Global expansion was once reserved for multinational brands who had the resources needed to overcome the complexities of supporting distinct local markets. However, the internet and the emergence of e-commerce have made globalization a critical strategy for every company—no matter the size or industry.
As business operations continue to expand, coupled with almost instantaneous communications, globalization has changed the way finance executives and their teams approach international expansion.
Globalization is the increasing integration of economies around the world, including the movement of products, services, technology, and information across borders.
While global expansion has many strategic advantages, such as a broader reach, new suppliers, and more revenue streams, it also introduces significant complexities in managing and complying with local laws and global regulations. You’ll be competing online in foreign markets or opening new offices overseas with intricacies, including different:
To succeed, you’ll need the right adaptation strategies to take hold of opportunities provided by effective global operations.
Globalization initiatives often start within your finance department, as accounting teams will create new companies, entities, or chart of accounts to support the expansion. This requires your financial management system to support multiple dimensions, currencies, intercompany transactions, and consolidations. It also requires a strategy for supporting global governance and standardization to ensure your financial reporting is optimized.
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Globalization makes international expansion more feasible for your company by offering many benefits that outweigh any complexity you might face, such as:
Technology shapes how businesses expand into foreign markets, especially within developing and emerging ones. Technology can help finance teams with global expansion by:
Companies are finding that new technologies are not only helping accelerate their digital transformation—they’re also playing a huge part in globalization as well. New technologies dramatically affecting globalization in finance include:
RPA makes it easy to build, deploy, and manage software that mimics human interactions. This software technology can perform defined actions quicker and more consistently, making workflows more streamlined and responsive resulting in more profits, customer engagement, and productivity.
AI and machine learning, as well as cognitive agents and smart machines, have the potential to completely reshape both foreign and domestic cross-border transactions while streamlining efficiencies. Businesses have the ability to validate financial analytics in a fraction of the time, cutting overall exposure to trading risks.
In offering encoded timestamps for a range of payment types, providing a digital log of payments and transfers in near real time will be crucial in the next stage of globalization for the finance industry. It’s also the most prominent application for bitcoin currency, another financial service on the rise.
As our society becomes more digitally interconnected, IoT will simplify money transfers by providing the ease and convenience of process automation and the ability to transform basic technology into “smart” decision-making devices. Contactless payments based on IoT will enable faster payment processing and increased transparency on global payments. Plus, local and international governments will be able to easily track transactions in multiple currencies and markets.
The growth of technology in globalization helps accelerate future financial growth by enabling faster and more cost-efficient transactions.
Although the pandemic impacted globalization and shifted the market landscape, data shows positive results in trade, capital flows, and digital transactions. In fact, those that embraced globalization strategies and digitalization, including driving diversification across domestic and foreign production, showed strong resilience amidst uncertainty.
However, the future of globalization will require business leaders to continue addressing supply chain shortages, along with geopolitical tensions, dynamic global economy shifts, and cross-border investment flows. Adding global-ready financial management software to optimize operations will set you up for success by decreasing risks, simplifying complex globalization in finance challenges, and maximizing your performance across markets.
Empower your team to build a successful business with the globalization capabilities of Dynamics 365 Finance—software that helps businesses manage complex global operations, expand more efficiently, and operate more effectively around the world. This comprehensive platform includes built-in localization and regulatory support for 44 countries and regions, plus additional localization solutions provided by partners worldwide.
By managing your global operations within a platform that supports local regulation compliance, multiple currencies, new languages, electronic invoicing, and tax requirements, you’re able to monitor worldwide operations in real time to make thoughtful, data-driven decisions.
Dynamics 365 Finance helps maximize your financial visibility and drive globalization with AI-driven insights, embedded analytics, and global management capabilities.
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