3 processes CFOs can implement now to improve business performance
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.
Amid predictions of a mild 2023 recession, CFOs face challenges like high-interest rates and inflation affecting global economic performance. These conditions necessitate innovative, resilience-building strategies within companies, focusing primarily on optimizing foundational processes to unlock value and mitigate economic impacts. This approach involves identifying and rectifying costly errors within operational tasks, thereby safeguarding revenues.
Businesses can combat economic slowdowns by enhancing efficiency in their foundational processes, thus reclaiming lost revenue. Real-world examples include a telecommunications firm that saved millions by eliminating duplicate payments, a candy company reducing CO2 emissions and improving customer satisfaction by consolidating shipments, and a bioscience company boosting sales by removing unnecessary credit and delivery blocks.
Process mining technology, combining data mining and process analytics, serves as the catalyst for these transformations. This technology grants CFOs intricate insights into their companies’ operations, enabling more informed decision-making for enhanced efficiency and effectiveness. By 2025, Gartner predicts 80% of organizations will have integrated process mining into at least 10% of their operations, confirming its growing importance.
To bolster performance, CFOs should concentrate on three critical processes:
Optimizing Accounts Payable (AP): Economic pressures mandate refined AP processes to bolster free cash. Traditional complexities in AP departments often lead to missed discounts and duplicate or late payments, inviting penalties. Process mining illuminates these inefficiencies, offering solutions like extended payment cycles and increased touchless invoice rates through accurate data entry.
Improving Accounts Receivable (AR): Despite its importance in securing consistent financial results, many businesses struggle with AR due to systemic misalignments, visibility issues, and over-reliance on manual tasks. Process mining in AR provides comprehensive data views and actionable insights, such as real-time credit risk assessments, enhancing overall operations.
Streamlining Supply Chains: With supply chains disrupted by demand fluctuations, inventory inconsistencies, and labor deficits, CFOs need to unearth hidden efficiencies within. Process mining aids this by offering real-time inventory knowledge and other strategic advantages, such as eliminating unnecessary delivery blocks and improving sustainability and customer satisfaction metrics.
However, CFOs have identified technological inadequacies as a primary obstacle in leveraging data for insights, with system upgrades and automation being potent solutions. By fully adopting transformative technologies like process mining, CFOs can revolutionize mundane tasks, leading to substantial improvements across various business aspects.
Conclusively, as businesses navigate 2023’s complexities, CFOs harnessing process mining to refine key operational aspects could establish a foundation for enduring success, achieving objectives like cost management, cash flow enhancement, and market share expansion.
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