How can finance seize digital opportunities?
Credit to Author: ANTON NG | Date: Tue, 05 Mar 2019 16:16:30 +0000
Whether it is artificial intelligence, big data, analytics, or cloud technology, technological advances present an opportunity for finance or accounting teams. However, what is the best way to make the most of potential gains: an enterprise-wide solution or a more targeted approach?
Many will attest that investing in technology can bring a competitive advantage, as well as connectivity. However, many companies are hesitant about digital transformation due to lack of knowledge and willingness to invest. This despite the fact that we live in a world shaped by cloud and wireless technologies.
We are on the cusp of a new wave of technology that affects not only customers, but the back office as well. Robotic process automation and machine learning are enabling automation and opportunities to scale up, which were not there before.
Furthermore, analytics and artificial intelligence are creating situations wherein the finance platform can be built on top of the company’s core systems, without having to change or update them. This gives finance and accounting teams the freedom to improve without moving or modifying essential systems usually very expensive to change.
Is the Finance department lagging behind?
Finance and accounting teams especially face two main challenges. First, they are often not as aggressive as other functions in seeking investment in the latest systems and technologies. Unfortunately, companies tend to focus on operational and customer-facing technology. The return on investment in finance systems can be extremely quick, but it is rarely articulated.
Second, finance teams lack the capacity to step up and adapt. Such departments often lack the time to focus on special projects, like digital transformation, when ‘business as usual’ comes first. Finance may not have the time for major transformations, but teaching continuous improvement across the organization can make a huge impact.
Don’t be tech-savvy for the sake of it
For mid-sized businesses considering spending on technology, check first if you can maximize current systems. Adding technology is not a magic bullet. Companies can implement new solutions, but if the adoption is poor, because users neither are engaged nor aware of the system’s benefits, they just die out. This leads to resistance to embracing similar projects in the future.
One approach does not fit all
The approach that companies should take depends on the type of organization and its needs. For an enterprise-wide solution, the challenge is the lack of a clear business case for the change.
Management has difficulties with providing robust analysis of business benefits and return on investment. In some cases, however, an enterprise-wide digital transformation is exactly what the organization needs.
A mid-sized business where connectivity between warehouse management, e-commerce, and finance needs an overhaul because investing in technology will enable a company-wide transformation. Alternatively, a specific business case that delivers clear return on investment is sometimes a better and more affordable option.
Plan, plan, plan
Digital transformation can go wrong when there is no proper business case, which explains in detail the financial benefits, work improvements, and project delivery structure.
Sadly, most finance functions sit on massive amounts of interesting data, but they have no time to analyze them, because they are manually downloading data out of the finance system, manipulating them in Excel, reviewing printouts, and then reloading all the information into the finance system through accounting journals.
The significant costs that come with digital opportunities should also not be a roadblock. Instead of looking only at the cost aspect, factor in the return on investment and what can really be achieved.
Keep calm, carry on
There is no harm in embracing technological advances. When considering any kind of digital project, ignore the scars of the past and understand that the rules have changed: technology is very much different these days and it can be done much more quickly and affordably.
CEOs today prioritize innovation, proactive performance management, and government-compliant digital processes. The biggest challenge for the latter is finding sustainable solutions fit for your organization by adding value at the right cost.
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