With the world facing uncertain circumstances, firms and departments are forced to become agile like never before, and respond to changes quicker. The demand for financial agility is forcing finance teams to stay on top of financial health and meet customer demands. The changes in the world has driven requirements for technology to change core principles of a business. 93% of finance leaders believe that digital transformation is critical for the future success of companies. Digital transformation is becoming a necessity across all business functions. Digital transformation is about creating an environment that allows data processing to produce accurate and relevant financial data to make timely business decisions, improving day-to-day operations. The ability to leverage data to achieve efficiency, agility and flexibility contributes to a businesses long term vision. Digital transformation of finance lies in the changes of business models and business cultures, leading to efficiency. Many companies are now witnessing an evolution of modern finance teams, where cutting edge technology is extending to back-office operations.
Digital transformation is essential for an organisation to be future proofed as a whole. AI empowers finance teams to be proactive, eliminate fraud, reduce spend and increase their efficiency. AI has the power to review data intelligently, streamlining accounting processes, allowing teams to focus on high risk matters. AI is essential when dealing with an evolving workforce, taking car of auditing processes allowing staff to only intervene when necessary. Implementing AI into expense management processes eliminates the need for managers to approve expenses manually, before sending them onto the finance team. With AI, all expenses and invoices are assessed and behavioural patterns are recognised, providing clear insights into spending habits across an organisation. Combined with ML, incidents of cash leakages are automatically identified. Anomalies and weaknesses, such as duplicate transactions, are highlighted and easily resolved by finance teams. With AI, teams are able to flag report, increase their auditing to 100%, reducing error, risk and increasing time.
Finance leaders need to be able to leverage themselves in order to transform their team and the organisation as a whole. Thus far, finance teams have been restricted by the rigid nature of legacy systems that dictate their day-to-day processes. In order to achieve organisational agility through digital transformation, teams must move away from multiple operational systems, and move towards a single system for transactional operations and analysis. Implementing a single platform like the cloud allows for agile planning, financial consolidation, reporting and analysis. Finance teams will have the ability to access accounts and key information from anywhere, at any time, taking decisions in real time based on real-time insights. Operational tasks are also streamlined, allowing financial teams to focus on strategic thinking, thus advising departments with real time information. A Canadian utility organisation, ENMAX, were able to increase the strategic work they delivered by 30% through moving to the cloud. In doing do, a single real time source of accurate data is achieved, and businesses are able to navigate rapid changes.
The digital transformation of finance teams frees up capital needed to fuel and organisations innovation. A way in which this can be achieved is through introducing automation, otherwise known as RPA of financial processes. RPA allows for a fast performance of basic, repetitive, mundane tasks, such as reporting. Many finance teams lack basic digital skillsets, and 12% of finance professionals use their time on only one value adding services, making it difficult to adapt to uncertainty and new business requests. RPA improves departmental efficiency as tasks like invoice processing, reporting and statement reconciliation is automated. Better automation impacts the speed and accuracy of compliance processes. Risks management is a top priority for finance functions, with outdated, manual systems increasing exposure to compliance risks and internal fraud. Through implementing automating digital compliance strategies and auditing techniques, compliance risks are minimised. Through implementing automated digital processes, workforces are able to improve their skillsets, focus on value added tasks and seize opportunities essentials for the support of a business.
Digital transformation has revolutionized access to information, allowing for automatic B2B processes and more time to make strategic decisions. 58% of finance leaders say they need to build their understanding of digital technology and sophisticated data analysis. Through digital transformation, finance becomes the engine room for analytics, providing evidence for strategic decisions. Real time data on financial transactions allows for better policies and controls to be placed. 57% of CFOs say that they delivery of data and advanced analytics is critical for finance functions, allowing for saving opportunities to be flagged. Furthermore, predictive analytics allows for efficient uses for budgets, improving business strategies, supplier relations, agility, speed to market and customer experience.
The role of finance is to enable, drive and support the business to change and be successful in the long run. In order for digital transformation of finance teams to be successful, employees must be technologically literate. The understanding of how to exploit digital technologies is essential in order for real business value that supports growth to be created. Furthermore, employees and organisations must have a willingness to embrace new technologies and build on their own personal digital skillset.
