abstract digital technology operating system background template vector

Transactional processing

"No-touch processes" – how inhuman should a financial transformation be?
Home » Newsroom » Transactional processing

The digitalization and automation of business processes has become an essential part of corporate strategy. Companies are striving for process harmonization and almost complete automation of their processes on a global level. The declared goals here are to increase efficiency and reduce costs in order to gain a competitive advantage over their competitors. This transformation towards “no-touch processes”, in which human intervention is reduced to a minimum, is often seen as the optimal goal in the context of a financial transformation.

The no-touch approach, i.e. (almost) complete process automation, is not limited to a specific business model or sector. Processes for which this approach is frequently chosen have a high degree of standardization and repeatability. This includes end-to-end processes (E2E processes), such as order-to-cash, purchase-to-pay or acquire-to-retire.

There is generally a lot of scope here due to the high transaction volume within recurring processes, which are currently often handled exclusively in shared service centers. On the other hand, there are technical solutions whose automation potential has not been exhausted, although this would be possible without high ongoing costs (e.g. via SAP S/4 Finance).

Based on these simple theoretical assumptions, practical implementation is often much more complex and challenging. The basic prerequisite for meaningful financial process automation is always prior process standardization. However, initiatives to create a uniform standard often fail because decision criteria in the process are too complex, as they have usually grown with the company in an unstructured way over time. As a result, standardization and subsequent automation are often difficult to implement, as not only processes have to be analyzed, but habits also have to be broken.

csm standardisierung en 44fe7e5cbe
Figure 1: Standardization is the starting point for all automation

Despite the ongoing operationalization of artificial intelligence methods, in particular the sub-discipline of machine learning, many processes still require manual intervention and human interaction.

It often turns out that the theoretical business case cannot be realized during implementation. Instead of the expected increases in efficiency, cost savings or quality improvements, considerable resources and costs are required. The frequent consequences are inflexible processes with limited responsiveness, a reduced focus on customer needs and rising infrastructure costs.

So let’s bundle these challenges into one fundamental question: how “inhuman” should financial process automation be? In other words, what is the optimal balance between human and machine involvement in financial processes to maximize efficiency and benefit?

Due to the large number of factors influencing the answer to this question, there is no universally valid answer – it always depends on the company situation, the process, the project context and many other factors and must be assessed individually.

However, there are key influencing factors that must be taken into account in any decision to implement process automation. We divide these into internal and external factors:

External factors

In contrast to internal factors, external factors include characteristics, conditions or influences that are outside the direct control of a company. Nevertheless, or precisely because of this, they play a decisive role in determining the balance between automation and manual intervention in financial processes. These factors, including legal requirements, current trends, competitive conditions, technological developments, societal changes, economic conditions and customer requirements, can present both opportunities and challenges for automation and require continuous adaptation of the strategy in this regard. The following figure summarizes some of the external factors:

csm external factors2 226096dd0c
Figure 3: External factors are unavoidable, but they can also be beneficial to financial automation

Let’s start by looking at a global technology company. Due to its enormous size and high volume of financial transactions, it relies on automation technologies to ensure efficiency and accuracy. However, legal requirements in some areas may require human intervention to ensure compliance. Current trends such as artificial intelligence and data analytics could further drive automation, but societal changes, particularly concerns about the impact of automation on jobs, require careful consideration. Competitive conditions may require increased automation to gain a competitive advantage, while customer needs require a balance between automation and individualized attention.

A start-up company, on the other hand, has different challenges and opportunities. With more limited resources, it must invest wisely in automation technologies that bring the greatest benefit to its financial transactions. Economic conditions play a decisive role here. Current trends and technological developments may open up new opportunities for automation, while societal changes and customer needs may require a greater emphasis on human intervention. Especially in service-oriented industries, the need to ensure a high level of customer satisfaction may limit automation.

Overall, these external factors influence the balance between automation and human intervention in financial processes and require careful consideration and continuous adjustment of business strategy.