How Automation Adds Agility and Certainty to Enterprise Decision-Making

In today’s business environment, taking a hands-on approach can sometimes be a bad thing.

Literally.

While key corporate functions such as finance, treasury, accounts payable (AP) and accounts receivable (AR) have traditionally relied on manual processes — which often involve time-consuming data collection, analysis and reporting — ongoing advances in digitization and automation are increasingly driving greater efficiency, accuracy and strategic insight for CFOs and other leaders.

In finance and treasury organizations, decision-making has historically been a hierarchical process. Senior executives, such as CFOs and treasurers, relied on data provided by their teams to make informed decisions regarding liquidity management, risk mitigation and capital allocation. These decisions often required extensive manual work, including data entry, reconciliation and the preparation of reports. The process was not only time-intensive but also prone to human error.

With the introduction of automation, the dynamics of this decision-making process are changing. Next-generation tools can now handle many of the routine tasks that were previously performed manually. These tools can process vast amounts of data in real time, providing decision-makers with up-to-date, accurate information, allowing CFOs to precisely monitor key working capital metrics such as days sales outstanding (DSO), days payable outstanding (DPO) and inventory turnover ratios.

As a result, the role of finance and treasury professionals is shifting from data collectors and processors to strategic analysts and decision-makers.

And as a Monday (Aug. 19) report highlighted, the marketplace is increasingly responding with a wave of acquisitions aimed at consolidating and better positioning innovative solutions to unlock the further digital transformation of the finance function.

Read more: Legacy Treasury Management Systems Ill-Equipped as Markets Enter Real-Time Era

The Evolution of Enterprise Decision-Making

Embracing automation is leading to the flattening of organizational hierarchies within finance and treasury departments. As routine tasks are automated, the need for multiple layers of approval and data validation diminishes.

PYMNTS has heard repeatedly from top CFOs for the “Day In The Life Of A CFO” series that this flattening enables quicker decision-making and allows organizations to be more agile in responding to market changes. Mid-level managers, who previously focused on data processing, are now taking on more strategic roles, working closely with senior leaders to analyze automated data outputs and develop actionable insights.

For example, automated treasury management systems can offer real-time insights into cash positions, liquidity forecasts and risk exposures. With this information at their fingertips, CFOs and treasurers can make more informed decisions quickly. This shift reduces the reliance on gut instinct and historical data, allowing for decisions based on current, accurate information.

But according to the PYMNTS Intelligence study “Accounts Payable and Receivable Trends: What’s Next in Automation,” only 5% of mid-sized firms have fully completed the automation of areas like their AP processes, while over one-third have not started any automation and are still anchored in paper and manual duties.

That’s because the shift to automation frequently requires a cultural change within organizations.  Effective change management strategies, including communication, training and support, are essential to ensuring a smooth transition to automated processes.

Read more: 15 Experts Explain the Strategic Side of Payments Modernization

Decision Support is Digital Transformation’s Holy Grail

As automation takes over routine tasks, the skill sets required in finance and treasury are evolving. Organizations are increasingly seeking professionals with expertise in data analytics, artificial intelligence and strategic thinking. This shift necessitates ongoing training and development to ensure that employees can effectively leverage automated tools and contribute to strategic decision-making. On top of that, the ability to interpret and act on automated insights is becoming a critical competency for finance and treasury professionals.

“The holy grail for digital transformation is to get to true decision support, where we’re really providing data-driven optionality and information and choices; where we fully analyze the implications of the path that we select,” Hai Tran, CFO of CSG, told PYMNTS.

Automation also fosters increased collaboration across departments by breaking down silos and integrating data from various sources. For instance, an automated enterprise resource planning system can consolidate financial data from different departments, providing a holistic view of the organization’s financial health.

This integrated approach allows finance and treasury teams to collaborate more effectively with other departments, such as operations, sales and marketing, leading to more cohesive and informed decision-making.