Extending digital advances to finance can enable real-time visibility into organizational performance at virtually any point in time. The result is that chief financial officers (CFOs) can make faster, sharper decisions to improve cost control and profitability, which is vital, especially in times of price volatility.
Until recently, obtaining real-time visibility into organizational performance wasn’t possible due to technology constraints. Typically, organizations closed their books once a month, with most enduring a rather painful process month after month.
In today’s world, however, technology is no longer a barrier. In-memory computing accelerates execution, allowing tasks to be repeated more frequently (even daily), providing business insight to CFOs in near real time.
Imagine a digitally driven world in which:
CFOs are able to spot daily (rather than at end of month) wells that are losing money and recommend corrective action.
Inputs from sensors on assets and equipment help predict the need for replacing parts, thereby driving proactive maintenance. Instead of being informed after equipment breakdowns, the digital approach can help avoid sub-optimal procurement deals, having to borrow funds or shutting down production.
Finance employees have more time to add value to the organization and learn new skills, as opposed to living the period-end nightmare month after month.
Some companies in oil and gas, and in other industries as well, have begun to implement new systems that enable advances such as those described above.
Being among the pioneers can seem scary, due to multiple issues: fear of changing familiar processes, lacking a deep understanding of the perpetual close and aversion to learning another complex information-technology system.
While there is trepidation about moving forward, most CFOs recognize the status quo is unsatisfactory. Making the journey starts with:
Investing in digital technology and in-memory computing today to reap greater savings and faster insights tomorrow
Identifying period-end activities that release the most valuable insights to CFOs and could be executed in less time using today’s technology
Partnering with external firms to reinvent the closing cadence and, through digital capabilities, optimizing the information flow.
The new paradigm in closing routines will allow finance leaders to be better prepared for volatility and to make decisions faster than competitors. Those willing to make the first move are likely to advance past executives who have opted to stick to traditional monthly-close routines.