In 2014, Rolls Royce took four days to close month, without adding value and not being a financial business partner. Their operations were spreat out over seven enterprise resource planning (ERP) systems and automation was implemented with the intent to reduce business complexity and, on that roll, drive financial optimization. Today, the firm can retrieve the financial numbers with one click, explains The Global Treasurer.
Simplify, standardize and automate is the mantra of Niko Ratala, the regional financial controller at Rolls Royce PLC, that he used during the process of improving the treasury functions, stated the article.
The specific actions the employees took to simplify, automate and standardize were:
- Adjust minimum values to no posting below sums of 13.000 USD.
- Cut down on cost allocation between profit- and cost centers.
- Reduce detail volumes for financial reporting.
- Replace the seven ERP systems with one single operation. Further, a majority of operations were centralized to a shared service center in Singapore.
- Simplify by standardizing back office accounting processes.
- Automate processes where possible.
Automation – Enhanced productivity or messy redundancy?
Automation is commonly associated with productivity enhancement. Consequently, it can also uncover redundancy. At times, when treasurers take one step back to retrieve a holistic overview of their financial operations, they uncover an abundance of automated processes. As expressed in the Information Age, “don’t’ just automate for the sake of it”. In today’s digital climate, it is clear that automation is crucial, however, companies often struggle with where to begin, what and how to automate.
Technological disruption, new competition and reduced barriers to entry has pressured margins in the industry. Therefore, multinational companies must focus on staying lean, said Ratala said to The Corporate Treasurer.