In a crisis, moving financial processes to the cloud is not enough; the key lies in unification

Editor's note:This article is a contributed piece by John O'Rourke, Vice President at OneStream. The views expressed are solely those of the author.

The pandemic has proven that moving finance and accounting functions to the cloud is critical, allowing teams to maintain business continuity while working remotely. Keeping employees connected to key systems—and to each other—is not just a convenience today, but a necessity.

However, if finance teams use applications that are disconnected from each other, even with virtual connectivity, they may face efficiency challenges.

Imagine that in the coming months, if someone is asked to temporarily cover for other team members or business partners, they will face a steep learning curve. If financial close and consolidation, account reconciliation, planning, and reporting each use different processes, that means the person would need to master at least three systems in a very short time.

This is not a hypothetical scenario. Given the various challenges of remote work—family distractions, network issues—it is likely that someone will need to step in temporarily while stay-at-home orders are in effect.

Furthermore, a unified finance platform can provide team members with shared access to actual, budgeted, and forecasted data during remote work, thereby simplifying reporting and planning processes and ensuring the team works from the same set of data. A single source of truth can accelerate the close cycle, support agile planning, and improve accuracy and productivity. These capabilities are helpful in normal times and critical in turbulent ones.

Contingency Planning

Facing the current business disruption, a unified finance and accounting platform has other important implications, one of which is planning.

Unforeseen challenges require finance teams to take a different approach to routine planning processes.

Being able to monitor revenue, costs, and cash flow on a weekly or even daily basis helps leadership teams make critical decisions. If this process is rigid, slow, and laborious in normal times, generating actionable insights during a crisis will be especially difficult. Finance teams should ensure they can access company and business line data almost in real time and view financial and operational results by geography, division, department, location, or any other standard needed to guide the business. This access enables them to anticipate surprises, allowing them to model best-case, worst-case, and other scenarios.

Predictive Analytics

Ongoing advances in predictive analytics and machine learning are helping finance teams gain clearer insight into what might happen once pandemic risks subside and stay-at-home orders are lifted.

Even so, the most advanced predictive analytics may not be able to identify the next "black swan" event like COVID-19. But a good system can enable teams to forecast with confidence using sophisticated statistical models that use historical trends as a starting point for analysis. Finance teams can then adjust baseline forecasts based on known business changes, such as new customers, plant shutdowns, or new acquisitions. Machine learning can take forecasting to the next level with algorithms that learn over time. Combined with data visualization tools, teams can quickly spot trends, drill into details, and uncover new insights.

A Fortune 500 food and beverage company we worked with faced significant risk severely impacted by COVID-19. But they leveraged a cloud-based Corporate Performance Management (CPM) platform along with graphical dashboards to go beyond the month-end close and reporting process, and now load and analyze sales volume and working capital data daily.

As a result, the CFO and finance team are able to view 7-day, 14-day, 21-day, and 28-day trends compared to the same period last year, enabling them to spot trends, update forecasts, and make better, faster decisions. This is critical today because analysis must be updated as quickly as possible to adjust products and services as demand shifts during the pandemic.

Automation as a Strategic Enabler

Many organizations are embracing process automation to reduce costs, improve accuracy, streamline processes, and free up finance teams to focus on more value-added activities. This adds value under normal conditions, but during a crisis, it also helps ensure business continuity. This is because automation is particularly good at replacing tedious and time-consuming tasks such as data collection and validation, transaction matching, or account reconciliation. Because in a crisis, you want your team to create as much value as possible, focusing on solutions and problem-solving rather than basic data gathering or tasks better suited for algorithms and software.

After the crisis, automation also allows finance teams to devote more time to strategic tasks such as analysis, planning, and forecasting.

Xylem, a global leader in water technology, replaced six legacy applications used for financial close, consolidation, reporting, and planning with a modern CPM platform. With a unified cloud finance platform, the finance team automated many manual tasks in the close process and collected more detailed operational metrics alongside financial results. This enabled the finance team to spend more time on analysis rather than updating data, allowing them to respond quickly to changing business needs.

The bottom line is this: technology is playing an increasingly central role in helping organizations enhance agility in good times and manage business disruption. As the pandemic has shown, we must expect the unexpected, which means planning for it. A cloud-based finance platform should unify and streamline multiple processes, providing the connectivity and agility needed to handle the most challenging situations. In this way, technology can become a strategic advantage, helping companies survive and even thrive during a crisis.

Disclaimer: OneStream is an advertiser with CFO Dive, but has no influence over CFO Dive's editorial content.