Q&A: How digital technology is disrupting finance


The accelerating pace of technological change is both a creative force and a destructive force, in terms of re-shaping the financial services ecosystem today. The digitization of business is altering existing finance companies and creating new ones. The process is amplifying business issues, shifting value propositions within and across industries, and changing the conduct of financial business.

To gain an insight on these developments, Digital Journal spoke with Scott Rottmann, business leader, global enterprise performance management at Genpact.

Digital Journal: How has finance been disrupted by digital technology?

Scott Rottmann: Digital technology has disrupted finance in a number of ways. To begin, finance, in general, is evolving to encompass not only the traditional financial reporting which relies more on historical information and trends, but, also leverage financial data to inform forward-looking planning activities.

In particular, this evolution in finance has helped to: guide sales expectations and revenue planning; generate growth opportunities in the market; and drive customer targeting and acquisition strategies, among others. Data is becoming a much greater strategic asset to companies, and finance organizations can use digital technology to synthesize information and drive smarter, faster business decisions for competitive advantage.

DJ: What types of technologies are we seeing?

Rottmann: Digital technologies – such as robotic process automation, machine learning and artificial intelligence – also enable finance departments to improve the efficiency and accuracy of finance and accounting activities, improve compliance efforts, drive predictive modeling, and identify marketplace opportunities. In addition, automation also helps free up finance staff to take more value-added activities such as identifying new potential revenue streams, etc.

As important as these capabilities from the pure technology view, it’s critical, from an organizational perspective, to design and implement digital technologies that can be effectively integrated into existing systems, process, and workforces, to fully realize the best return on investment.

DJ: What does the short-term look like with these new technologies?

Rottmann: As the finance function continues to change, so, too, does the role and expectations of CFOs. Modern CFOs, more than ever before, act as strategic partners to the business. Digital technology can empower CFOs to provide near real-time insights to other to other C-suite executives that drive important corporate decisions, true business partnering, a novel concept in the past is truly achievable and in many organizations, required.

DJ: Technology can assist with financial forecasting. What does financial forecasting involve?

Rottmann: Financial forecasting involves reviewing past and current conditions to predict the financial future of an organization. This allows companies to closely monitor their revenue drivers and costs and plan ahead with strategies to increase projected growth and address any possible hurdles (for example, supply chain disruptions, market fluctuations, shifting regulations, changing customer expectations). Forecasting is especially important to public companies that have to disclose their economic health with shareholders.

DJ: What can companies do with financial forecasting information?

Rottmann: Companies benefit from financial forecasting information in a myriad of ways – helping to strengthen and reinforce strategic planning and operational decision-making. Specific examples include sales expectations; share price insights and addressing potential capital market volatility; and fiscal management. Plus there is business and sale cycles and demographic and customer trends.

DJ: Can forecasting be made more accurate and efficient with new technology?

Rottmann: Absolutely. First, let me provide a little context into how forecasting traditionally unfolds. Typically, developing a forecast requires large teams of staff – in some cases, up to 100 people or more – to manually gather data, run statistical calculations based on market demand, expected earnings, and numerous other inputs at the regional level, then combined for a multi-national company to develop a global view. With various data inputs in each region, it can be a major endeavor, consuming considerable time and resources each month, quarter, and year. Even with the adoption of cloud based technology, these activities tend to be manual, iterative and Excel-based processes – affecting efficiency and overall accuracy.

The use of digital technologies, such as RPA and intelligent automation, ML, predictive analytics, and AI, enables companies to execute financial forecasting processes at greater speed, accuracy, and scale than what is humanly possible. Automation also can help eliminate potential human error, especially when multiple people are involved in a producing insight. ML and AI can help identify patterns across multiple data sets, which is humanly difficult, to identify real revenue drivers.

In a connected interview, Digital Journal spoke with Vikram Mahidhar, business leader of artificial intelligence solutions at Genpact about the role artificial intelligence can play in financial forecasting.



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