At HighRadius, we talk to hundreds of mid-market CFOs every year. And we understand the challenges they face across key finance functions like accounts receivable, treasury, and accounting. From our conversations with CFOs in 2022, we identified one of the most important responsibilities of CFOs in the coming months will be to support efforts in building a digitally enabled future-ready distributed workforce—and to raise the bar on talent development so that organizations reach and sustain their full potential.
For CFOs today, solving labor shortages, managing talent, and reassessing skills have become top priorities. With new and disruptive technologies entering the market, today’s CFOs are left with no choice but to keep technology at the core of their business strategy to accomplish these priorities.
A study by Growmotely shows that 74% of employees expect work from home to become the new standard, while a whopping 97% of employees do not want to return to the office full-time after the pandemic. It means businesses must shift towards a distributed work model involving remote employees and offices in different locations.
A distributed workforce model helps to acquire good talent easily. However, it is not easy to communicate with a distributed team, keep them engaged, and have the company culture and values instilled in all the employees. In this first eBook of a three-part series, we will look at how CFOs can build a future-ready workforce to manage a large and diverse customer base.
It aims to address the primary challenges a distributed workforce faces. We also discuss why CFOs need to modernize their function to have a future-ready workforce, and how leveraging the right transformation strategy can set you on the path to business excellence.
The ebook also analyzes business roadblocks in empowering a distributed workforce, suggests technological strategies to augment the capabilities of the finance team, and discusses how to establish an effective digital-first strategy. In the second and third parts we will discuss how technology could transform your finance team Into a future-ready augmented workforce.
The distributed workforce model for finance teams will look very different from one company to another. Some businesses have already shifted toward a 100% remote work model while others are operating in a hybrid mode or from multiple office locations. In a distributed workforce model, employees/teams work from different locations and collaborate virtually.
As the business expands, it is natural for finance and accounting teams to be located in multiple locations. However, bringing an entire organization together becomes difficult when employees are thousands of miles apart and in different time zones.
CFOs must ensure that employees feel connected with the organization and that there is enough engagement between co-workers. If someone’s work doesn’t involve multiple stakeholders, it could lead to isolation, and if it does and there isn’t ample communication, the workflow won’t be efficient.
A distributed workforce also suffers because of the lack of standardization and disconnected systems. It leads to unnecessary back and forth with different stakeholders resulting in lost time. For example, if the collections team is unaware that a customer has made the payment, it might result in erroneous dunning.
A traditional office set-up has a lot of restrictions in terms of business growth opportunities. With a distributed workforce, it becomes easier for companies to get more customers because of the global reach of their offices/employees.
Additionally, businesses get access to good talent from multiple locations, and employee retention improves. This adds to the organization’s diversity which has proven to be a positive factor for business success.
It’s time that the senior management and CFOs start looking at ways to empower distributed workforces. Employees will only be productive when they have the right tools to get their work done, and the systems and processes in different offices are not siloed.
It is not easy for CFOs to manage a workforce that is spread across multiple locations. They need to focus on and optimize different systems, groups of employees, processes, and workflows to fast-track business growth. Here are the top challenges that executives face while managing a distributed workforce.
It is difficult for CFOs to have an overview of employee productivity for a distributed workforce. If you think about it only in terms of time, then it wouldn’t be challenging to track the 40 hours of the work week for every employee. But getting insights into what they are actually spending their time on is what’s important.
For that, finance executives can track KPIs like the collector effectiveness index (CEI), the average time to collect cash, or ask employees to fill in time sheets to track their activities. However, it can lead to more workload and reduce their overall productivity.
Tracking KPIs using disconnected systems and for multiple locations isn’t easy. Therefore, organizations find it difficult to identify system gaps and cannot improve the overall efficiency of the various workflows.
CFOs often struggle to gain accurate business insights because of disparate data sources, tech stacks, and non-integrated systems at multiple office locations. And the lack of proper understanding of business analytics leads to indecision or decisions that adversely affect the organization’s performance.
For example, teams located in separate office locations might store customer information in different ways, e.g. CSV files and using remote monitoring and management (RMM) applications. The use of disparate systems will make it complex to collate all data in one place and get usable information.
Businesses also struggle to keep their data clean due to manual data entry practices that result in errors and duplicate information. This makes it difficult to visualize the data effectively and turn them into reports, graphs, and dashboards, which could have been used to drive business growth.
In a distributed workforce, multiple stakeholders might need to work together to accomplish a task. But without a defined process flow, it gets complicated to do even simple tasks, thus reducing the overall process efficiency. It also means businesses are unable to focus on strategic tasks, and there is a lack of innovation.
Due to the chaotic processes, analysts often end up spending a lot of time on low-value tasks and going back and forth on communication between teams, impacting team productivity. For example, if the sales and credit teams aren’t aligned, the customer onboarding process will be delayed. It’s because the priority of the sales team is to fast-track bringing in new customers while the credit team has to ensure their creditworthiness.
With business processes becoming more complex and lengthy, CFOs are struggling to keep workflows connected. Plus, a lack of collaboration among team members working from different offices adds to the challenges. It is seen that a distributed workforce often suffers from communication and collaboration challenges that slow down crucial functions.
If team members aren’t aligned properly on a project, it will result in poor management leading to suboptimal results and bad execution. Employees might also suffer from low morale, which could lead to discord between teams. With so many gaps in the system, there could also be an increased risk of loss of data.
Organizations often fail to implement strong data security measures. And with a huge data footprint, it can lead to breaches which is a major security issue. This can result in much legal and financial trouble.
Businesses also need to ensure that they meet regulatory requirements across various geographies from where they operate or have customers. Data compliance requirements are essential for companies, and to operate in a region, they must follow all the local privacy regulations.
An organization with a distributed workforce must implement systems that will make handling a large customer base easy. Let’s look at some measures organizations can take to manage their customer base with a distributed workforce.
Having a particular set of key performance indicators (KPIs) and metrics to track employees and business processes is crucial for understanding where improvements can be made. It helps organizations define clear objectives and benchmarks of the performance they expect from their employees. The KPIs that a business tracks will depend on employee roles and what they expect from them.
Tracking and optimizing performance metrics will ensure that employees doing well, irrespective of their locations, are identified and given due recognition and promotions. It creates a “win-win” mindset. A transparent system also encourages employees to be competitive while keeping a positive mindset.
Managing data from multiple office locations while having a centralized view will make business processes more efficient. It will also save time as analysts and employees no longer have to manually aggregate data. Businesses can bring all their disparate data together and have a single source of truth for the organization with a centralized repository.
A centralized data repository will allow employees to get a granular view of the business process and perform detailed analysis. It also removes the possibility of duplication and helps keep the data clean. Hence, the overall productivity of the analysts and employees will improve, and the business will also benefit from the same.
Enterprises that operate from multiple locations with distributed teams must have standardized processes to ensure efficiency. If there is no fixed set of steps to complete processes like billing or customer onboarding, it could lead to lots of confusion. When every stakeholder in a process knows their responsibilities, it will result in a robust system that is managed well end-to-end.
The standardization process involves eliminating inefficiencies and setting specific standards for employees to complete their respective tasks and contribute to the overall business function. For example, accounting employees might be required to bill customers using standard templates provided by the organization under process standardization.
Employees drive business growth initiatives and are the pillars of any organization. So, it is crucial that they feel valued and are engaged in all relevant business activities and given opportunities to grow. This will lead to increased trust, better performance, and a healthy workplace atmosphere.
When everyone in an organization works together towards a common goal, they are more productive and receptive to each other.
A collaborative workforce also means that teams will strive to offer a superior customer experience that can increase retention and reduce churn. This can be done by offering a consistent experience across multiple channels and handling customer problems supportively as a team.
Data is the most important thing for any B2B business. So, it is important to ensure that it is secured and there are no data breaches. It is the responsibility of every organization to keep their customer and employee data safe. This calls for investing in the right solutions to improve cybersecurity.
Understanding the vulnerabilities in a business’s systems and data sources and rectifying them is essential. This can be done by installing anti-virus protection, doing timely system scans, and maintaining a secure network.
Employees should also be given ample security training, so they do not fall prey to data breach attempts or malicious attacks by hackers.
A perfect distributed workforce is a blend of people and technology. By investing in technologies such as AI and ML, businesses will be able to streamline processes, establish efficient workflows, and cater to a growing customer base. It will also help address problems such as limited team collaboration, missed business opportunities, and process inefficiencies.
Companies also need to automate their AR to overcome siloed processes, reduce manual intervention, and enhance productivity. This will leave the finance team with ample time to focus on high-value tasks, innovate, and contribute to the overall growth of the business. It will also be easier to offer a better customer experience with automation as it makes companies more flexible.
Read our next blog of this 3 part series to learn how you can transform your finance team into a future-ready augmented workforce.
HighRadius offers cloud-based Autonomous Software for the Office of the CFO. More than 700 of the world’s leading companies have transformed their order to cash, treasury, and record to report processes with HighRadius. Our customers include 3M, Unilever, Anheuser-Busch InBev, Sanofi, Kellogg Company, Danone, Hershey’s, and many more.
Autonomous Software is data-driven software that continuously morphs its behavior to the ever-changing underlying domain transactional data. It brings modern digital transformation capabilities like Artificial Intelligence, Robotic Process Automation, Natural Language Processing, and Connected Workspaces as out-of-the-box features for the finance & accounting domain.
Visit our product pages to know more about our autonomous finance solution offerings.
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HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.