- September 28, 2023
The digital dawn: How CFOs are steering Finance into the tech-powered future
CFO India recently interviewed Sachin Zute, CFO, Zensar Technologies, on how he is navigating the ever-evolving tech ecosystem.
In the ever-evolving landscape of finance operations, the role of technology has become increasingly pivotal. CFOs today face the daunting task of navigating a complex and rapidly changing tech ecosystem. The challenge lies not only in identifying the right technologies but also in integrating them effectively to enhance operational efficiency and drive strategic growth.
Moreover, the definition of success in the digital era extends beyond traditional financial parameters. CFOs must now grapple with measuring success in terms of broader, non-financial criteria. This shift demands new strategies and methodologies that go beyond ROI calculations.
Additionally, the emergence of generative AI introduces a new frontier for CFOs in finance. Leveraging the potential of AI in financial operations brings unprecedented opportunities but also raises questions of ethics and security.
As finance operations continue to embrace digital transformation, it becomes imperative to gain insights from industry leaders who have successfully forged ahead on this path. In this context, we turn our attention to Mr. Sachin Zute, CFO, Zensar Technologies.
In this series of questions, we explore the critical aspects of tech selection, deepening technology capabilities, measuring success in digital initiatives, and harnessing the power of generative AI in finance.
Tech selection for finance operations
Q. With the rapidly evolving tech landscape, how should CFOs cut through the noise to identify the technologies that align with their finance operations?
Sachin: In the rapidly evolving landscape of modern business, it is imperative for CFOs to maintain a leading role. The technological realm is undergoing an unprecedented transformation, rendering the task of selecting the most suitable technologies for seamless integration into our financial operations a formidable challenge. I would like to offer my perspective on how CFOs can adeptly navigate this dynamic landscape.
Strategic needs assessment: To effectively cut through the noise, we must initiate with a comprehensive evaluation of our organization’s unique financial requirements. This entails gaining a deep understanding of our pain points, operational inefficiencies, and areas where technology can yield the most significant impact.
Prioritize for maximum impact: It is essential to prioritize our technology requirements based on their potential impact and urgency. Our focus should be on areas that promise a high return on investment while maintaining manageable risk.
Financial analysis: As CFOs, we are well-versed in financial scrutiny. Therefore, we should rigorously analyze the financial implications of adopting new technologies. This includes assessing both the long-term benefits and immediate costs to ensure that our investment aligns seamlessly with our overarching financial strategy.
Cybersecurity emphasis: Financial data ranks among the most sensitive information an organization possesses. Therefore, we must accord the highest priority to robust cybersecurity measures in any technology we consider. Protecting the integrity of our financial data is paramount.
Test with pilots: Before committing to full-scale implementation, it is prudent to initiate small-scale pilot programs. These pilots offer invaluable insights and enable us to collect feedback from team members and stakeholders, ensuring that the technology aligns precisely with our operational needs.
Vendor selection with care: Selecting the right technology vendors is a critical decision. We must exercise due diligence, seeking reputable suppliers with a proven track record of delivering solutions that seamlessly align with our finance operations.
Compliance and data security: Compliance with legal and regulatory requirements is non-negotiable. In industries with strict data privacy standards, ensuring that our chosen technologies meet these requirements is essential.
Change management and training: Technology adoption often necessitates cultural and operational changes within our organization. Therefore, we should implement effective change management strategies and invest in training programs to equip our finance team with the necessary skills.
Continual monitoring and adaptation: Our journey doesn’t conclude with technology adoption; it commences. Continually monitoring technology performance and its impact on finance operations is crucial. We must remain agile, ready to adapt and refine our tech strategy as our organization evolves.
Leveraging cloud and data analytics: Cloud computing and data analytics tools can empower our finance professionals to make data-driven decisions. Exploring these technologies can streamline our processes and provide deeper insights.
Networking and industry insights: Finally, let’s not underestimate the value of networking. Connecting with peers and industry experts allows us to exchange insights and best practices, keeping us informed about emerging technologies and industry trends.
In today’s digital age, CFOs can effectively harness the power of technology to optimize finance operations, positioning themselves better to support their organization’s growth and success. It is essential to view technology as an enabler rather than a standalone solution, ensuring that its adoption aligns with the broader financial and strategic objectives of the company.
Deepening technology capabilities
Q. Please share specific examples of how Zensar has successfully deepened its technology capabilities. What advice or message do you have for other CFOs who are at different stages of technology adoption and implementation?
Sachin: As the CFO, it is imperative that we enhance our organization’s technological capabilities. This endeavor should begin with the development of a well-defined technology strategy that aligns seamlessly with our overarching business objectives. To achieve this, we must make strategic investments in fundamental technologies such as data management and cloud infrastructure. Concurrently, we should focus on nurturing a tech-savvy workforce and prioritize their continuous training. It is vital that we maintain an ongoing evaluation and refinement of our technology roadmap. In addition, we should actively explore emerging technologies to ensure our competitiveness within our highly dynamic industry. Maximizing the value of our existing systems should be a key consideration, emphasizing integration and data interoperability.
Zensar’s journey towards bolstering its technological capabilities is a continuous and evolving one. Central to this journey is the delicate balance we strike between innovation and risk management. We have instilled a culture of innovation and adaptability, fostering collaboration among our various departments to drive digital transformation across the entire organization. It is important to acknowledge that successful technology adoption is a dynamic process, necessitating a vigilant eye on future trends and a readiness to adapt to evolving circumstances and opportunities.
In our pursuit of technological excellence, Zensar has introduced several pivotal technologies:
Robotic Process Automation (RPA): We implemented RPA to automate repetitive, rule-based tasks within our finance departments. This strategic move resulted in the creation of approximately 22 bots, leading to substantial efficiency gains, error reduction, and the liberation of our employees to engage in more strategic endeavors. To ensure a seamless integration of RPA, we invested in comprehensive employee training and engaged in regular communication and monthly meetings to optimize RPA processes for maximum efficiency.
Cybersecurity enhancement: Recognizing the paramount importance of cybersecurity, we dedicated resources to advanced security technologies, encompassing AI-driven threat detection, multi-factor authentication, and comprehensive employee cybersecurity training. Our unwavering commitment to security was underscored by regular security audits and penetration testing. We remained vigilant, continuously assessing cybersecurity risks, and adapting security measures without compromising our diverse technology portfolio.
Cloud migration and scalability: The successful migration of a substantial portion of our infrastructure to the cloud significantly improved scalability while simultaneously reducing operational costs. This transition empowered us to swiftly provision resources, optimize server usage, and scale our services to meet customer demand with precision. Throughout this process, we prioritized cloud security and compliance, coupled with equipping our IT team with the necessary training to effectively manage cloud infrastructure.
Advanced data analytics: Leveraging advanced data analytics tools and techniques, we gleaned profound insights into customer behavior and market trends. The implementation of predictive analytics models empowered us to proactively identify potential issues, thereby enhancing customer satisfaction and minimizing downtime.
Measuring the success of digital initiative
Q. When measuring the success of digital initiatives, what strategies and methodologies should the CFO employ to move beyond traditional financial parameters? Can you provide insights into the non-financial parameters that should be included in the evaluation of ROI? What strategies can CFOs use to monitor and control costs effectively throughout these digital initiatives?
Sachin: Measuring the success of digital initiatives transcends mere numerical analysis. At Zensar, we recognize the pivotal importance of aligning our digital aspirations with our overarching business objectives, which encompass objectives such as cost reduction, revenue growth, and enhanced customer satisfaction. Our strategic approach comprises several key steps:
Defining clear objectives: Our journey commences with the establishment of precise, measurable, and time-bound objectives for each digital initiative. These objectives are designed to directly bolster our larger business aspirations.
- Comprehensive metrics: While financial metrics, notably ROI (Return on Investment), hold significance, we do not rely solely on them. We encompass a broader range of parameters:
- Operational efficiency: We diligently monitor cost savings derived from automation and process optimization. This encompasses quantifying productivity enhancements and reduced manual intervention due to digital interventions.
- Customer experience: Utilizing metrics like Customer Satisfaction (CSAT) and Net Promoter Score (NPS), we gauge shifts in customer satisfaction and loyalty attributed to digital improvements.
- Revenue and growth: Naturally, our interest extends to revenue aspects. We assess the contribution of digital initiatives to increased revenue and our market share expansion.
- Data and analytics: We scrutinize data accuracy and our ability to extract valuable insights from it, recognizing their critical role.
- Compliance and risk: Ensuring adherence to regulations and data privacy laws is paramount. We evaluate how digital initiatives mitigate operational and cybersecurity risks.
- Adoption and engagement: User adoption and engagement are pivotal metrics. We measure the degree of acceptance and utilization of new digital tools and processes by both employees and customers.
- Time-to-market and innovation: The pace of product development and service delivery is scrutinized. Additionally, we gauge the success of innovation-driven endeavors, such as the launch of new products or services.
Balanced scorecard: To acquire a holistic view of success, we adopt a balanced scorecard methodology. This encompasses the evaluation of various dimensions, including financial, customer-centric, internal processes, and learning and growth perspectives.
Regular reporting and monitoring: The establishment of systematic reporting mechanisms is imperative. This facilitates ongoing tracking of key metrics and the communication of progress to stakeholders, including executives and the board of directors.
In essence, the key takeaway lies in the recognition that digital success is not an isolated event. We engage in continuous monitoring, reporting, and strategy refinement based on the outcomes we measure. This agile approach ensures that our digital initiatives consistently drive us towards our overarching business objectives.
Generative AI in finance
Q. How can CFOs harness the potential of generative AI in the finance industry? What specific applications or areas within finance do you see as the most promising for this technology?
Sachin: Zensar harnesses the capabilities of generative AI to foster innovation, streamline operational efficiency, and deliver enhanced value to its clients. Here are some strategic ways in which any IT company can leverage generative AI to transform financial operations:
Predictive analytics for investment: We create prediction models grounded in market analysis to facilitate data-driven decision-making concerning asset allocation and investment strategies. Leveraging AI-based technologies further empowers in risk assessment and management, thereby ensuring robust financial performance.
Chatbots: Deployment of AI-driven chatbots equipped with generative skills greatly enhances our ability to address inquiries, offer tailored financial guidance, and elevate customer service standards.
Regulatory compliance solutions: The development of compliance solutions underpinned by generative AI serves as a valuable tool for automating regulatory reporting processes, thereby enabling seamless adherence to industry standards and norms.
Financial document generation: Automated generation of financial reports, statements, and investment proposals through generative AI systems not only saves time but also minimizes human errors, bolstering accuracy and efficiency.
Asset pricing models: Generative AI models play a pivotal role in pricing complex financial instruments, including options, derivatives, and structured goods. In scenarios involving cross-currency considerations, these models help in making more informed and effective decisions.
Robotic Process Automation (RPA) for back-office tasks: At Zensar, we leverage RPA systems enhanced by generative AI to automate routine back-office operations such as data entry and reconciliation. Currently, we deploy over 20 BOTs in our finance department each month, driving significant operational efficiency.
Risk management solutions: IT companies can develop generative AI-based risk assessment and management systems to aid finance departments in identifying and mitigating potential risks within their portfolios.
Fraud detection and prevention: IT Team can provide generative AI-powered fraud detection systems that meticulously scrutinize transaction data for irregularities, swiftly flagging potentially fraudulent activity for further investigation.
Q. What checks and balances should CFOs and their teams consider implementing to ensure the safe and ethical use of generative AI in their financial operations and decision-making processes?
Sachin: To ensure the responsible and ethical use of generative AI in financial processes and decision-making, CFOs and their teams should adhere to the following key principles:
Data privacy and security: Prioritize the safeguarding of customer and financial data in compliance with data privacy regulations such as GDPR or CCPA. Implement robust cybersecurity measures to protect against data breaches.
Algorithmic transparency: Maintain a clear understanding of how AI algorithms arrive at decisions, ensuring they remain explainable and auditable. This transparency is essential for regulatory compliance and maintaining trust.
Ethical AI use: Develop and enforce clear guidelines and policies for AI utilization, especially in sensitive areas like credit scoring and investment decisions, with a commitment to avoiding biased or discriminatory practices.
Regular audits: Conduct periodic audits of AI systems to identify and rectify any biases, errors, or deviations from ethical standards. Implement necessary adjustments based on audit findings.
Human oversight: Retain human oversight over AI systems to intervene when necessary, ensuring that AI aligns with business objectives and ethical principles.
Training and education: Provide training on AI ethics and compliance to finance teams, promoting responsible AI adoption throughout the organization.
Robust vendor assessment: When using third-party AI solutions, rigorously assess vendors for their adherence to ethical AI practices, ensuring alignment with your organization’s values.
Continuous improvement: Continuously monitor and enhance AI models, algorithms, and processes to proactively address emerging ethical challenges and adapt to regulatory changes.
By striking a balance between harnessing the potential of generative AI and implementing ethical, responsible AI practices, CFOs can unlock the full spectrum of AI’s capabilities within the finance industry while simultaneously mitigating risks and ethical concerns.