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The role of the chief financial officer (CFO) has been evolving for some time, from hindsight report generation to forward-looking advisor, business innovator, and change agent. During the pandemic, many finance leaders took ownership of large-scale digital transformation effortsa trend that is only accelerating. Indeed, a central lesson learned through the challenges of the past two years is the advantage of being able to rapidly adapt an organization to minimize the impact, or avoid altogether, the effects of disruption. Even as we move into a post-pandemic world, disruptive events are here to stayincreasing in both severity and frequency. At the same time, new business models are emerging, such as the subscription economy and service-based experiences like platform-as-a-service (PaaS), that require significant changes to financial and operational models.
Taken together, the need to adapt and overcome disruption and the opportunity presented by emerging business models offer a clear justification of why organizationsand in particular the futurist, change-making CFOmust develop flexibility and adaptability to achieve resilience. This point has not gone unnoticed. According to McKinsey, only 11 percent of companies believe their current business models will be economically viable through 2023, while another 64 percent say their companies need to build new digital businesses to help them get there.1 Despite having so much at stake, many finance leaders face roadblocks on the journey to become more agile. Therefore, this blog looks at 3 forces driving adaptability for CFOs with Microsoft Dynamics 365 Finance.
1. Modernize enterprise resource planning solutions
The first force driving adaptability is the modernization of enterprise resource planning (ERP) systems. Recent technological advances, such as the shift from the rigid structures of monolithic ERP to highly adaptable, composable business applications, are a primary benefit driver of ERP modernization. This is perhaps one reason that, according to Gartner, by 2023, organizations that have successfully renovated their ERP platforms will achieve at least a 40 percent improvement in IT agility to deliver business outcomes.2 This will not surprise companies that had completed ERP modernization before or during the pandemic. These businesses grew US corporate equity, assets, and profit ten times faster than corporate debt during the 21 months of the pandemic3proving that savvy companies, boosted by digital transformation, can rapidly pivot to new sales and services models.
Dynamics 365 Finance offers businesses standardized capabilities on a composable ERP platform. Plus, it can function as both a stand-alone solution, allowing organizations to avoid costly rip-and-replace of legacy technology or as a tightly integrated and extensible system. As CFOs look to modernize existing ERP solutions as a path to unlocking adaptability, Dynamics 365 is enabling the transformation and improving IT agility to embrace new business models.
Learn more in our recent blog: Dynamics 365 breathes composability into enterprise resource planning modernization.
2. Enable a real-time, single source of truth
Though expensive to maintain and resource-intense to customize, legacy ERP often becomes highly customized and fragmented as businesses grow and add new solutions, such as customer relationship management (CRM) or warehouse management systems (WMS). These additions are disparate and disconnected from a central ERP, leaving data silos that are difficult to integrate and reconcile. Without unified data available in real-time across the organization, finance leaders can remain stuck in the function of economic guardians and unable to rise to the role of business innovators.
Dynamics 365 Finance is built on a modern, open platform that can be easily connected to both legacy internal solutions and modern, cloud-based systems via RESTful APIs. This flexibility and extensibility serve to unlock adaptability, automate data harmonization, and create a single source of truth. Ultimately, this allows finance teams and the broader organization to confidently make quicker, data-first decisions.
3. Deliver AI-driven insights
As we have discussed previously, AI is poised to transform the finance function. The core set of financial management processes that support the work of every organization are often highly manual, making them slow to innovate and challenging to transform. While progress has been made through automation, specific tasks, like predicting when a customer will pay an invoice or creating an intelligent cash flow forecast, require more person-hours than are available in a month, let alone on demand. This is because these tasks require comprehensive knowledge of large, complex data setsa job ideally suited to the application of AI and machine learning.
Dynamics 365 Finance recently announced the general availability of finance insights, a set of AI-powered capabilities that help companies improve the efficiency and quality of financial processes by leveraging intelligent automation. Finance insights provide three new financial management tools: customer payment insights, cash flow forecasting, and budget proposals. When combined with Dynamics 365 Finance, these tools improve business decision-making by delivering AI-driven business insights that are clearer and faster while also improving operational efficiency by utilizing intelligent automation.
Take a deeper look in our webinar with special guest R “Ray” Wang from Constellation Research, Inc., to learn how analytics, automation, and AI can help you achieve financial dexterity.
Maximize financial visibility and profitability
As we have seen here, businesses and the finance leaders who support them need the right technology solutions to drive adaptability if they are to thrive in an era of disruption and to capitalize on emerging trends, such as PaaS, direct-to-consumer (DTC), and the subscription economy. To this end, we walked through three forces that are driving adaptability for CFOs with Dynamics 365 Finance: modernizing ERP systems, enabling a real-time, single version of truth, and delivering AI-driven insights.
To learn more about how Dynamics 365 Finance can help your organization maximize financial visibility and profitability in our new normal, check out our webinar with special guests from The Adecco Group. You can also see Dynamics 365 for yourself with a Manage Financial Risk Guided Tour today.
GARTNER and Magic Quadrant are registered trademarks and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and are used herein with permission. All rights reserved.
The post 3 ways Dynamics 365 powers adaptability for chief financial officers appeared first on Microsoft Dynamics 365 Blog.
Brought to you by Dr. Ware, Microsoft Office 365 Silver Partner, Charleston SC.