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Part 1: Lead or be led
Written to inspire new and different thinking amongst finance leaders, this is the first in a three-part series addressing how finance leaders can accelerate their digital agenda. Additional topics cover “Say Goodbye to the finance function,” and “Practice Applied Intelligence.”
Digital transformation is touted as the revolution that finally helps the finance function do things that weren’t possible before.
The truth is … these concepts have been talked about for years. So, are these outcomes now being achieved? Is digital technology really making the finance professional any better off? While innovative concepts and ideas are often discussed amongst leaders, the impact on finance remains surprisingly low.
Sixty-nine percent of CFOs say that while tactical changes are underway, they do not have a comprehensive digital strategy guiding short and mid-term objectives.1 And, 75 percent believe they are not well positioned to meet the needs of tomorrow’s digital business, citing the need for significant change in how finance operates.2 One could argue finance functions have actually become worse off for two main reasons:
The biggest gains from digital capabilities have come from areas of the business where technology is used extensively. Consider how customers make online purchases with a single click. Instead of having to input billing and shipping information every time an online purchase is made, users can opt to leverage internet marketplace technology that uses a predefined address and credit card number to expedite the purchasing process. For many roles in finance (e.g., accounting), faster processing of data, easier retrieval of information and the ability to redeploy talent are all outcomes when technology is used for repetitive operations.
So, the real problem is not that digital transformation doesn’t improve ways of working, but that its impact isn’t spreading far and fast enough.
In basic terms, most would agree finance is responsible for supporting eight key areas of the business. They plan, transact, account, control, comply, report, analyze and advise. However, executing some of the basics within each of these areas can consume 80 to 90 percent of a finance professional’s day.3 In fact, most CFOs agree legacy data, process, technology and skills are key impediments to their ability to adopt new ways of working. These findings are revealing when learning how Fortune 2000 companies actually run.4
The good news is the solutions to some of the most pervasive challenges facing these leaders are not as hard or as expensive as most think. With the launch of business-led technologies such as robotic process automation (RPA) and machine learning, or the emergence of new trends that include Artificial Intelligence, virtual/ augmented reality and intelligent distributed systems, the finance function can become highly digitized relatively quickly.
In fact, these types of technologies will largely digitize five of the eight basic areas of the finance function. What will remain are the plan, analyze and advise activities that, when enabled by the right operating model, create the most business value.
While technology is a key enabler to progress, finance leaders who understand people are really at the core of this change will have the greatest success. Leaders can accelerate digital transformation by:
1 Accenture Strategy Digital Finance Survey, 2016
4 Accenture interviews of C-suite leaders at Fortune 2000 companies