Financial consolidation is often viewed as the “engine room” of the finance function. It plays a crucial role in providing accurate and reliable financial information. However, as businesses face mounting complexity and regulation, the design of legacy consolidation systems, especially on-premises solutions, is starting to unravel.
Data management is now the pre-eminent concern. Legacy systems designed around the capture of monthly balances are simply ill-equipped to deal with the complex data demands of the modern era. Despite these shifts, research shows that only 11% of companies have completely transformed their financial close process.
The Strain of the Evolving Data Landscape
Modern finance functions are moving away from relying solely on strictly codified financial data. Today’s reality requires merging granular financial and operational data to drive business insight. This shift puts immense strain on the close process in three key areas:
- Data Accessibility: Finance functions need tools to quickly ingest data from a variety of sources without heavy IT involvement.
- Data Quality: Automated capture and validation controls are essential to maintaining high-quality data across new, unstructured data sources.
- Model Flexibility: Organizations need malleable, extensible consolidation models that can accommodate diverse, asynchronous dimensions.
Beyond Automation: Deep Insights with AI and NLP
Artificial intelligence (AI) has stormed to the top of the CFO agenda. Solutions like CCH Tagetik are already building proprietary AI capabilities into their platforms to transform the consolidation process:
- Accelerated Validation: AI isn’t just for mapping; it is used to investigate data anomalies and outliers, drastically speeding up the validation phase.
- Uncovering Hidden Drivers: AI identifies hidden drivers that contribute most to performance, allowing CFOs to enrich the story of their results with consciousness.
- Narrative Reporting: Generative AI can automatically generate narratives and disclosures, saving significant time in the final reporting stages.
- The Future is Vocal: Natural language processing (NLP), which allows for speech-based report generation, is now clearly within reach.
Did you know?
AI needs high-quality data to deliver rich insights, yet research finds that only 53% of businesses have at least 5 years of historical data.
The ESG Mandate: Managing the Unaudited and Estimated
In the new era of ESG, CFOs are thrust into an environment of unfamiliar environmental and other data. Unlike traditional financial figures, ESG metrics are often forward-looking, unaudited, and frequently estimated.
Because ESG is a cross-functional effort involving many stakeholders, it requires a unified, consistent reporting environment that enables seamless collaboration.
Future-Proofing Your Finance Function
Whether it is satisfying AI’s hunger for data or meeting the varied requirements of ESG, the message is clear: finance leaders must rely on extensible and scalable consolidation models. Data management is the thread that runs through every near-term challenge.
CCH Tagetik provides the software needed to manage the entire journey, from local close and group consolidation to regulatory reporting and disclosure.
Check the comparison of legacy consolidation and close processes vs CCH Tagetik’s solution
Take the Next Step
Don’t let your “engine room” stall. Explore how to modernize your consolidation process today:
- Watch the On-Demand Webinar: How Can CFOs Make Financial Consolidation Fit For The Future?
- Discover the Solution: Learn more about CCH Tagetik’s expert capabilities.
- Get in Touch: Contact CRMT to discuss how we can help you implement a future-proof consolidation strategy.
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