INDUSTRY INSIGHT
Why finance needs to embrace Industry 4.0 As the world progresses further into Industry 4.0, finance needs to further leverage new technologies to add real value to a business’ bottom-line. According to Mark Wilson, managing director at SYSPRO Africa, this concept remains in its infancy stages.
I
ndustry 4.0 has impacted a range of industries, and with the digitisation of industrial value chains, many forget about finance, which has only touched the tip of the iceberg when it comes to leveraging new technologies. Disruptive technologies such automation, artificial intelligence (AI), the Internet of Things (IoT), Bots, blockchain and machine learning are thrusting the global economy into a new digital era. Instead of seeing all these new developments in isolation, finance must focus rather on connection points, finding ways to optimise them to provide greater value to the organisation. Companies risk losing ground if they do not understand the changes and opportunities Industry 4.0 brings.
DATA REVOLUTION Industry 4.0 has seen information replace capital as the main asset driving the way finance operates, with data at the centre of business models. In the midst of the data revolution, organisations depend on structured,
organised data that is not only accessible but useful, especially software. Finance has been creating meticulously structured data for computing systems for decades, as evidenced by protocols such as double-entry bookkeeping, structured data has always been an essential part of finance. However, digital transformation and globalisation has forced companies to do more with less, with many now adopting a data-driven approach, relooking at enabling technology that supports granular details and integrated analytics. This approach has proven to be effective. In fact, according to McKinsey Global Institute, data-driven companies are 19 times more likely to be profitable. Without systems like Enterprise Resource Planning (ERP) many organisations are forced to use various programmes across departments. ERP systems break down these data silos, helping businesses analyse data so they can use resources more effectively and efficiently. As a result, bringing significant business value and understanding.
So, much like Industry 4.0, finance is data-driven, so it would be peculiar if the advantages of this new era did not carry over into the world of finance.
‘Companies risk losing ground if they do not understand the changes and opportunities Industry 4.0 brings’ ACCOUNTING IS KEY Let’s take a step back and look at ERP, which at its most basic level is accounting software. If you want to improve your company’s financial health, you need to know what is going on deep within the numbers. ERP systems record and keep track of all operations. For example, in the automotive
What is Industry 4.0? Industry 4.0 refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. Source: www.epicor.com 14
INDUSTRIAL BUYER NOVEMBER/DECEMBER 2019
