As economies around the world step back from the previous several years of monetary uncertainty and begin adjusting to a new normal, companies face a different set of financial supply chain challenges than they did at the height of the downturn—among them are rising pressure from global competition, consumer expectations, and increasingly complex patterns of customer demand. Most global CFOs face the basic challenge of doing much, much more with much, much less and gaining cost savings while simultaneously improving quality, gaining productivity and improving visibility.
Organizations today are searching for nearly the same visibility in their financial supply chains that they enjoy in their physical supply chains -- minimize incremental costs at touchpoints to maximize working capital. The financial supply chain involves the flow and use of cash throughout the physical supply chain, where there is an accompanying flow of cash in the transfer of products, services and analytics.
Presently, corporations are seeking best practices in how to move from a working capital optimization theory to practical initiatives which will improve their corporate financial performance while maintaining both customer and shareholder satisfaction. Leading companies are reforming their financial supply chains to achieve the next wave of improvements in working capital. As new services come to market, finance executives are taking a second look at supply-chain finance to improve performance.
The goal of operative financial supply chain management is to increase the transparency and the level of automation of business processes along the financial value chain. The purpose is to save processing costs and reduce the working capital of the company. This definition doesn't consider where the financial supply chain actually begins and ends, because there are also analytical processes that are not directly related to a business process but which belong nonetheless to the financial supply chain. Presently, corporate finance organizations are facing unparalleled pressure to improve finance supply chain operations.
To be competitive, CFOs are looking to better manage the financial supply chain, integrate and standardize processes, achieve a return on technology investments, and manage risk while improving margins and reducing costs. In sum, improving performance with innovation and technology in financial supply chain management enhances finance operational efficiency, strengthens finance reporting and analysis, and improves finance control and predictability.