We hear stories of the successful transformation of Finance functions, but the unsuccessful ones are quietly buried. Therefore It is important to play devil's advocate and understand various facets of digital transformation. Let us see how we can do that.
1. Do I really need digital transformation?
Usually, we hear the ruse - the technology is there, everyone else is doing it, etc. But the question is: Why do you need to do it? Does work-from-home necessitate transforming the employee expenses? Is insufficient Audit trail making your accounts look less reliable? Is the actual Receivables write-off nowhere trends to the provision being created? Are you stuck with the Data warehouse? Answers to such questions would help ascertain if digital transformation is a strategic differentiator for your organization. This also makes it easier to get buy-in from the stakeholders.
2. What should I transform? Where do I start?
Automation, Visualization, Analytics, and Compliance are key areas that form the underpinning of the digital transformation. Value analysis is a reliable method to determine where to start. It entails mapping different processes, analyzing the value they bring, and prioritizing to maximize the overall value. In addition, how the transformation will align to the organization's strategic, tactical and operational goals determines the way forward. E.g. If the organization wants to venture into online sales as a strategy, transforming the AR and Tax systems would be a good option.
3. How to transform? Does finance need special considerations?
For Finance transformation, there is a plethora of legal, internal control, security, and Audit requirements that need compliance. We need to assess the system architecture and technology platform best suited for this transformation. These big-ticket items need a substantial commitment of budget and resources. Also, once selected, it is quite difficult to switch. Therefore, we must analyze each option in consultation with stakeholders. In addition, get feedback from external sources, and then decide what would be the best for your organization.
4. When should the transformation happen?
The best view is while you sit on the fence! You can see both sides equally well, but then you become the first target in case of a crossfire! Take your time on the fence, but once you have figured out ‘Why’, do not delay the transformation. Even a delay of 6 months will need a realignment and may result in either start afresh or playing the catchup game. Delays also result in cost escalations and losing momentum which may necessitate a bigger effort to counter the inertia of not doing anything. Going too fast often results in a change management nightmare, where changes happen too fast for an organization to successfully realize the value and get a great user experience. Figure out a balanced approach and optimize.
5. Who should I trust to take the organization through a transformation?
There is the usual IT group within the Business and subject matter experts, there is the IT department and then there are vendors whose expertise can be leveraged. The availability of people with required skill sets, along with experience in digital transformation are factors that impact risk. A Metrics that gives visibility into SWOT, with a focus on Cost, Performance, and Delivery will help identify the right option.
In summary, Finance is a great area to start the digital transformation. Gartner has provided detailed analysis around it. There are usually quick gains, with results that can be showcased to get a broader buy-in for such transformation throughout the organization. The costs are decreasing for undertaking the transformation as technology is becoming better. If a need is determined to initiate the transformation for the Finance function, now is the time to do it.