Most companies have tried at some point to automate and streamline financial processes. But these initiatives often focus more on reducing costs than on adding value. This may be a mistake. The most valuable processes do not simply stream money and data between different functions, departments and business entities; they also feed reports, tests and controls that help managers become more proactive. Are sensitive transaction processes properly segregated and monitored? How flawless is the revenue recognition process? Will business decisions still make sense after a spike in oil prices, a bank failure or a drop in demand? The best processes flag these and other risks, helping managers to make informed decisions and ensuring compliance both with the law and with corporate policy.

Adding this kind of value to financial processes stands at the heart of a broader initiative known as governance, risk and compliance (GRC). Governance is the collection of board and C-suite approved policies that guide the company; GRC refers to the way those policies are put into operation as a set of rules, processes and controls. When the components of GRC are embedded within financial processes, they not only track financial flows but also alert management when things are in danger of going awry. In this way, GRC can help companies modify their processes over time in order to adapt continuously to emerging risks. Companies that fail to use their financial systems in this way may be missing an opportunity to manage risks more efficiently while improving the quality of decisions.

To find out how senior executives view their financial processes, the Economist Intelligence Unit surveyed a global sample of mostly financial executives in September 2008. Some respondents focused on the importance of developing processes that reduced costs and improved efficiency. Others acknowledged the importance of cost and efficiency, but also recognized that automated financial processes could be used to control risk, improve decision-making and enhance control.