Digital transformation in corporate finance

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It is undeniable: we are in the middle of the digital revolution. From remote telemedicine to blockchain applications which, and, almost every aspect of our lives is increasingly saturated with technology. Digital transformation affects all verticals in all markets around the world. While some industries have moved faster than others, each transformation has followed an inflection point: the technologies required to power meaningful transformation are reaching a level of maturity and availability that enables change. Companies able to adopt these technologies and use them successfully to drive their operational and digital transformations will gain a decisive advantage over their peers.

“The technologies needed to reinvent finance are there and they will only get better,” observes a global accounting and consulting firm. In addition, we can learn a lot from other functions of the company. Modern factories give us a glimpse of what automation can offer. Smart contracts show us new ways to track assets. The lessons are there. We don’t have to reinvent the wheel. Rather, we can focus on adaptation and adoption.

The report continues to note, however, that while the technologies needed to effect seismic change in industry are emerging (usually in the form of pilot programs and spot trials), there is still a lot of evidence of evolutionary transformational change. “The roadmaps for this future are still being developed. This month, Business Chief analyzes three of the key trends affecting the relationship between digital transformation and financial operations, and examines how businesses can best adapt and thrive under these new conditions.

Increased automation

From manufacturing to supply chain and logistics operations, automation is the emerging tech trend to define the century. In the finance industry, robotic process automation (RPA) has the potential to reshape the role of the finance professional, as well as dramatically increasing the potential for value creation across businesses.

It is estimated that financial planning and analysis (FA&P) professionals spend their working days collecting, consolidating, verifying and formatting data manually, leaving only 20% for financial analysis. high level and strategic planning. The significant adoption of RPA in the industry could change all that. RPA, which uses AI to train software robots in increasingly complex tasks, from handling complaints and transactions to monitoring compliance and audit processes.

This technology manifests itself mainly through a phenomenon known as “co-bots”. Rather than removing humans from the equation, the goal of a is not to replace the human worker, but rather to increase the capabilities of that worker through the automation of repetitive tasks, superior analysis and work flow management. For example, process automation has a significant impact on invoice management. According to, using AI-based predictive technology, to know with nearly 95% accuracy when a particular bill will be paid.

Financial automation is gaining ground in some of the more developed markets. In the United States, for example, a report released in June found that about 83% of corporate finance functions have deployed RPA in some way, and about 95% are experimenting or deploying technology. machine learning in their financial and accounting processes.

Automation in finance has almost limitless potential to increase efficiency, agility and return on investment. As the technology becomes more sophisticated, its applications “evolve from simple automation of individual tasks to complete automation of processes that could improve the accuracy of financial analysis and forecasting,” according to Automation. in finance. The Gartner report also notes, however, that the financial industry is still under pressure to increase the ROI of automation deployments, adding that “at the same time, financial robotics needs to be scaled up to shared services. and to other financial sub-functions such as purchasing and taxation. “

Powerful analyzes

One technology trend that remains closely tied to the increase in automation deployments across the industry is the growth and changing nature of analytics. The ability of financial services to divert their energies from back office reporting to forecasting and predictive analytics has powerful implications for industries like insurance and investing. The power of data analytics to harness and learn from vast pools of data (which would simply be impossible for humans to manually assess) is a game-changer for the industry.

However, the game hasn’t changed yet. According to a report released earlier this year by, just 14% of financial organizations successfully mine the large volumes of transaction data they accumulate. are either overloaded with too much data, limited in access to their data, or hampered by the technology they use to analyze the data. The stakes are also high; that every incorrect decision about financial analysis can cost a business up to 1% of its revenue, a number that can increase dramatically during an unsuccessful transformation.

“CFOs need to ask what technologies will allow finance to deliver on-demand reporting, how data should be governed as reporting grows to integrate financial and non-financial data, and what skills finance will need to deliver information in an on-demand reporting environment ”. “Finance has to balance the need for precision with the need to make a huge volume of data available for decision making, which is a new muscle for many finance teams. ”

The era of the digital CFO

As digital transformation affects all aspects of a business organization, the need for digitally forward-thinking executives extends beyond CTO, CSO and other traditionally tech-driven roles. .

A January report this year by Sage found that 98% of CFOs say their jobs have changed dramatically in the past five years, with around 75% saying they now play a pivotal role in driving the transformation. digital within their organizations.

“The modern CFO moves from being a retrospective number collector to being a pioneering strategic leader who uses data and emerging technologies, such as artificial intelligence and predictive analytics, to create a vision for the future of their business. business, ”said in one. “The digitization of businesses is fundamentally changing the way finance executives work and the adoption of technological change will separate executives from laggards in this new era. However, a lack of cultural preparation in the finance office can slow the adoption of new technologies and hamper the achievement of optimal results with any digital transformation.

Just being a tech savvy leader is not enough for the modern CFO; the most successful leaders in this field must be the engines of cultural and digital transformation not only in their own financial departments, but throughout the company. “Corporate culture plays a critical role in the effective integration of any technology,” warned “As CFOs drive digital transformation forward, they shouldn’t overlook the critical role they play in ensuring that that the teams have the necessary skills to optimize these solutions and dispel any misperception. and concerns about AI and automation across the organization. “

However, if the modern CFO can combine cutting-edge digital adoption with smart and agile strategic decision-making, while striving to successfully create culture change and Industry 4.0 readiness across their organization, he can be a formidable agent of change. “CFOs have access to the most important data of the business and the insights gained from this data is essential to move the business forward,” commented. “Data such as inventory management, compliance changes and financial forecasts need to be configured and collected correctly in order to glean the right information and operational efficiency. This creates a real opportunity for CFOs to be innovation “change agents” in the company’s digitalization journey. ”

The evolving role of corporate finance

As automation and analytics gradually take on a more mature role in the functioning of corporate finance divisions, the roles of these business units and the finance professionals who work there are set to change dramatically.

This trend can be described as an upstream migration. As functions such as budgeting, processing, and reporting begin to approach full automation, finance professionals will fill new roles for their partners and clients. According to Deloitte, with digital solutions offsetting routine workloads, financial services will have more opportunities to proactively create value and lead strategy. These new roles will include functions such as “scenario planning, advanced forecasting and better visualization.” Teams of business partners will come together to focus on the most complex business decisions, moving as needed. ”

In essence, the digital transformation of the more mechanical functions of a finance department will create a world where the lines between financial discipline and other business functions such as leadership, supply chain and HR are increasingly blurred. This interdisciplinary world will require a change in attitude and training focus for these departments, but has the potential to promote agility and inter-company communication. “With automated operations, finance will double its business knowledge and services,” predicts Deloitte. “Whether Finance continues to direct the resources currently under its control will depend on its ability to add value. It will require quality information and exceptional customer service. Some financial organizations will evolve into full-fledged business service centers. ”

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