Fast financial closing opens up new possibilities
6 MINS READ
STREAMLINING OF MANUAL ACTIVITIES
Digitalization has delivered a range of benefits to enterprises, chief among them being the streamlining of manual activities.
At Tata Consultancy Services (TCS), this has also meant the complete reimagining of the financial closing process. The outcome? Faster closure of books and less lead time for quarterly and annual results announcements, to begin with.
As a result of the fast closure of our books, our business leaders can make rapid and confident decisions, with a complete real-time view of operations. Fast closure has been enabled by digitized business performance metrics and by leveraging TCS’ Machine First™ Delivery Model (MFDM™).
In-memory computing has helped TCS achieve near real-time reporting, which enabled the release of profit and loss (P&L) results for FY20 on Day 1 and a consequent result declaration in seven days (our fastest turnaround time to deliver quarterly results).
This swiftness provided a lead time of 10-15 days for our leadership to make decisions and chart an immediate course of action for subsequent quarters. The process has been made automated and intelligent through AI, giving us a continual and valuable stream of data and analytics to help us stay on top of our game operationally.
The ability to generate P&L statements on Day 1 for an organization with half a million associates across 47 countries is no mean feat. The leveraging of multiple technology stacks and optimization of complex financial accounting processes made this reimagination program one of the most innovative in the finance domain. This transformation also paved the way for paperless AGMs and digitalization of operations in a considered manner.
Last but not the least, auditable financial data was delivered faster and more accurately through global data consolidation. This was possible thanks to standardized performance management, core accounting, and vendor management processes. All governance aspects were built into the system and were demonstrated to auditors at lightning speed.
The TCS advantage
The lead time for our P&L statement dropping to 10 hours from the earlier 120 hours has unlocked a slew of business benefits for us.
Where earlier our quarterly results were published in the last week of the next quarter, we now manage this in a mere two weeks after the close of each quarter, so our shareholders stay informed in real time.
Fast financial closing has also helped us optimize our human resources. Given the earlier pace of work and levels of human intervention required during financial closing, all teams were on alert and available 24x7 for an extra five-day period, and back-up staff for longer. Now, we accomplish this in just two days – the last day of the month and the first day of the following month, thereby freeing up these teams for other tasks.
How it came together
The reimagination of the financial closing process saw the involvement of around 10 multi-located agile teams working in tandem and was jointly driven by two units – internal IT and finance.
Agility and design thinking played key roles in the end-to-end process. Technology initiatives that were implemented within the finance ecosystem included cognitive monitoring through TCS ignioTM, in-memory analytics, and self-service reporting.
The focus remained on core process simplification, digitalization, automation, and identifying the best technologies to enable this. The objective was to eliminate the possibility of human error, mitigate duplication and redundancies, and strengthen the fitness of our financial operations.
This transformation has not just helped us punch one more hole in our enterprise agility belt, but also made our internal financial ecosystem robust and future-ready to handle operations at scale, giving the leadership enough lead time to plan future quarters.