Given the rapid pace of change in today’s business landscape, it’s not surprising that digitising finance is high on the agenda of CEOs and CFOs. According to Gartner, when looking at the digital future of finance, they found that 70% of finance leaders are accelerating their digitisation initiatives as they strive to keep up with trends in automation (to aid decision-making and boost processes).
The challenges of implementing new technology in finance are well documented. But choosing the right path to digitisation for your company isn’t easy.
Digitisation is just around the corner, whether CEOs like it or not. Modern society is producing and consuming data voraciously, and it now underpins everything from good customer service to machine learning and robotic process automation.
Statista found that the worldwide data created, consumed, and stored stands at about 79 zettabytes today, with that figure expected to double by 2025. Back in 2010 this figure stood at just two zettabytes. Rather than seeing digitisation as a problem to be dealt with, CEOs should instead prepare to take advantage of the endless opportunities that it represents.
However, to benefit, CEOs need to consider what their business stands to gain as a unique entity. They’ll need to make some important decisions, such as how the storage of data might impact their current compliance obligations, how access to new functions and dashboards is regulated, and what role data-driven modelling might play in their boardroom discussions and future decision-making.
The challenges of implementing new technology for finance departments
The first thing to note is that the challenges facing finance departments and the solutions we’re about to cover in this piece are less about replacing staff, but rather supplementing what they do and making their roles easier. Reassuring staff is often the first hurdle CEOs need to overcome when they begin to introduce automation and other data-driven initiatives into the finance function of their organisation. Beyond that lie the numerous challenges that are inherent to the implementation of new technology.
According to a joint study by Deloitte and the Institute of Management Accountants called Mirage to Reality: Bringing Finance into Focus in a Digital World, finance departments regularly experience difficulty adopting even basic technology, primarily because they’re already steeped in manual processes and legacy systems that are difficult to shake. This is where a ‘change management’ process becomes crucial, and it’s the cornerstone of any new technological innovation.
The benefits of implementing new technology for finance departments
Through digitisation, finance departments take on a completely new guise within the majority of businesses. Instead of being confined to a back-office function, finance becomes an integrated part of day-to-day business operations, allowing for faster payment processing, the rapid exchange of documents, predictive modelling and forecasting, ERP integrations and more.
In other words, the CFOs within your organisation go from being a support function to one of your primary value creators. Some of the benefits of implementing new technology for finance departments include:
Increased efficiency through automation
A recent report by McKinsey revealed that CFOs must get in front of digital finance or get left behind, citing efficiency, insight and value as the foremost competitive benefits. More than 40% of financial functions, including cash disbursement, revenue management and general accounting and operations can be automated, with a further 17% at least partly automated, reducing human error and giving your team more time and availability for other tasks and business functions.
Agile decision making
Slow or reactive decision-making is usually due to poor data or lack of reporting. By digitising your finance department, your business will have the opportunity to establish standardized reporting mechanisms that make auditing, decision-making and forecasting much quicker, allowing your business to be more agile and adaptable in a rapidly changing economic landscape.
Uncover hidden value and potential
Advanced analytics can help your business to uncover hidden value and growth opportunities that might otherwise go unnoticed, such as the ability to automate data reconciliation to a single truth, or combine information from multiple data sources to generate user-friendly dashboards and graphics that be presented at board meetings to demonstrate untapped potential.
How to implement new technology in an organisation
With so many digitisation technologies emerging it can be difficult to know where to start. As CFO or CEO, you are responsible for ensuring the
technology you choose is fit for purpose and correctly implemented. You also need to be sure that whatever new technology you employ is interoperable with your existing legacy systems, or if those systems are replaced - that valuable data isn’t lost in the process.
Appropriate data sources must be marked, data proficiency must be built up around the technology, and the right data needs to be connected with the right people in order for your finance function to reach its true digital potential.
Thankfully, our Cloud-based accounting software, Advanced Financials, is on hand to support your business through digitisation. Get in touch to learn more about this transformative technology.