Digitalising finance: a major challenge for organisations of all kinds.
According to Gartner, the term “digital” in the early 2000s only ranked among the Top 5 priorities for CEOs in 2.1% of the companies surveyed, whereas today it is a priority for one out of every five companies. The proportion of companies that have a digital strategy rose from 62% in 2018 to 82% in 2019, confirms Gartner, which considers that 90% of companies today have already been confronted with different types of disruption in their business models.
Corporate entities are now all concerned by digitalisation and are faced with the need to digitalise their accounting to simultaneously adapt manual processes and services and accomplish other goals, namely: achieving greater agility, smoother flow, and simplicity; improving relations with customers, which is an issue that affects both sales and margins; leveraging electronic platforms to increase performance and productivity; and rethinking human resource management to increase people's digital skills.
According to a study on finance departments in 2020 by the human resource consulting firm Robert Half, 80% of CFOs can already see the difficulties they will have recruiting and retaining skilled teams of co-workers, particularly people with digital profiles.
This performance requirement in a complex and uncertain environment is a recurring factor for finance departments: according to a recent survey by PricewaterhouseCoopers (PwC) on 2020 priorities for financial directors, it has been a leading consideration since 2018 and will remain so for the next three years. According to the study, the goal is to “make relevant, high-quality, and meaningful data available to better anticipate and facilitate decision-making. Companies need open systems that can collect non-financial and other types of data.”
Digital transformation and its assortment of new technologies therefore represents a major opportunity for financial decision-makers. That includes digitalisation as a priority, but also Big Data, analytics, Robotic Process Automation (RPA), not to mention artificial intelligence and virtual assistants. All these technologies have a transversal and universal goal, which is to valorize data.
According to a study on finance departments in 2020 by the human resource consulting firm Robert Half, 80% of CFOs can already see the difficulties they will have recruiting and retaining skilled teams of co-workers, particularly people with digital profiles.
If companies were to valorize data, the status of financial professionals would thus also be valorized. With digital transformation, finance professionals change their positioning within their organisations. They are seen less as occupying back-office roles and more as people who support business efforts. Being successful with this evolution is critical in a world where data volumes are increasing at a dizzying rate.
International Data Corporation (IDC) estimated that the size of the global “datasphere” (which comprises all the data that is created, collected, or duplicated around the world), represented about 33 zettabytes in 2018, compared to 10 zettabytes in 2012. The number is expected to reach 175 zettabytes by 2025.
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Financial data is no exception to this trend of information overproduction, notably because regulatory obligations require more information to be stored for longer periods of time, and because business intelligence and visualization tools incite organisations to increase their use of dashboards. Also, digital transformation speeds up electronic processing and increases the volume of digital data. Data remains at the heart of the process, such as invoices in electronic solutions, structured data in predictive models, labels for classifying accounting entries, product references in ERP systems, and more.
According to PwC, people in the most efficient finance departments are already spending 75% of their time analyzing data. A report by Dresner Advisory Services published in late 2019, shows that 40% of finance departments intend to acquire Big Data solutions in 2020, notably as a way to benefit from information in real-time, align their work with management needs, and make data more reliable.
In addition to the four roles mentioned earlier for CFOs, there are also five other core principles. CFOs drive performance, innovate, stay connected and mobile, communicate, and create value. A range of technologies applies to each of these missions. Steering process and organisational performance leverages an increasing number of Cloud applications and, of course, digitalisation technologies such as AI and blockchain.
On the innovation side, artificial intelligence is already making headway into the finance function. Value creation is derived from a smart arrangement of technologies that feed the entire organisation. 2019 was already an intense year for finance departments and Chief Financial Officers: according to the Protiviti consulting firm, 58% of finance departments increased their budgets for acquiring data visualization solutions; a similar proportion expanded its use of Cloud-based financial applications; 56% invested more in analytical solutions; and half of all CFOs invested in robotic process automation (RPA). These investments for the future are expected to show their benefits starting in 2020.
Digital transformation has become an inescapable reality. But as American investor Warren Buffet once said, “only when the tide goes out do you discover who’s been swimming naked.”
2020 forced digital transformation upon almost every single business unit and function specifically finance departments that have lagged behind on digital tools and initiatives for quite some time, tending to focus more generally on marketing and the client experience.
But in order to make their digital transformation a success, companies have to take into account the human factor and consider the crucial role of change management in their digital transformation. Companies that experience the greatest difficulties carrying out their digital transformation successfully are specifically those that consider digital transformation above all to be a technology project that “people will follow” (McKinsey has observed that 70% of companies fail to reach their objectives; Forrester notes 60%) (2). It would obviously be an error in judgment to count solely on automatic adoption, as we can consider that the success of a digital transformation process is only 10% based on technology tools, but 40% based on organisational adaptation and 50% on effective change management. In other words, professional expertise and soft skills (non-technical skills related to how people work) weigh heavily in the functional richness of a given technology solution, however high-performance the solution may be.
Robots are everywhere but they don’t have to replace humans; they can actually create jobs by making business more efficient. Putting into place a digital transformation will supercharge financial services, whether it be in banking or the accounts payable department of a small business. Read more about how it solutions for financial services can help speed up operations, create cost savings, drive profit, and make the work environment altogether more appealing.
Robots can be found everywhere, from the visible bots zipping around warehouse, servers dodging through restaurants to the invisible, software-based bots working away in the background. But not all bots are visible.
When we look into how businesses are considering the benefits of digitalisation – specifically the benefits of robotic process automation in finance – it’s clear that an increasing number of departments are becoming more open-minded about letting these invisible software-based robots enter their offices.
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