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We often speak about digital transformation and what it means here at Generation CFO – but what’s really driving organisations to change?

I wanted to go through with you the main factors we believe are pushing many into initiating a digital transformation.

Here are our four drivers – the tag-team behind digital transformation – along with one extra that has reared its ugly head much more recently in comparison to the others. 

Let me hear them!

What better way to kick off an explanation than with a diagram?

drivers of digital transformation in finance

So, as I said – four big ones. Customer centricity, data, cloud and technology, agility and one newbie: the coronavirus pandemic.

Let’s go through each one and what impact they have on driving digital transformation.

Customer Centricity

To kick off, I’ll start with what customer centricity means. Al Ramich for Forbes describes it better than I could:

“Being customer-centric means anticipating a customer’s wants, needs and communication preferences. And then getting it right.”

If you can get it right, this can mean huge benefits for your organisation – however, if you get it wrong, well… as Ramich continues, “you could lose precious customers.”

This is why customer centricity drives digital transformation. Getting it right relies on you understanding customer behaviour, which is a lot easier post-digital transformation. Digitised processes can help in many ways, such as accruing, analysing and predicting data about customer needs.

Data

Data, data, data. It runs everything, and is one of the most important drivers of all in my opinion.

The insights one can glean from data have so many potential uses; it can propel every department of your organisation forward, from finance to marketing – even to human resources.

That’s why heightening your intake and understanding of data through digital transformation is such an important step to staying on the cutting edge of business.

Cloud and Technology

This is a pretty broad title, so let’s hone in a bit on what we mean by breaking it into two.

Let’s start with cloud, or cloud computing, a fundamental asset for most modern organisations. Once again, I’ll defer to an expert to explain. Take it away, Microsoft:

“Simply put, cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.”

As you’ve just read, cloud computing can offer real, invaluable benefits to a business. These benefits require a level of digitalisation, and that is why cloud computing drives it forth.

If you want to use cloud computing, you need to start your digital transformation.

Now, let’s look at technology. Seemingly a vague term, but in this context the vaguity is key. 

There are so many new technologies being released every single day. To narrow down the term would lessen the gravity of just how important technology is. 

Not only does technology facilitate the transformation, but by transforming, a business will have access to a multitude of technologies that could optimise their processes exponentially. 

Agility

‘Agility’ as a work style may be completely alien for some. For others, they know it all too well. 

It’s easy to be confused here, as we’re not talking about gymnastics; the Cambridge English Dictionary has a good definition to clarify your understanding:

AGILITY

Ways of planning and doing work in which it is understood that making changes as they are needed is an important part of the job:

  • Business agility means a company is always in a position to take account of market changes.
  • Constant change is the new dynamic of the global economy, and makes agility even more necessary than ever.

So, VERY simply put, agile working means being responsive to change. With the pandemic meaning myriad things from office hours to large projects can change at the drop of a hat, agility has become a necessity in the last few years.

You may be asking “what has this got to do with driving digital transformation?”

Well, agile working is more effective, perhaps nowadays only effective, when combined with digitalised processes and communications. 

Therefore, those who move to agile working are moving towards digital transformation.

Pandemic 

Aren’t we all just sick of seeing that word? 

With more and more people working in hybrid style or exclusively remotely as a result of the coronavirus pandemic, digitalisation has increased to facilitate communication and collaboration. 

As you will have seen in my explanation of agility, the pandemic not only drives digital transformation, but it drives the other drivers too.

The pandemic is an unignorable addition to this list. It’s also the best one to end on; it isn’t over yet, so its impact on digital transformation is still yet to be fully seen. 

Who knows – maybe it will become the single biggest driver overall?

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This article was created using insights gleaned out of international roundtable discussions. These were held as part of our joint research report with the Association of Chartered Certified Accountants (ACCA) and Chartered Accountants Australia and New Zealand (Chartered Accountants ANZ), Transformational Journeys: Finance and the Agile Organisation.

Access the full research report for insights, including discussions on agile working, value cases and more.