Introduction
Many companies face two main challenges: the burden of accounting work and the ability to add value to management decisions. How can we free companies from traditional spreadsheet work while simultaneously becoming a partner in their business strategy?
This article explains the validity of modern accounting DX (Digital Transformation) through real-world examples ranging from large corporations to startups. You will gain concrete insights to redefine the "essential value of the finance department."
Become the "right-hand man of the business unit head":
Three Steps to Transforming the Accounting Department and the Future Vision
In recent years, a wave of significant change has swept through corporate accounting departments. Organizational reforms, already seen in major pharmaceutical companies such as Daiichi Sankyo and Takeda Pharmaceutical (both with market capitalizations of approximately 13 trillion yen), are accelerating even further. Why is this happening?
In conclusion,"Organizational reforms implemented as part of strengthening financial strategy"is.
2017,Chugai PharmaceuticalThe company introduced a new system called "Finance Business Partners." This marked a shift from the traditional head office-based accounting to assigning financial personnel to each business unit and division. This was not merely a departmental reorganization, but a groundbreaking attempt to make finance personnel function as "bridges that understand the field."
Specifically, we will proceed with the transformation in the following three steps.
Step 1: Placement in business divisions and bipedal system
- They adopt a "two-pronged approach" that combines both headquarters and business perspectives.
- While being assigned to a business division, reporting is balanced between headquarters (60%) and the finance and accounting department (40%).
- CFO Iwaaki Taniguchi emphasized that "a practical understanding of the field is essential for effective management."
Step 2: Streamlining operations through digitalization
- AI automatically generates and inputs 70% of tax classifications in payment processing.
- Freed from administrative tasks, the accounting department can now focus on analytical work.
- SMBC (Sumitomo Mitsui Financial Group) has automated approximately 751 TP3T processes across all its operations.
Step 3: Responding to the disclosure of sustainability information
- "Carbon accounting," the measurement and disclosure of CO2 emissions, is set to be legalized.
- We have introduced a system that centrally manages data distributed across 600 locations.
- Itochu Corporation is an emerging vendorBooost Co., Ltd.In conjunction with this, we are willing to accept the risks and make DX investments.
These transformations are shifting the essential value of the accounting department from "simply cutting costs" to "providing a basis for management decisions."
Creating Added Value Through Digitalization: Specific Examples and Benefits
Point 1: A fundamental understanding of RPA (Robotic Process Automation)
While RPA is being adopted by many companies, it's not simply about automating administrative tasks. For example, in this era of labor shortages, it's a grueling task for applicants to manually determine and input hundreds of different account titles and tax classifications. By combining generating AI with rules to "automatically display the correct account titles and classifications," humans can focus on more advanced analysis.
Kei Yamamoto of SMBC FG asserts, "The quality of accounting changes the quality of management." In other words, after streamlining and standardizing accounting operations and achieving automation with 75%, resources should be allocated to providing information that is useful for management decisions.
Point 2: A new concept: "Co-creation Accounting"
Recruitment services for startup companies"Star Mine"We practice our unique theory of "co-creation accounting." While traditional accounting was merely a tool to explain past performance, we have redefined it as a management system that generates value.
Specific mechanism:
- The meetings where each department reports on budget progress and performance have been abolished.
- Instead, we hold a co-creation accounting meeting once a month.
- Transforming into an interactive space where we can think together about the meaning behind the numbers.
- The accounting department conducts transactions within the company at service prices and treats each department as a customer.
In the fiscal year ending February 2014, sales reached a record high of 1.58 billion yen. Operating profit is also projected to increase by 70% compared to the previous year. Even small businesses can create added value.
Point 3: Mandatory Sustainability Disclosure and Response
In response to the growing need for measures against global warming, compliance with the SSBJ standard (sustainability information disclosure) has become an urgent necessity. Companies with a market capitalization of 3 trillion yen or more will be required to comply from the fiscal year ending March 2015, and companies with a market capitalization of 1 trillion yen or more will be required to comply from the fiscal year ending March 2016.
Previously, disclosure was voluntary, but legal disclosure requires a significantly higher level of accuracy, making system support essential. Itochu Corporation adopted a tool from emerging vendor Booost Inc. and gained the following benefits:
- Freed from on-site Excel work
- Real-time status monitoring is possible without sending files.
- To prepare for audits by audit firms
The key lesson learned is that "we reduced risk by not completely handing over the development to the vendor, but instead working together as a team."
Points to note regarding accounting DX: Avoiding vendor lock-in and maximizing ROI
Supplement 1: Talent Strategy for Developing "Digital Right-Hand Men"
Human resource investment is essential for organizational transformation in large corporations. Mr. Taniguchi of Chugai Pharmaceutical expects that "M&A and investments may occur in order to achieve future growth. We want our finance and business partners to play an active leading role."
In other words, the key to success lies not only in introducing digital tools, but also in reassigning finance personnel as "members of the business divisions." The balance of reporting 60% to business divisions and 40% to headquarters is a measure to maintain perspectives from both the field and management.
Supplement 2: Risk Management of Vendor Lock-in
Taking the emerging vendor Boost Inc. as an example, Itochu invested in the company after recognizing its product strength in handling sustainability disclosures for large corporations. The strategy is to "increase sales by utilizing its own customer base." This reduces "dependence on a specific IT company."
Generally"Vendor lock-in"While there is a risk known as [this], Itochu decided that it was necessary to take a step ahead, even though it acknowledged that there was a significant risk in a company with consolidated net profits of around 900 billion yen relying on a startup with around 100 employees for its information infrastructure.
Supplement 3: Practical application of maximizing ROI (Return on Investment)
It is important to invest not just to cut costs, but also with a focus on creating value. Mr. Yamamoto of SMBC FG has stated that they will "maximize the rate of return on investment."
in particular:
- Automating approximately 751 TP3T of accounting tasks will reduce the level to 721 TP3T-881 TP3T, eliminating the need for human verification.
- The remaining 25% will be used to focus on analytical work that will aid in business decision-making.
- Strengthening management decisions through improved service value.
This is the essence of the shift from "mere cost center to strategic partner."
Summary
The term "digitalization" has resonated with many companies in recent years, but its reality is multifaceted. From spreadsheets to AI, from field personnel to strategic partners, the transformation of accounting departments is not merely about improving operational efficiency. It is a transformation into an "infrastructure that supports management decision-making."
When we look at organizational reforms in large corporations, the question arises: why bother placing finance personnel within business divisions? The answer is clear: "In an environment where business structures become more complex and uncertainty increases due to global operations, it is necessary to further scrutinize financial management as part of risk management."
Chugai Pharmaceutical's Mr. Taniguchi's "two-pronged approach" is insightful. It demonstrates that individuals with perspectives from both headquarters and business divisions are capable of making strategic decisions while understanding the realities on the ground. This approach is applicable even to small businesses. The concept of "co-creation accounting," which views the accounting department as a customer of each department and promotes value sharing, is effective regardless of scale.
The mandatory disclosure of sustainability cannot be ignored. Responding to carbon accounting, which will become mandatory for companies with a market capitalization of 3 trillion yen or more in the fiscal year ending March 2027, is an investment not only from the perspective of "environmental measures" but also for "enhancing corporate value." What we can learn from Itochu Corporation's case is the importance of risk diversification through partnerships with emerging vendors and long-term investment in digital transformation.
The most important realization is the idea that "accounting is not just management, but a business that treats each department as a customer." By adopting this approach, you can shift from simply reducing costs to creating value. By continuously maximizing ROI (Return on Investment), you can practically support the assertion that "the quality of accounting changes the quality of management."
Digitalization is not merely a tailwind, but a turning point towards strategic partnerships. To achieve this, it's necessary to cultivate talent like "finance business partners" and implement value-added approaches such as "co-creation accounting." Regardless of size, the accounting department can become a cornerstone of management decisions. This is a survival strategy for modern companies.
