The role of the CFO is changing. Today, it commonly includes finding new sources of value, fending off digital disruptors, and driving company-wide transformations. But before they can lead a large-scale transformation, CFOs have to modernize their own operations and liberate their people from time-consuming routine tasks.
In 2020, AWS’s global finance team was spending more than 150 hours a month manually processing non-standard customer contracts to ratify revenue recognition. It was tedious work, and with AWS’s revenue growing at 40% a year, the number of contracts to review was rapidly increasing. The finance team was having trouble keeping up, and it became clear that there must be a better way to manage the work than adding more people to the team.
The answer was an Intelligent Document Processing tool.
The Challenge: Manual Document Processing
It’s common for finance departments, even at Fortune 500 companies, to do 90% of their work in Microsoft Excel and to have teams of people processing large volumes of paperwork manually. At AWS, highly qualified analysts would load each contract into a system for scanning and extraction of the key contractual terms, and load them into Excel worksheets.
Mike Pokorny, director of AWS accounting, needed a way to keep pace with the mounting workload and free up analysts for higher-value work. He reached out to the AWS ProServe team for help.
The Solution: Automatic Intelligent Document Processing
In three weeks, the team designed and built a solution they called Intelligent Document Processing for the CFO (IDP-CFO). The tool automatically converts printed contracts into digital form, extracts key contractual terms, and organizes them in a database.
The Intelligent Document Processing solution reduced the time analysts spent reviewing contracts by 80% and brought several other improvements:
- Reduced the number of people-hours from 150 hours to 30 hours per month
- Decreased the number of analysts involved from five to one
- Shrank the average processing time for a contract by 80% to less than a minute
- Reduced the number of contracts needing manual review by 85%
We’re saving hundreds of hours a month in people, time, and effort that we’re able to redeploy to other areas of our accounting function, to support AWS growing more quickly.”
More importantly, the tool liberated analysts from routine, manual work to spend more time on higher-value financial analysis and supporting AWS’s growth. Additionally, the analysts enjoy working with cutting-edge technology. Because the tool captures all the pertinent contract data, they can use it to derive insights about the contracts, such as which terms are most likely to lead to missed revenue opportunities.
We’ve been able to redeploy people to things that they enjoy doing much more, and that helps our business.”
The IDP-CFO can take on any document analysis task thanks to two unique features not available in other tools:
Flexibility: The AWS solution uses natural language processing (NLP) to identify the contractual terms and their values wherever they are written in a contract. Often, competing products can only find the relevant contract terms when they are organized in a particular way, such as in a table.
Machine learning: The ML component enables the tool to continuously improve at identifying terms in different documents. When a document is manually reviewed, the technology learns from what the human did to fix the exception and autompatically applies that learning moving forward. Thereby ensuring finance leaders don’t have to become experts in any complex technology to use the tool.
The IDP-CFO tool can be used to automate many accounting processes such as accounts payable, accounts receivables, account reconciliation, and vendor and employee onboarding. For example, Broadridge Financial Solutions, a fintech company, that provides public companies with financial documents and shareholder communications solutions, used it to automate a manual process for analyzing proxy forms. IDP-CFO extracts Environmental Social Governance (ESG( and other data so the firm can predict challenges in upcoming shareholder meetings. Previously Broadridge had a team of 160 people who spent more than 50,000 hours a year collecting data manually. Now with the IDP-CFO tool, the firm can generate insights from more than 5 million proxy voting data points going back more than 10 years,with a significant reduction of people hours.
One of the first steps in finance transformation is to digitize documentation and automate as much as possible. IDP-CFO enables finance departments to take that first step toward embracing the digital age without building their own tool or adapting another that isn’t as effective.
We took something that is highly manual and repetitive, and we’ve automated it in a way that has drastically simplified what we do.”
Please contact your AWS account manager if you are interested in learning more.