The findings of this white paper are based on a survey conducted by the KPMG network across the EMA region (Europe, Middle East and Africa). More than 700 responses were received from internal audit and (senior) management functions, spread amongst several industries across 32 countries.
The survey showed that there is a high degree of awareness of the potential benefits of CA and CM to organisations. Despite the interest to-date, only a limited number of organisations have been involved in an enterprise wide adoption of CA/CM practices, largely due to the lack of a suitable business case or their inability to effectively measure the benefits of such initiatives. However, with the growing risk assurance and monitoring interest, there are strong prospects for CA/CM practices to be adopted by more businesses in the foreseeable future.
The survey further revealed that the functions across an organisation gained added value from CA/CM practices, irrespective of whether they are initiators. Beyond other functions, internal audit remains the main initiator and beneficiary of CA/CM. Other services such as operational/line management is not usually the first initiator of CA/CM, but rather benefits from it.
Most respondents believe that CA/CM is best suited to support processes such as ‘financial management reporting’, regulatory reporting and ‘treasury and cash management’. Typically, the areas that tend to have the greatest return on investment (ROI) included ‘manual journal entries’, ‘time and expense’, ‘purchase to pay’, ‘p-cards’, ‘order to cash’ and ‘inventory management’.
From KPMG’s perspective, CA/CM functionality includes among others: data extraction, data analysis, case management and reporting. The survey identified limited insights into the availability and suitability of CA/CM tools as one of the key barriers affecting the adoption of CA/CM practices by business organisations. Other barriers included unfamiliarity and lack of knowledge of CA/CM practice. However, we noted that organisations are gradually changing positions from being interested in CA/CM to investing in CA/CM-related projects.
As our recommendation in benefiting from each CA/CM initiative, management should focus on achieving a healthy ROI, while focusing on lowering exposure to risks. Pilots may deliver results quickly and potentially help CA/CM to become auto-financing, thus fuelling the business case for an enterprise-wide CA/CM program.
Finally, organisations that are interested in CA/CM need guidance and sufficient information on the benefits and techniques associated with CA/CM. The success of a CA/CM initiative largely depends on its effective implementation and integration in day-to-day operations, as well as the judicious and effective use of and the right use of technology.