Has Digital Transformation Become A 4-Letter Word?

According to Forbes, 84% of digital transformation projects fail, immediately impacting the business.

This may explain why, at many Finance Departments, safety and progress are two concepts that are consistently at odds with one another. Having a reputation for being conservative and slow to adapt, these departments prize risk management above being cutting-edge when money and reputation are at stake.

However, change doesn’t have to be a frightening thing. Technological disruptions of the past include Excel and company-wide ERP systems, which now play such an integral role in everyday aspects of finance that it’s a struggle to remember life before them.

The problem is that it’s not just the future that is digital, the present is as well. And without Digital Transformation (DX), companies lose their competitive advantage. Finance Departments must learn how to walk the line between being cautious and being left behind.

For the sake of progress, Finance Departments are realizing that change can be good and DX is imperative in today’s business market. As George Bernard Shaw once said, “Progress is impossible without change, and those who cannot change their minds cannot change anything.”

Finance Departments are realizing that the ability to change their mindset may define their ability to help their company survive in the long term. As attitudes shift, digital advancements are finally arriving.

And this shift is not happening a moment too soon. Technology is having such a forceful impact on companies that Finance Departments must adopt these advancements or they’ll cause their entire company to fall behind.

Digital Transformation isn’t a new concept and many people have one way of thinking about what it is and what it can achieve. In other words, the problem with Digital Transformation is that most businesses have a very limited understanding of how digital technology can be applied to their company.

Perhaps part of the reason this understanding is so limited is because Digital Transformation is a concept that can be hard to define: it is using new technologies to create efficiencies and new business processes that deliver a competitive advantage.

Digital Transformations don’t need to be large. In fact, small changes can have big impact.

As the definition reveals, many things can qualify as a transformation. Projects that companies have already done or are in the process of doing create meaningful, digital-based experiences.

Companies often just fail to realize that those are transformations. For example, replacing paper and binders in Finance Departments may seem small and insignificant but can have huge ramifications for business efficiencies and is an important step toward going digital.

Technology is changing the way things are done. Companies are facing more information and opportunities than they’ve ever seen before. The companies that can best utilize these new technologies, both in obvious and in creative ways, will have the largest competitive advantage.

According to Gartner, Digital Transformations will unlock a lot of untapped potential. With technology, massive volumes of data and transactions are not just processed but understood, leading to predictive analytics.

Robotic process automation (RPA) and artificial intelligence (AI) allow enterprises to automate complex activities that previously only humans could do. These transformations reveal back-office opportunities as operations can be reimagined to better support business.

In the coming years, Darwinism in business will prove to be at its finest, and how companies adopt and utilize digital technology has the power to make or break them.

Finance Departments need to realize that progress requires change, digital transformations can be achieved one small step at a time, and discovering untapped potential is the secret to a thriving Finance Department.