By John E. Luth
As part of my series of articles exploring the evolution and transformation of the aviation CFO’s role, and his or her finance staff, I would like to discuss the importance of digital technology.
Transforming through technology
Airlines are renowned for being hindered by legacy systems and struggle to be both agile and have a single version of the truth. For those reasons, it is ever more important for today’s airline CFOs and their senior staff to aggressively map out a path towards automating a sizeable slice of their existing functional areas as a means of transforming the finance organization away from transact, account, control, comply and report and toward plan, analyze and advise.
Based upon our extensive experience in transforming the finance and accounting functions in across a multitude of other industries (including hospitality) as well projects underway at various airlines clients, Accenture’s research shows that up to 60-80% of the activities performed by a typical finance function can be eliminated via systems automation, robotics and by carefully applying artificial intelligence (AI). Given the byzantine legacy systems often hobbling an airline’s finance function, this requires a careful mapping of the future airline finance function. This often can be best accomplished by revamping processes and systems as part of moving most of these functions to the cloud.
Innovative airline CFOs are leading the way with automation of routine accounting, control and compliance functions. Increasingly, airline CFOs are focused on value creation as digital technology empowers them to shape the strategy of the enterprise in collaboration with the airline’s CEO and other C-suite executives. In particular, the search for one truth in analyzing and reporting key information remains one of the most important tasks that a CFO is tasked with.
Toward a single version of truth
As part of our report “From Bottom Line to Front Line”, we interviewed CFOs of major global enterprises and found that efficient compilation and extraction of financial information is essential. Indeed, 76% of the CFOs we surveyed agreed that without “one version of the truth” across business units, their enterprises will struggle to meet their objectives.
Steve Young, Executive Vice President and CFO at Duke Energy in the US said, “We have put together a financial hub that provides one version of the truth, which has cut down on people getting different answers from the data because they have extracted it from different sources.”
Our research found that outside of aviation, finance functions are already using a variety of emerging tools to mine data gathered by their enterprise – from predictive analytics (74%) to AI (61%). Rubens Bastista, CFO of the Brazilian supermarkets group Martins, is one finance leader keen on using analytics in his operations. “Its early days for us, but we are using predictive analytics to better understand our cash flows. We are making more connections and learning all of the time,” he stated.
Following the digital lead of other industries
According to “From Bottom Line to Front Line”, 77% of CFOs globally are heading up efforts to improve efficiency through adoption of digital technologies. However, most airlines are not (as yet) significantly applying robotics and AI across their enterprise. That’s the bad news. The good news is that airline CFOs have an opportunity to take charge of digitalizing their organizations leveraging pioneering work by CFOs in other industries.
In my next blog, I will explore how CFOs of global enterprises are empowering their C-suite colleagues and the central role of finance in driving change across their organizations.
Exploring the future of the function
Explore the major themes influencing the shift in my blogs: