INTERVIEW OF THE MONTH
INTERVIEW WITH MR. AJAY WADHWA,
Head Shared Services at Indorama Ventures PCL
What are some of the digital transformation trends in the finance function within large enterprises? In what ways are these contributing to better company performance?
One of the trends that I see is the transformation of the finance function into a ‘finance factory’ where the transactions will become touchless. Enterprises do not want their finance team to spend too much time on transactional processes, therefore the transactions would be more or less automated through different technologies. We have technologies like robotics, OCR, blockchains among others for this purpose.
The other trend that I see is the financial results being available at real-time now with more focus on predictive analytics which can provide insights on the current performance of the organization and the performance in the near future.
Finance organizations who have not embarked yet in the digital transformation journey will initially face hiccups since they are used to a certain way of doing things and this will definitely be a big change. However, after the change has been done, many of the current processes would become self-service processes, the operating models will be reinvented, and enterprises surely will have only to gain from such transformations.
What is the role of the CFO in the context of such transformations?
CFO has to play a key role in the context of such transformations. As we are all aware, many organizations today are undertaking digitization initiatives and are going through their transformation journeys and a CFO in this context should be moving from a transactional and reactive role to a proactive and strategic role to make the organization future-ready. The CFO will be playing the role of a catalyst rather than playing the traditional transactional role.
How is technology contributing to accelerating the pace of such transformations? Do you also see this resulting in better execution?
Technology is the backbone and foundation of such transformations. If you do not have advanced technologies at your disposal, it will be difficult to think about advanced transformations. For finance or any other function, we definitely need advanced technologies to make the processes more efficient, drive synergies between the operations and also to bring in agility in the overall organization.
For example, I believe it is now outdated practice to receive P&L and balance sheets on a stipulated day and by the time one reviews them it is irrelevant. Now, one looks at financial results as soon as it is recorded and reviews it instantly.
Also, analytics is very important from the finance point of view as it provides key insights on bettering the function, helping the finance function contribute significantly to the overall organizational growth and also empowering better decision making for the organization overall.
Do you believe there will be a significant skill gap in the future as a result of such transformations? What if any, will be the kind of skill gaps?
We have been pondering over this question for quite a while now and If I go back to the days of computer invention, similar questions were being asked then as well in terms of skill gaps that could arise as a result. However, the reality is that we have adapted very seamlessly with computers as technology.
Today, the technology is changing at a very fast pace and people are really thinking about what more could be done to better channelize and optimize the organizational efforts to improve ROI. For example, a technology like a blockchain that is being talked about a lot, will of course yield skill gaps. However, many organizations are adopting it, there are institutes that are coming up that are looking to bridge the blockchain skill gaps.
Enterprises today are actively looking to minimize this digital skill gap by supporting employees in carrying out their current processes but also training them on new skill sets.
Could you share some of the transformations that you have undertaken at your previous organization and Indorama Ventures? What business benefit has this yielded?
In terms of technological transformation, we have digitally transformed various services in my previous roles in the GBS space. We automated the manual processes in the Record to Report function by linking the processes to the ERP and relevant technologies so that the daily activities are automatically carried out. As a result, the focus shifted completely from carrying out transactional steps to getting involved in finer aspects of analysing financial reports and making informed business decisions. We brought about 40-45% efficiency in manpower and at the same time improved the effectiveness of the processes within the record to report function.
Another example of the transformation that we undertook in one of the previous GBS I worked with was in the Procure to Pay process, where we studied all the processes within the function and we understood that there were a lot of manual operations being carried out in the function such as receiving the invoices from the vendor, transportation of invoices to the offices for scanning and then transporting the invoices again to a centralized team of GBS, who then did a quality check and processed payments subsequently. There were a lot of challenges in this cycle and as a result, vendors were not getting paid on time.
We implemented an automated solution that helped flip Purchase orders to invoices without changing the format and was able to transport them to the ERP with seamless exception handling and quality assurance. As a result of the automation, we were more productive in processing invoices and vendor payment was done on time.