Finance teams are starting to catch-up to the fact that digital transformation should be a top priority. Our recent research found that the COVID-19 crisis has increased the urgency around digital finance discussions.

While we hope for a paradigm shift as a result of this desire, funding is also getting tighter as the economy contracts. Is it possible to undertake transformation on a budget?

Can we afford to invest in transformation?

This renewed focus on transformation is driven by the reliance on the CFO and finance team as businesses try to survive the crisis and plan for the recovery. It has exposed the weaknesses that exist within the typical function (planning and forecasting, for example) and the necessary improvements to meet the expectations of the business. Remote working adds to the challenge.

With cost-cutting high on the agenda for most organisations, the finance team will also come under scrutiny. We need to do more with less, be more efficient and effective.

Therefore, if we are to meet all these objectives and expectations, we would ask the simple question; can we afford not to invest in transforming the finance team?

Transformation is complex and expensive

Wrong! The popular perception is that transformation is complicated, requiring a team of consultants to implement with the expense associated with this. And horror stories of transformation failure make it seem potentially high risk.

When we look at the dictionary definition of transformation, we find: “…a complete change in the character of something, resulting in an improvement”. You can derive a simple meaning of finance transformation from this: “…a change and improvement in the performance of the Finance Team”. There is nothing complex about this, much of it is common sense and good practice.

With this definition in mind, a simplified approach to transformation can be planned, one that takes small iterative steps. There are many elements that we can initiate and implement internally – perhaps with some guidance or advice from an expert to understand the art of the possible.

Learn more about digital finance transformation in different ways

Our regular live training gives you the environment to have deeper conversations, make new finance connections and explore the opportunities the digital finance function offers. 

Making the most of technology advances

Other than consultancy costs, the main area of expense is that of a technology platform that so often acts as the enabler for the transformation.

There have been considerable technological advances in the past three-to-five years. A significant number of organisations have not made investments in finance-related systems for the same period. They are missing out on new capabilities and trends as a result.

Two technology advances in particular have changed the landscape. The first is the simplicity of integration; most solutions are now open in terms of connectivity and access to data. The second is cloud technology, which has provided scalability (in respect of users and storage) and speed of deployment.

Previously, it could take weeks or months to get a solution installed, implemented and integrated, with organisations typically investing in a handful of significant finance solutions. Where these fell short or lacked functionality, the team would often plug the gap with MS office tools, primarily Excel. This results in inefficient processes that consume valuable time and an increased risk of error.

Now, a SaaS environment can be up and ready in a few hours. Licencing models also support a ‘proof of concept’ approach as you can commit to a small number of users and a short timescale.

A modern trend is a technology stack approach, using multiple software solutions that work together. This allows the integration of niche tools to plug the aforementioned gaps in the system and supports an iterative approach to transformation.

“A good example of this in practice are accounting systems (or ERPs)”, said Kristi Jacks, Director of Operations @Mid-Market at Trintech. “They do not cover all of the tasks that are performed during a financial close, or help to control the process. We find that tasks, such as reconciliations, are often performed manually and ‘off-line’ in Excel. If you have an integrated cloud-based system that works together with your ERP, you can automate a number of tasks and deliver a seamless and more controlled process”.

Low cost, low-risk transformation

This leads us back to the original question: does finance transformation need to be costly and risky?

By taking an internally lead, iterative approach to transformation we can keep consultancy costs to a minimum. By taking a tech stack approach, we can leverage on our current investment in technology, such as ERPs, and plug the capability gaps with niche tools. This allows us to embrace technology advances and delivers change and improvements to several processes without a high level of investment. To use a modern phrase, we are ‘up-cycling’ our current technology and delivering iterative transformation, without much risk to the function.