Technological activation – fueled by data – is the ticket for cost optimization
Does your organization favor technological activation? This is essential to optimize the costs of the company given the interdependent nature of cost optimization and technology.
In recent years, financial directors have directed efforts in their organizations to go beyond traditional costs of cost reduction (reactive and more blind) to focus on cost optimization (targeted expenses associated with investments designed to maximize commercial value). This should be the year when financial managers inspire their companies to adopt continuous cost optimization underpinned by the modernization and activation of technologies, and supplied by well-governed data and analyzes that exploit full value of the ‘Artificial intelligence and other advanced technologies.
The case of continuous cost optimization motivated by technology
Cost optimization is crucial for business performance. Continuous reduction in spending while making smarter investments to stimulate profitability growth allows organizations to become more resistant and agile. However, research reveals that cost optimization efforts require substantial improvement in most organizations. A 2024 Survey on world finance leaders and professionals noted that most of the cost optimization efforts – assessments of third -party expenditure and automation initiatives for robotic processes for reductions and outsourcing / offshoring strategies – have failed to make progress significant and measurable in the previous 12 months. On the right side, the majority of financial directors and financial leaders have reported in the survey that they had made significant progress with cost optimization thanks to technological rationalization and the use of cloud -based systems and , for those who used it in financial operations, AI.
These positive results indicate the path of the greatest potential success. How can financial directors and their organizations increase the performance and results of cost optimization initiatives? The solution is deceptively simple: the majority of cost optimization catalysts are made up of advanced technologies and tools. Take advantage of all the power and value of AI, automatic learning, APR, cloud -based systems and analyzes that take care of the strategic supply initiatives require a technological environment receptive.
In the end: more value is generated by these investments when there is a minimum technical debt created by obsolete inherited systems. This increases the importance of technology modernization strategies, which reduce technical debt while supporting investments that advance cost optimization efforts.
Technological activation in action
While organizations strive to achieve higher profitability thanks to high -level growth and optimization of strategic costs, they must first ensure that technological investment and modernization plans are aligned on strategy and commercial objectives. Such alignment positions them better to identify new opportunities and manage potential risks. The CFO should have an important voice in this discussion, in collaboration with the CEO, the IOC and other colleagues with Skin in the game.
In our opinion, the modernization efforts of the most effective technologies:
- Clarify the risks of sticking to the status quo. The costs of non-modernization of a technological environment can be serious: do not below key commercial objectives, higher operational costs and ineffectiveness of processes, customer experiences lower than income erodation, attraction Talents and detention difficulties, and finally to the loss of competitive and value of shareholders. In rapidly changing markets, companies are paralyzed by the proverbial ball and the inherited technology and technological systems chain cannot maintain the pace of competitors who exploit more advanced technologies.
- Identify a wide range of options and schedules. The modernization of technology takes many forms, and the enterprise approach must be carefully considered in order to maximize value and reduce financial risk. This does not necessarily mean, for example, a complete ERP transformation. In addition to updating existing software to the latest versions and / or migrant systems to the cloud, organizations can create or buy new solutions that reflect the latest application development approaches and trends (for example, architecture microservices , containerization and computer without server). Another approach to modernizing technology could involve third parties – for example, acquire another company with a modernized stack of applications, which can quickly offer advantages via an effective integration effort. Also consider that in most cases, a progressive approach to the modernization of technologies can be preferred to a massive transformation project placed on a tight rigid calendar.
- Prioritize the quality and management of data. Data -oriented analyzes are a powerful tool that can help finance groups and the wider company facilitates collaborations in real time, digital planning on demand, integrated driving machine learning models, predictive information And normative, self-service reports on mobile platforms and mobile platforms and much more. Of course, this statement assumes that the data used is not incomplete, disorganized, distorted or inaccurate. Financial directors must be a defender of the positioning of governance and data management as a high priority component of modernization efforts by ensuring that the following questions are asked and addressed: What data do we need? Do we understand the sources of this data? Do we have control of these sources? Do we need to apply transformations or normalizations to this data (ie CLADE, structure and reduce data in useful formats to make it more suitable for analysis to support decision-making)? Do end users trust the data for their use and report?
- Take advantage of the basic principles of technology to stimulate continuous modernization. Under the hood, the modernization of technologies is motivated by a handful of technological construction blocks, including simplified and decoupled architecture, support for deployment, evolution and modular and agile safety (which allow deployments and bets Fast and secure update), and as indicated above, a unified and well-adjusted data repository which helps to establish a single and reliable source of truth through the organization. Financial directors must question their CIOs as to the extent to which modernization efforts use these catalysts. Technology modernization initiatives should also prioritize the incorporation in computer -time computer solutions and events focused on user and compliance design considerations.
Modernization of technology modernization activities also cover financing systems and applications, which is why financial technology roadmaps must be up to date. To this end, financial directors will want to consider prioritizing technological investments (cloud -based financial systems, AI, automatic learning and advanced analysis) which not only stimulate efficiency and innovation, but contribute also to the subsequent progress of cost optimization.
Finally, not surprisingly, AI must justify a close consideration of financial directors. In the past year, more financial groups have gone beyond the use of generating AI to improve the efficiency of compliance and risk management activities for Deployment of generative AI solutions Throughout the order cycle and expenditure management initiatives – and display lucrative long -term yields accordingly. These experiences, appreciated by organizations that have surpassed AI conversation to deploy it, must be exploited by companies already in the game and recognized as the way to follow by those who arrive there. As promising as AI tools are today, the IA agent could soon generate an even more commercial value as companies deploy the digital workforce to develop new operations and businesses quickly and more effectively.
Fewer growth opportunities are available for organizations imposed by inherited systems, data quality problems, integration difficulties and technical debt that these charges inflict. This is why financial directors must pave the way in their organizations to stimulate the modernization of technologies, technological activation and cost optimization initiatives, with the mentality of maintaining a continuous journey emphasizing a great certainty to achieve the tangible value. Consequently, the investments offered in selected use cases should be supported by a convincing profitability analysis articulation of the value and return on investment that will be delivered.