With productivity gains lagging for organizations worldwide, CXOs of companies of all sizes around the globe are looking to digital transformation as an approach to efficiency and achieve a competitive edge that will lead to lower costs, growing revenues and greater profitability.
According to a recent study from the Hackett Group, however, while the vast majority of companies agree that digital transformation can fundamentally change the way they do business and help achieve their objectives, few organizations are poised to do so.
This was particularly true when it came to their finance organizations, where digital transformation can have broader, deeper and more impactful effects on the while organization.
Here is what the study had to say about the key challenges companies face and the areas they need to focus on to position themselves for the digital future.
Strategy, People and Processes
The Hackett Group Study, “The CFO Agenda: Finance’s Top 4 Strategic Priorities in 2017,” which surveyed global executives from more than 180 large companies, found that companies definitely regarded digital transformation as key to their future growth—but few had defined a strategy that would align their objectives with their people and processes.
The study found that 90% of all finance organizations believed that digital transformation would fundamentally change the way they delivered services. However, only 44% of finance organizations indicated that they were guided by a formal digital strategy.
At the same time, only 35% indicated that they had the right people and processes in place to support their vision. Compounding that problem, only 15% planned to revise job profiles or competency models in the coming year to address their digital business transformation needs.
Four Areas of Focus
Needless to say, companies that believe in digital transformation as being key to their financial future can’t continue on their current course. According to the Hackett Group, there are four areas of focus that can help finance organizations and companies as a whole to jump start their digital transformation initiatives.
The Hackett Group study found that finance functions are focused on a broad range of business risks and opportunities, with cyber-security, intensified competition, disruptive innovation and access to critical talent leading the pack.
Finance has the opportunity to truly transform their businesses by helping to design and implement effective systems to provide information and analysis to better inform decisions related to these key areas of risk and opportunity. With the right technology on board, finance can help deliver more timely data and analysis to management to formulate strategy.
According to Hackett Group survey respondents, revenue growth projections sit at 4.1%, while headcount is expected to fall by 4.4% and budgets will likely be reduced by 3.8%. Achieving growth, therefore, while require a significant increase in productivity.
In response, Hackett Group study participants indicated that they are prioritizing the development and implementation of finance KPIs and reporting strategies to fuel data-driven decision-making. Digital transformation can support this effort by helping to transform both structured (read: ERP) and unstructured data (read: documents and other enterprise content) into knowledge to provide better visibility to business performance.
Finance executives strongly believe digital transformation will have a big impact on the function. They are starting their journey by putting their data house in order, laying the groundwork for future digital initiatives. Concurrently, they are moving to adopt advanced analytics and other new tools and technologies to capitalize on that data.
The same emphasis is also evident in a comparison of the types of technologies companies have now and those they are planning to adopt within the next two to three years.
According to the Hackett Group survey, only 35% of respondents believed they had the right talent to execute a digital transformation strategy. To bridge the gap between vision and execution, finance leaders need to adopt a strategic approach to workforce planning and talent development.
The finance professionals of tomorrow need to significantly improve their technological expertise. As more and more data becomes available, finance leaders must become skilled storytellers, presenting insights and information in engaging and visual ways.
Taking the Next Steps
Artsyl Technologies works hand in hand with our ERP, ECM and business automation partners to help companies identify specific business processes that are great candidates for digital transformation. Often, by taking on well-defined processes where manual processes and a lack of process visibility are key bottlenecks (like account payable invoice processing or sales order automation), companies can achieve fast ROI and empower their employees to gain a fundamental understanding of how to plan, execute and support a digital transformation initiative in a way that can scale from a single department or process.
To learn more, contact your Artsyl Technologies account representative.