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The last quarter is already gone. As a Finance Expert you will soon start preparing the quarter-end close. You may remember an awful situation you faced during the year-end close: While your family and friends were enjoying the winter holidays, you needed to run the year-end close. You hoped that everything would run smoothly so you can get of the office on time. But when you checked the posting run just before leaving, you saw a red flag. Unfortunately, the error message was utterly unhelpful. It told you nothing about what went wrong, still less about how to fix it. So instead of leaving, you had to start a time-consuming analysis that you know will culminate in an argument with your IT department. If the error message had been better, however, you might have been able to solve the issue yourself, and faster.

As a Collection Specialist, you're responsible for gathering overdue payments from customers. If your customers don't cover all their invoices, you want to be notified as quickly as possible about their future payments. This allows you to deal with these instances proactively, rather than waiting to react to them. A prompt notification allows you to contact the customer immediately to resolve the situation and claim the remaining cash or even avoid disputes. Being able to chase missed or even skipped payments as soon as the payment advice is processed means more effective cash collection and a better-looking Days Sales Outstanding KPI.

Each scenario exemplifies the need to be able to spotlight issues requiring immediate attention. Instead of tediously searching through reports, application logs or calling various transaction, Finance experts expect to receive all relevant information automatically at their fingertips, all in one place, and in a way that's easy for them to consume and act upon.  Thus, Finance software needs to capture current business situations based on individually defined conditions, like thresholds, rules, or queries. It must proactively trigger notifications to ensure swift awareness of issues; explain the context from which they arose; include all relevant information, like affected postings; and, maybe most importantly, be intelligible to the finance expert receiving the notification. They demand not only to be notified of an issue but to get proactive suggestions on how to resolve it. Existing technologies like responsibility management can be leveraged to identify the appropriate users. Potential areas of application are:

  • Notification about upcoming deadlines

  • Information about pending tasks, such as approvals and confirmations

  • Highlighting surpassed thresholds, such as business-relevant KPIs

The future potential of Situation Handling is enormous as intelligent Finance software could capture business situations, their circumstances, any actions taken, and the results of those actions. In the future, these data could be utilized for advanced analysis, rule-based processing and input for machine learning. Machine learning could in turn be used to calculate predictions and to recommend better solutions. The software also needs to recognize recurring patterns e.g. analyze in what context the user accepts or declines the recommendation. This pattern recognition could be used to improve the machine learning algorithms. High-confidence responses could be considered in regular business processes and thereby get fully automated.

Situation handling offers a continuous improvement process for both high-quality, supported human handling and automation via machine learning. With the increasing availability of data over time, machine learning will expand its capacity to automate routine tasks. And with more and better data, situation handling will support users with analytics-based recommendations and process improvements. Manual processing and automation go hand-in-hand.

Now, how would you like to improve your day-to-day business using situation handling?