Full article with thanks to: forbes.com/sites/forbesfinancecouncil/2023/06/15/digital-transformation-in-finance-how-companies-can-boost-resiliency/?sh=3a68a8f14dd8
Heading into 2023, many economists predicted that this would be yet another challenging year. Q1 began with the continuation of management teams trimming operating costs in the form of mass layoffs across business industries in attempts to offset an inflationary and high-interest-rate environment and came to a close with industrywide worries about the health of the global banking system following the collapses of Silicon Valley Bank and Credit Suisse.
Now, as many economists continue to question whether a recession is headed our way—and if so, exactly how impactful it will be—companies that had resorted to layoffs in an effort to reduce overhead costs back in Q1 of this year are facing a big dilemma. Once you have reduced head count, what’s next? What else can be done to streamline costs without impeding your company’s ability to grow?
Regardless of the vertical your management teams are in, one key characteristic is required to weather the storm: the ability to laser-focus on key initiatives and flawlessly execute. In a persistently volatile economic period, the C-suite needs to think about addressing the problem with permanent, lasting solutions that manage costs while continuing to drive business growth.
Even as automation adoption steadily grows in the Office of Finance, more needs to be done to better streamline operational processes, address reduced team sizes and strategically reduce costs. Below, I’ll outline several digital transformation strategies company finance leaders should keep front and centre.
1. Adopting A Truly Comprehensive Data-Driven Business Model
Data management should remain a top priority for any finance team. As Deloitte highlights in a 2023 Crunch Time series report, solving complex data challenges within the Office of Finance supports cost management, financial performance, growth, talent, compliance and innovation. At a time when, according to a report by Eide Bailly and CFO Dive, 54% of financial leaders believe data silos to be one of their biggest barriers to innovation, having readily available, comprehensive, accurate data can support agility and effective decision making even in periods of rapid change.
Embracing the power of data also gives CFOs the opportunity to hire and up-skill talent with critical data skills, which continue to drive growth within organisations. These digital strategies may draw new finance talent to companies as well as instil an improved culture of complex problem solving and a broader business approach to data-driven decision making.
2. Evaluating Outsourcing Options To Accelerate Digital Transformation
CFOs are reckoning with an environment in which a massive amount of accounting jobs are being vacated. From the ”great resignation” to quiet quitting, the past few years have seen employee burnout become a major disrupter across organisations and roles, and the Office of Finance is no exception. As a result, we may see a growing number of organisations leveraging outsourcing to maintain momentum and accelerate digital transformation within the Office of Finance.
Gartner estimates that 36% of controllers are prioritising outsourcing opportunities in 2023, and encourages those considering outsourcing as an option to “look beyond labor arbitrage and assess (business process outsourcing) BPO capabilities based on their technology and transformation expertise.” Any outsourcing effort should include a thorough cost-benefit analysis and evaluation of provider capabilities to ensure the organisation is doing everything it can to optimise the process of digital transformation.
3. Staying Up To Date On The Latest Technology
We consistently see that the most digitally savvy finance organisations are the ones that have put themselves in the best position to ride out periods of extreme volatility. Deloitte estimates that “the right combination of digital transformation actions can unlock up to $1.25 trillion in additional market capitalisation for Fortune 500 companies.” This underlines why it is critical to stay abreast of the latest developments disrupting the tech world and implement those that can create meaningful improvements in your organisation.
Organisations that prioritise technology can not only solve their most pressing challenges but ensure their teams are ready for—and able to adapt to—future technological disruption. While generative AI technology like ChatGPT has triggered countless think pieces on its use in our society, others are hard at work dissecting how it can support the Office of Finance specifically, with the ability to make smarter and faster decisions around financial planning.
CFOs should be careful not to have their teams spin their wheels on projects that may never see the light of day, but employees well-versed and fully trained on new systems and technology will be much better prepared to make an impact when the time comes for innovative solutions.
As CFOs chart a course for the rest of the year, and start thinking about 2024, the focus will be on building and maintaining a sustainable business model. From automation and process improvement to optimisation of data, technology and human capital, CFOs need to focus on solutions that make it easier to execute more decisively. Surviving volatility requires focus and smart agility, and with effective digital strategies and technology, CFOs can act decisively while knowing they are making the right decisions at the right time.
Full article with thanks to: forbes.com/sites/forbesfinancecouncil/2023/06/15/digital-transformation-in-finance-how-companies-can-boost-resiliency/?sh=3a68a8f14dd8
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