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The Future of Finance: Navigating Operational Excellence
An exclusive event organised by BW Businessworld for SAP with prominent industry finance leaders held in Bangalore unveiled the dynamics of financial evolution navigating the economic horizon in India's financial landscape: Excerpts
Photo Credit : Freepik,
Ashwani Narang, Head of Spend Management at SAP India, began by introducing the topic of the Indian economy and its connection with the changing scenario in the global market. He shared statistics about SAP's global presence and impact on India's GDP, manufacturing, and other sectors. He highlighted the positive aspects of India's economic growth, citing examples from the pharmaceutical and cement industries. He discussed the importance of sustainability and resilience in business priorities.
He underscored SAP Concur's seamless integration with various services for streamlined expense filing, emphasising the importance of balancing user experience and policy compliance. The talk extended to the post-trip phase, where expenses undergo thorough audit rules for a comprehensive and compliant travel expense management experience.
Tech-Driven Solutions for GST:
The financial sector is undergoing a significant transformation with the adoption of these tools, which can identify potential risks and prevent fraudulent activity. Financial institutions are required to adhere to regulatory requirements, which means that AI-powered compliance tools are becoming a crucial part of the financial industry.
Nikhil Kamat, Business Director, Accounts Payable Automation, SAP, advocated for technology to solve business problems in India focussing on Financial compliance and the resulting Cash flow impact. He took the example of a regulatory mandate on GST compliance. The invoice mismatch and unpaid taxes by vendors lead to a cash flow impact for buyers due to the inability to claim input tax credits on time.
He highlighted the concept of a "technology crystal ball" to streamline interactions between the government, suppliers, and businesses, leveraging SAP ERP and a global vendor portal. He pointed out four crystal balls, i.e., addressing real-time information exchange, ITC forecasting, invoice validation, and GST reconciliation. He highlighted reduced cycle times and financial opportunities such as bill discounting and supply chain financing. He covered digital tools, mobile apps, vendor onboarding, and an upcoming government rating system for vendors, with an emphasis on a unified system for businesses that can function as profit centers within the accounts payable ecosystem.
Anand Agnihotri, Head of Partnership, SAP Concur, initiated the panel discussion on the challenges associated with Goods and Services Tax (GST), focusing on input tax credit (ITC) related to employee-initiated spending. He introduced a diverse set of panels with unique backgrounds, ranging from finance and entrepreneurship to government service and consulting. Anand outlined the overarching challenge of GST and ITC in the context of employee spend and aimed to explore specific difficulties faced by each panellist. The discussion promised to offer diverse perspectives and insights from professionals with varied expertise.
Mihir Ranjan Panigrahi, AVP, of Finance Shared Services at Hindustan Coca-Cola Beverages, discussed the positive evolution of implementing SAP Concur at an undisclosed organisation, particularly during the COVID-19 pandemic. He highlighted the shift from manual to paperless operations, emphasising benefits and challenges in employee-initiated spending, specifically in air travel and lodging. Ranjan envisions the need for ecosystem integration and automation to enhance efficiency, emphasising ongoing evaluations for sustainable solutions. The discussion touched on GST compliance complexities and the desire for real-time, seamless processes, envisioning an automated future for increased productivity.
Keya Shukla, VP, of Product Management, Finkraft.ai, and Former Assistant Commissioner, GST addressed the evolution and challenges brought about by the implementation of GST in India, particularly focusing on its impact on corporations. Reflecting on the simplicity of the earlier VAT system, Keya highlights the increased complexity and transparency introduced by GST. She emphasised the empowerment of GST officers with comprehensive reports and access to supply registers, creating a need for corporations to acknowledge and account for expenses, especially employee-initiated expenditures. Keya noted the challenges faced by corporations in claiming GST credits, citing instances where technology-rich solutions are crucial. She anticipated audits becoming more intricate and urged corporations to adopt technology-driven solutions for effective compliance. Keya stressed the importance of being one step ahead of the government, utilising technology for real-time reconciliations, risk assessment of vendors, and addressing potential litigation. She envisioned a future where AI-driven government notices must involve corporations proactively and employ technology to avoid disputes and focus on productive financial decision-making.
Rohit Anand, CEO of Finkraft.ai, discussed the genesis of the company, driven by a customer's concern about significant financial losses in travel spending post-GST implementation. He outlined the ecosystem's broken state, citing issues with airlines creating proper invoices, travel agents stepping back, and the complexities arising from the destination-based revenue distribution mandate. Rohit emphasised the need for a platform integrating all stakeholders, including expense tools, travel agencies, credit card companies, airlines, hotels, and the GST portal. He stated that the success of the venture relied on the collaboration of major travel agencies and airlines, creating an end-to-end touchless automated process. Rohit highlighted three key aspects of the product solutions: the vendor score for transparency, improved reconciliation with 64-digit IRN matching, and obtaining digital data for informed, compliant decisions. He addressed the vision to achieve collaboration and maturity in the ecosystem, enabling stakeholders to negotiate better rates with improved data.
Aniket Verma, Principal Solution Consultant, SAP Concur, discussed the strategic decision to collaborate with Finkraft.ai, an expert in the domain of GST reconciliation for employee expense management. He emphasised integrating the Concur platform with a partner possessing domain expertise, leading to enhanced regulatory compliance. The value proposition centres around ensuring every dollar spent aligns with both internal company policies and government GST regulations. He highlighted the importance of maintaining a positive employee experience amid these technological improvements, emphasising the separation of technology-driven reconciliation, compliance, and reclaim processes from the end user's perspective. The speaker underlined the critical role of awareness, both among employees and suppliers, regarding the importance of providing the right kind of invoices for GST compliance and reclaim. He further said that there's a need for internal finance teams to be educated on adopting technology for more efficient and accurate processes.
Strategic efforts towards ROI:
Hoshie Ghaswalla, CEO of BW Engage, commenced the discussion by recounting a recent personal commitment to sustainability. He talked about the impact of COVID-19 on elevating awareness and governmental mandates for sustainability during a panel discussion involving finance leaders. He concluded by urging colleagues to initiate sustainability changes at a personal and organisational level, emphasising the need for a mindset shift and realistic goal-setting to ensure a harmonious blend of societal, environmental, and financial considerations.
According to predictions made by the World Economic Forum (WEF), Asian businesses could generate approximately 4.3 trillion US dollars in revenue by 2023 through initiatives such as increasing the use of renewable energy, improving building energy efficiency, and promoting greater circularity in the producing industries, which account for approximately 43% of the global market.
Vijay Kumar Nagaraju, Deputy General Manager, Environment, Sustainability, and ESG, Brigade Enterprises Ltd., detailed Brigade's extensive commitment to sustainability, particularly their decade-long focus on green building certification. The organisation, under strong leadership, has embraced sustainability driven by voluntary and inspired efforts to meet the expectations of different stakeholders. Initiatives involve employee engagement, conducted ESG gap assessment against the current trends, and ambitious ESG targets such as achieving net zero and water positivity by 2045 and 2030, respectively. He also touched on the challenge of measuring ROI for sustainability efforts, emphasising the ongoing process of strategic efforts and a future expectation of returns by signing a Science-Based Targets Initiative (SBTi) commitment letter, with ongoing efforts focused on engaging the entire organisation and value chain. Nagaraju highlighted the importance of a mindset shift at both individual and organisational levels for successful sustainability practices.
Pravin Dalal, DGM Environmental Sustainability, Shahi Exports Pvt Ltd., highlighted the critical role of sustainability in the garment export industry, emphasising the consumer's growing consciousness. He discussed the company's sustainable practices, with a focus on implementing renewable energy, including a significant investment in a solar power plant and wind power mill. Dalal noted the challenges in convincing brands to prioritise sustainability but highlighted their success in aligning with brand goals and achieving Shahi`s 70% electrical renewable energy usage in 2022-23 and ambitious journey towards carbon neutrality. He emphasised the top-down and bottom-up approaches to fostering sustainability within the organisation, crediting a supportive management team and emphasising the importance of talent retention, brand image, and positive reputation as motivators for employees. Overall this helps to create sustainable atmosphere in the organisation and journey towards sustainable goals becomes easy.
Gen AI evolution empowering CFOs:
The business landscape is rapidly evolving with the advancements in processes that tend to bring significant change in data-driven decision-making, and generative AI is becoming that transformative force. A CFO equipped with generative AI drives insights and leads innovation, empowering financial leaders to navigate growth.
Srivatsan Santhanam, VP, Spend Engineering, SAP Labs, India, discussed the transformative impact of Gen AI on the finance sector. He highlighted the evolution from narrow AI to a mature, human-centric AI era, emphasising the shift towards citizen AI. A survey of CFOs revealed that 67% believe AI, including Gen AI, is crucial in handling uncertainty. He talked about Business AI and how it enables insights for optimal choices, integration with a digital assistant, and seamless expense reporting infused with AI. The aim is to empower CFOs to ask questions via prompts and tools that provide real-time insights, reduce manual efforts, and enhance overall efficiency in financial functions.
Reshma Jayadeva Prakash, Senior Product Manager, SAP Concur Spend, focused on Gen AI's transformative capabilities in travel and expense management, emphasising streamlined processes. Notably, the system facilitates effortless receipt handling, real-time hotel itemization, and quick expense reimbursements. SAP Analytics Cloud introduces a user-friendly "Just Ask" feature for custom reports, eliminating IT dependencies. Gen AI aims to be a trusted CFO companion, prioritising trust-building, explain ability, and prompt engineering. Integration with SAP's Gen AI assistant - Joule, simplifies policy understanding catering to Employee Spend control mechanism. She talked about practical applications like Request Cost Estimator and AI Insights for Travel to showcase Gen AI's efficiency. She shared that the overarching goal is to enhance user experiences in expense and travel management, emphasising collaboration for increased efficiency.
Pratap Daruka, CFO and EVP of Tredence Inc., discussed generative AI (Gen AI) in finance and sees it as a promising ally, urging swift adaptation despite evolving trust issues. He outlined a strategic approach, highlighting their organisation's 360-degree platform as a precursor to GenAI integration. He emphasised the importance of high-quality data and advocated for productivity and automation in transactional finance and real-time insights in strategic finance. Daruka envisions Gen AI revolutionising internal data analytics but acknowledges limitations in external reporting. He also mentioned investments in conversational AI for knowledge management, foreseeing significant productivity gains.
Jagannathan Chakravarthi, CFO of Sonata Software Limited, embraced Gen AI as an inevitable force, emphasising the urgency of adaptation for survival. He envisioned Gen AI impacting operational support and fraud detection significantly. Chakravarthi anticipated a reduction in finance team size due to Gen AI automation and foresees a shift from traditional to real-time insights. While recognising challenges in regulatory reporting, he acknowledged the technology's potential for strategy and operational enhancements. He shared his organisation's commitment to AI adoption, focusing on analytics, investor relations, compliance management, and exploring the potential demise of coding in favour of no-code or low-code solutions.
Sandip Goenka, CFO of ACKO Life Insurance, noted Gen AI's relevance in management discussions, emphasising its phased implementation due to governance and data privacy risks. He explored use cases, including cost, productivity, revenue generation, customer retention, and fraud management. Goenka discussed the efficiency of daily financial reporting, cautioning against analysis paralysis. He saw Gen AI as a self-funding investment, contributing to both top-line and bottom-line improvements.
Ramani Dathi, CFO of TeamLease Services Limited, stressed the indispensability of Gen AI in managing large-scale operations, particularly in supply chain businesses. She talked about the focus on automating the hiring process, from interviews to onboarding and lifecycle management, to enhance efficiency. Dathi expressed confidence in overcoming resistance to automation, drawing parallels to historical concerns about job displacement. She also acknowledged the evolving regulatory landscape, especially in real-time accounting, and highlighted that Gen AI can drive productivity, reduce costs, and enhance quality for early adopters.
Srivatsan Santhanam, VP, of Spend Engineering at SAP Labs, India, concluded by discussing the challenges faced by the finance function, traditionally viewed as hyper-conservative, in adopting Gen AI while moderating the panel discussion. He emphasised the resistance and comfort within the industry regarding the impact on decision-making and job roles. Santhanam highlighted the ongoing struggle between old-school automation for operational efficiencies and leveraging AI for strategic insights. He spoke about the concept of continuous accounting and questioned whether organisations are ready to shift from traditional quarterly closures to a more dynamic and continuous approach.