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The 21st-century business landscape integrates multiple forms of digital technology. Companies in many industries have transitioned to a digitalized infrastructure, and they continue to reap the benefits of this decision. Streamlined operations and increased scale-up capabilities are two bigger-picture advantages.
In the finance ecosystem, each company’s Chief Financial Officer (or CFO) and their team should ideally digitalize finance and accounting functions. This positions the firm to focus on innovation and business growth. Jaimie Lowe, a seasoned finance executive with diversified global consumer goods expertise, discussed the finance function’s digital transition.
3 Ways the Finance Function Benefits from Digital Technology
The United States finance industry began its digitalization several decades ago. That said, the past decade has seen many firms harness digital technology to perform many routine and specialized functions. Lowe, a senior corporate finance executive, highlighted three key areas in which digital technology can provide a game-changing advantage.
Transition from Manual to Digitalized Functions
Historically, finance department employees manually entered data for routine functions and specialty reports alike. This laborious data-entry process was grossly time-inefficient. In addition, operators were constantly at risk of making often-material errors.
Today, digital technology adoption has greatly streamlined routine and/or repetitive tasks. This time-saving strategy means team members are available for higher-level tasks, beneficial collaborations, and strategic planning. Equally importantly, Lowe emphasized that data entry errors, and unacceptable processing delays, are increasingly a thing of the past.
Scaled-Up Processing via Automation
Digital technology enables finance employees to process large transaction volumes in shorter timeframes. Real-time and on-demand data, the basis for timely decision-making, is also readily available. Software companies like Palantir build bespoke corporate data analytics that enable swift decision-making, for instance. Similarly, Alteryx allows corporate users to automate analytics, toggling between instantly important functionalities to visualize data leveraged to improve revenue performance, manage costs, and perform other crucial functions.
With these advantages as a backdrop, finance managers and other leaders can allocate time and resources to areas that directly impact business growth.
Big Data Analytics Management
Finance departments that more efficiently manage big data, and gain mastery of algorithm application, will see several significant benefits. First, enhanced predictive modeling will enable more accurate results. This advantage will manifest itself in three finance-related applications.
In investment scenarios, investors can more accurately gauge return rates and overall investment outcomes. Financial trading risks will be further minimized. In a regulatory setting, obtaining more accurate information enables increased regulatory compliance.
A Finance-Focused SVP’s Perspective
Lowe is Tyson Foods’ Senior Vice President for Enterprise Corporate Finance and Development, Corporate FP&A, and Investor Relations. She also serves as the firm’s Treasurer and oversees Risk-related functions. With over 25 years of finance experience, Lowe is well-equipped to offer informed insights on the finance function’s digital evolution.
Two Digital Technologies Integral to Finance Operations
In any industry, two digital technologies are playing key roles in companies’ increased efficiencies and business growth. Jaimie Lowe is well-versed in both technologies’ wide-ranging applications.
AI’s Increasing Role in the Finance Function
Artificial intelligence (or AI) continues its integration into multiple finance operations. Repetitive task automation, large-scale data analytics, and higher-precision risk prevention and cash flow are common AI applications. These technologies enable managers to make faster (and more accurate) decisions. For perspective, AI technology becomes more sophisticated with every application.
The finance function has seen a growing demand for predictive analytics. AI tools meet this need while delivering more reliable “what if” scenarios. Although some use cases haven’t progressed beyond the experimental phase, certain applications have shown promise. Companies will likely increase their focus on practical use cases in 2024.
The Scale of AI Adoption
In September 2024, global business intelligence firm Gartner, Inc. published the results of its June 2024 survey on finance functions’ AI adoption. After surveying 121 finance leaders, Gartner learned that finance functions have substantially increased their adoption of finance-related AI during the past year.
In 2024, 58 percent of companies are using AI technology, representing a 21 percentage point increase from 2023. Finance functions currently use AI in intelligent process automation, data analytics, and anomaly and error detection. Half of the remaining finance leaders plan to implement AI technology in the near future. However, numerous finance leaders noted that finding staff with the required technical skills remains the biggest challenge.
Jaimie Lowe’s Insights on AI Finance Applications
Lowe is familiar with AI’s applications in the finance function. She acknowledged that many companies are still hesitant to make investments in expensive AI technology.
Increased Cloud-Based Embedded Finance Integration
The term “embedded finance” pertains to the integration of financial services into non-financial platforms. This enables businesses to realize more efficient transactions, new revenue streams, and improved customer engagement.
Readily accessible, cloud-based data promotes smooth automated transactions in diverse industries. Companies can easily access financial (and non-financial) data, which also promotes seamless team collaboration. Finally, cloud technology usage results in reduced server and software expenses, positively impacting the firm’s budget.
Jaimie Lowe Advocates for Finance’s Digital Technology Adoption
Lowe recognized that transitioning to digital technology involves considerable expense. That said, she emphasized that the technology’s benefits will far outweigh the costs. Equally importantly, she noted that firms with robust digital operations will be better equipped to excel on a competitive global stage, marking the return on investment as being immense on a long-term basis.
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