In today’s post-COVID world, digital transformation is at the top of the several boardroom agendas. With evolving customer expectations, stiff competition, everchanging legislations, and a higher need for streamlining operations, businesses need to focus on reinventing and innovating at all times to stay on top of their game.
In fact, a recent IMA study found that one-third of accounting teams spend anywhere from 51% to 75% of their time on repetitive, low-value tasks. Furthermore, 56% of surveyed accountants said they need automation just to keep up with their increasing workloads. So, digital transformation is the way forward for businesses. But, what exactly does it mean?
Digital Transformation: What is it and why is it relevant?
In a nutshell, digital transformation enables problem-solving with the help of technology, so as to provide better value to customers and help the business constantly evaluate and improve its strategies.
When a business undergoes digital transformation, it needs to integrate digital technology into its services, offerings, and operations. With centralised digital technology at the helm of businesses, silos can be eliminated to make way for a more seamless experience. However, it’s important to note that digital technology is everchanging and constantly evolving, so there is no singular, one-size-fits-all solution.
Digital transformation and adoption require businesses to stay ahead of the curve and constantly adapt to new solutions. CFOs and finance leaders will require a considerable amount of planning and foresight to make the shift to digital. However, it’s possible to start the digital transformation journey with a clear agenda and strategy in place.
Digital transformation cannot happen overnight, but with the right steps it’s possible to move forward in your digital journey.
Here are 5 steps that finance leaders can take to make digital transformation a reality for their respective businesses.
1) Prioritise scalability: In order to run an efficient and successful business, ensure your shared services centre (SSC) is maintained well. With the help of a good SSC, your business can remain agile, make its presence known in new markets, expand into new geographies, and offer a larger service portfolio. More scalability leads to fewer external dependencies, more cost savings, and better value addition. As an example, a single source of truth for an SSC allows better integration for a function like order-to-cash, in turn leading to higher operational efficiency, better communication, higher visibility using analytics, and more transparency with KPI tracking.
2) Conduct thoroughbenchmarking and assessment: This is a crucial step in the digital transformation journey as it will enable your business to identify gaps and come up with process improvements. Benchmark your processes against your industry peers and evaluate whether there is scope for improvement. Can your business incorporate digital technologies like automation and robotics to existing finance functions?
A detailed assessment of your finance functions can help you identify maturity gaps and help you decide on a starting point for your digital journey. Next, using these findings, you can implement full or partial digital advancements. By using analytics, you can track various metrics to gauge whether your business is on the right path.
3) Evaluate your options well: It’s not enough to just leverage technology, you also need to integrate it with your existing systems. While seeking vendors and digital solutions for your business, make a detailed list of your requirements and expectations. Match the offerings from either vendors or software tools to this list and narrow down on your final options.
Will this solution add value to your business? Is there enough ROI on making the shift to automation? Which processes or functions stand to gain the most from this move? How quickly can this solution be implemented? These are a few questions that you must answer before making a final decision.
4) Replace manual processes and ensure continued improvements: For a long time, manual processing was a constant in various finance functions. Today, going paperless is the norm as it’s faster, more cost efficient, and reduces errors. Furthermore, it’s vital that you constantly make process improvements to ensure that your business is functioning efficiently. Remember to prioritise trainings for employees to ensure they are aware of how to navigate new digital technologies and can course correct if needed. Thus, a collaborative approach to technology implementation and constant process improvements will help improve business efficiency and increase ROI.
5)Keep a track of your progress: Once the technology is implemented, processes are set, and metrics and insights are ascertained, the next step is to track progress and make necessary changes frequently. It’s also crucial that you set goals that you wish to attain over a certain period of time and decide on the metrics that can help your track your progress. Some metrics you should consider tracking include overall cycle time, value-add time vs. non-value-add time, and process cycle efficiency, among others. Through trial and error, you can finalise three to five key metrics to track, which can then be used to improve, update, and replace processes and technologies as required. If you’re using a software solution, constantly be in touch with your software provider to be on top of the latest features, enhancements and releases.
At the end of the day, technology is a long-term investment. It’s important to utilise your staff, technology, and processes to their fullest in order attain a great level of effectiveness and efficiency. With the help of digital technology adoption, you can drive your business and its finances to greater heights.