponding
functionality not being available in the buyer's integrated
financial management or ERP suite1
1Source: Magic Quadrant for Financial Corporate Performance Management Solutions, Gartner 2Source: Automate this: The business leaders guide to robotic and intelligent automation,
Inc., May, 31, 2016 Service Delivery Transformation, Deloitte, 2015
* In September 2016 Blackline acquired Runbook Source: Magic Quadrant for Financial Corporate Performance Management Solutions, Gartner
Inc., May, 31, 2016
AutoMate Blueprism
Automation
IBM
Anywhere Kira Arago
Watson
Automic Narrative
Pega Science
systems UiPath
Wipro
Holmes
TCS
Genfour
Redwood
ignio
Celaton
instream IpSoft
Open Amelia
BluePond Connect iDavatars
RPA vendors Vendors with niche applications Diversified vendors with presence in automation
Source: HFS Research, Deloitte Analysis, Hoovers.com
* The intent of this selection is limited to the illustration of software vendors operating in the market, and is not meant to compare product capabilities or to recommend any particular solution
Sample functions
Manual process Judgement process
3 Robot 5 Applications
Decouple
Improved Flexibility Cost
Profits & Consistency
quality Reduction
Labor
Reduced risk of human Revenue and profit Rapidly scale up or RPA processes activities 15 90% cost
data entry errors, or the generated becomes less down depending on the in exactly the same reduction opportunity
risk to that data of dependent on the ability nature of the business manner, improving depending upon the
human corruption, theft to scale labor; issue consistency of output characteristics of the
or malpractice automation enhances (volume) without the functions selected for
the abilities of current element of human automation
resources variability
Process Description
This process describes the activities related to preparing for the financial close and ensuring a smooth close
Ensure Close
process. Close readiness activities include managing the close calendar, managing disclosures, managing the
Readiness
internal and external financial reporting processes, and managing accounting policies and procedures
Activities related to closing sub-ledger accounts such as accounts payable, accounts receivable, fixed assets,
Close Sub-
inventory, and industry specific sub-ledgers. Depending on the size of the company some of the related work
Ledgers
may be performed by departments outside of accounting
Manage IC Activities falling under the scope of managing and performing intercompany accounting and transfer pricing
Accounting and include: allocation of shared expenses between entities within a company, reconciling intercompany
Transfer Pricing transactions, posting of eliminations (to avoid double counting), and the determination of transfer pricing
Execute Encompasses activities related to executing General Ledger (GL) accounting and closing GL accounts.
GL Accounting Processes involved are performing accruals, deferrals, provisions, non-standard or non-recurring journal
and Close entries, foreign exchange revaluations, review of the trial balance and closing the general ledger
This process group houses the processes involved in management and performance of account
Reconcile reconciliations. This includes the implementation and enforcement of account reconciliation standards,
Accounts policies, and procedures, and reconciling general ledger accounts and documenting that account balances are
accurate
This process describes the activities related to the establishment of business unit or regional level financial
Prepare
statements. This process includes the preparation of the balance sheet, profit & loss statement, financial
Financial
schedules, statement of cash flows, and conversion of GAAP into IFRS. It also includes the compilation of
Statements
notes and comments and performance metrics along with the submission of the reporting package
Perform Encompasses activities related to the review of business unit or regional financial statements by management
Management and the corporate office. Management reviews should follow a clearly defined schedule and exception reports
Review and manual checks should be used where necessary to validate results
Calculate Activities include the preparation of current and deferred taxes, the calculation and posting of provisions for
Income Tax these taxes, the calculation and posting of tax liabilities and assets and the preparation of the provision
Provision schedule