Everything you need to know about reinventing the finance function through digital transformation

Everything you need to know about reinventing the finance function through digital transformation

Find out why digital transformation in your finance team is so important and how to do it effectively

Accountancy Age has investigated how increasing automation and technological advances like the cloud and AI are disrupting how UK businesses compete and grow.

Through a webinar, we invited expert guests Peter Simons, associate director of finance transformation research at the Association of International Certified Professional Accountants, Thomas Sutter, finance director and controller at Oracle Netsuite, and Paul Underwood, partner at top accountancy firm, Mazars. The webinar was chaired by former Accountancy Age managing editor, Emma Smith.

You can still listen to the webinar on demand here.

So what did we learn by delving into this topic area?

Digital transformation is necessary

What does digital transformation look like in 2019? Right now, it’s all about the new digital technologies that businesses are adopting to improve productivity and quality in their work, such as AI and machine learning. These new technologies are changing business, meaning the finance function in turn needs to change.

Underwood said digital transformation can be broken down into two areas. The quantifiable element is about improving processes and reducing risk, and the more non-quantifiable element is the disruptive technology areas which are more focused on providing insights.

Simons added: “Finance could be completely automated one day, but the discipline of finance will be ever more important.”

For Underwood, “the role of finance is becoming a more value-add advisor.”

How to deliver a successful transformation

Underwood described a few steps to take to achieve a successful transformation, including understanding who your customers are and what is it they need. Then it’s about realising what’s possible. It’s important not to try to change too much too quickly. It’s a long, continuous journey. Focus on doing a smaller number of things well.

The strategy behind your digital transformation should also match up to your overall business strategy. Think: what is the role of finance in delivering this strategy in a profitable way?

Also, make sure you are engaged with staff, customers, and stakeholders right from the offset. It’s not just telling them how to use new software, it’s engaging them in the whole journey so they can help identify the opportunities as well.

How organisations can make sure they get the most out of technology

According to Sutter, people are key, “it has to start from the top down.

“You need the Board, the CEO, then you need the management and the department heads. The whole company has to follow suit.”

You also need to go through processes – your company, business, and industry – that you want to transform by using the latest technology. Only then do you look for the right technology. You need to be future-focused when choosing your technology.

Communication is key

How should the messaging around digital transformation be delivered to teams?

Digital transformation creates opportunities for staff, like mastering new technology and taking on new challenges.

You can sell the benefits to your business but ultimately most people also want to know what it means for them personally, what it means for their job, and how they will be helped through the journey. You have to remember that process automation will inevitably lead to some people leaving the company. Understanding it from the end-user perspective is important.

Run workshops, get staff involved, talk through the new process, hold networking events. Identify within the organisation who the earlier adopters will be and eventually the rest will follow.

What detail needs considering?

Employers need to get their people on side with digital transformation. When you’ve automated some of the processes you won’t need quite so many people, though people can be redeployed so winning them over where you can is advisable.

Underwood commented: “Board and senior management-level staff need to understand the vision and where the business is headed.

“You also need the breadth of experience in technology and process. I think project management in a light touch approach is also essential. You need a project plan, how you’re going to get there, and action and risks plans too.

“Training and testing is key too. How does your business work? What will be the impact on your business?”

What challenges might you face?

When it comes to cost, think about money, reputation, security, and time. You cannot just base it on ROI.

Underwood said: “It’s much more about delivering value. Get ownership at strategic Board level.”

Another challenge might be that people may not understand the cloud, there is a misconception about the risks around this.

Underwood added: “The biggest cost is not doing it. That’s a different way of looking at cost.”

Setter said: “The cost should be on more of a ‘pay-as-you-go basis'”

People are of course another potential challenge and solving it is all about getting people’s buy-in.

How can businesses measure their success?

Simons: “This is pretty hard because some benefits are intangible. You need to think about each step.

“Bringing in new technology won’t be the hard part because it’s all in the cloud. As we’ve said the challenge is getting people’s buy-in, getting them to use the new technology properly, and then bring in the benefits that were expected.”

Simons added that there needs to be a clear expectation at the outset and an outline of what benefits will come from it. Even if they are not tangible, there has to be a commercial plus. It all comes down to the financials in the end.”

How do Boards build their business case for digital transformation? 

Simons said: “Businesses fail because they don’t address a risk they’ve known about for a long time. So it’s about having a wider view. We’ve known about new technologies for a while. The business case shouldn’t be short-term it should be about survival.”

Underwood: “It’s getting the right balance between people, process, and technology. Technology is the enabler for what the people and process will be, it’s the catalyst for the change.”

Underwood also said that bringing knowledge in before undergoing the change is really key.

What are the longer term challenges?

Sutter said: “It’s the continuous transformation.

“If you don’t keep on innovating, the technology will improve and your competitors will pass you or if your business grows but you don’t innovate you end up not using your current system for the right purpose.

“Every few months you should be sitting down in a team and thinking about how to innovate.”

Practical steps to take in a digital transformation

  1. Take the top down approach – the top of the company must be excited about it and want to do it.
  2. Build the burning platform – you need the sense of urgency and to stay ahead of the wave of technology.
  3. Make a strategic plan.
  4. Think about systems needed.
  5. Decide if you need to bring in new skills.
  6. Project and change management – but approach different projects flexibly.


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