Few topics are more intriguing—or disquieting—to today’s boardrooms and top executives than digital transformation.
The concept is so intriguing because it promises unprecedented levels of visibility and control by digitizing everything from operations to customer services. It’s disquieting because it demands seemingly unlimited investment, without guaranteeing immediate returns.
Amid all the uncertainty surrounding digital transformation, one fact is clear: Accounting and Finance is the most appropriate group to lead the way forward for the business as a whole.
Accounting and finance teams deal with detailed specifics and measurable results, both crucially important to a pursuit such as digital transformation—especially since so little is tangible in terms of costs and outcomes.
As McKinsey & Company points out in a recent article, “Today’s CEOs and boards say they want CFOs and the finance function to provide real-time, data-enabled decision support.
But of course, that is the ideal scenario. Finance—and the rest of the company—is operating in the real world of profit, loss, and global competition.
The question for the CFO is how to make meaningful progress in finance transformation. Once that question is answered, Accounting and Finance can look outward to help the rest of the organization.
Finance, Heal Thyself
Every accountant, auditor, controller, and CFO knows that the key to finance transformation lies in process automation.
As PWC said in a recent article, “Today, entire departments, including more than a few financial planning and analysis (FP&A) groups, are made up of spreadsheet jockeys... We’ve all done it. But we have to get over it.”
The question is no longer if, but how, to automate. Accounting professionals wrestle with this every day, and the daily influx of new solutions populating the automation landscape isn’t helping.
Learning what functions to look for can be daunting, but the fundamentals of best-practice automation are straightforward. Applying these fundamentals is a positive step forward, and more CFOs are taking that step every day.
End-To-End Process Automation
These and other processes share a unified platform to gain consistent, end-to-end views of data for root cause analysis and other investigative techniques.
Robust Reporting & Analytics Tools
To maximize process efficiency, reporting tools should be integrated with processes and able to handle the massive amounts of data that express the details of days, weeks, and years of activity.
Million-row reports are possible today, so there’s more danger than ever in shipping data to a separate reporting application, and back again to analyze the results.
At its best, finance reporting fosters creativity by constructing a plane of visibility across accounting processes, letting analysts drill down to real-time answers to questions that previous generations may not have even known to ask.
Ability to Scale Across the Organization
Even without digital transformation, organizations can grow and change very quickly. New products, divisions, and acquisitions create new data sources for financial overview.
It’s imperative that Accounting is able to extend to new ERPs and other financial systems, or adapt to new foreign acquisitions as smoothly and quickly as possible.
Bringing Insight to the Data-Driven Enterprise
Just as business is becoming more data-driven than ever before, CFOs are realizing that Finance is in a unique position to help facilitate their organizations’ digital transformation efforts. This includes bringing process automation knowledge—as well as vital data—to groups outside of Finance.
Opportunities abound. In Operations, for instance, CFOs are partnering with IT to evaluate the costs of new technologies against performance and risk metrics. This is critically important today because of the new technology investments demanded by digital transformation.
Equally important, CFOs are increasingly bringing data-driven risk management awareness to strategic planning at the CEO and board levels to inform decisions ranging from entering new markets to planning new facilities. More than ever, top executives realize the value of risk awareness in maintaining trust among customers, shareholders, and other ecosystem partners.
But the greatest opportunities for future finance partnerships may lie in marketing-related initiatives with enterprise business units.
As FSN Publishing CEO Gary Simon says, “The current vogue for customer-centricity and the demands of social media marketing have fostered a more data-driven marketing approach in which vast amounts of information are gathered about every social and customer interaction, in order to drive a more customer-centric approach.”
One example of data-driven marketing is in consumer goods, according to a recent article by McKinsey: “Rather than wait for reports, sales staff can use visual dashboards... to get the data they need when they need it—by region, business unit, function, or other parameters as required. Sales managers pull the data from a central repository that is continually refreshed, so they can get an accurate read on how demand is changing.”
Tip of the Iceberg
This is just a fragment of the bigger picture. As analytics become more advanced, Accounting, Finance, and the CFO will find a variety of new ways to help the enterprise’s business functions.
“Indeed,” says McKinsey, “Every CFO should explicitly define the leadership role he or she wants to play in translating burning business questions into use cases for advanced analytics: whether to optimize pricing, identify customer churn, prevent fraud, manage talent, or explore a host of other applications.”
Read our latest issue of BlackLine Quarterly for more stories like this, and to learn how to make meaningful progress in your organization’s finance transformation.