Digitization is transforming how organizations in every industry go to market, interact with customers and carry out their operations. But the digital transformation required is complex, time consuming and expensive—and it affects all aspects of the enterprise.
Organizations are already dedicating huge resources to the effort to digitize. Our Global Digital IQ Survey found that 31% of companies globally, and 44% of Canadian companies, are assigning more than 15% of their revenues to digital investments. By 2019, companies around the world are expected to have spent a total of US$2.1 trillion on digital transformation, according to the International Data Corporation (IDC).
Digital Finance is made possible by a series of rapidly converging technologies and business trends, each of which has the potential to significantly impact the traditional finance function. Combined, these trends are creating the conditions necessary for a total transformation of how finance functions operate.
Using sophisticated algorithms, finance teams can deliver data-rich business insights that support better, faster decision making.
Though it doesn’t involve actual robots, RPA uses machine learning, automated workflows and business rules—and potentially blockchain—to continuously execute, validate and even audit repetitive, high-volume financial transactions and other processes.
Costly, complex customized enterprise resource planning (ERP) systems are giving way to cloud-based solutions: dynamic, scalable, virtualized applications and IT resources that foster easy collaboration and access to shared, consistent and current financial information from any location.
In today’s work world, close collaboration is a must. Digital technologies are making it easier than ever for finance staff to team up with the stakeholders they support.
The nature of collaboration is also changing. Today business acumen and interpersonal skills are as important as technical skills—if not more so—and finance teams’ talent needs are evolving as a result.
The finance function is responsible for some of the most sensitive information their organization possesses. Today’s finance teams must make sure they protect that data—and have a plan to respond to near-inevitable breaches.
CFOs that strive to capitalize on new and emerging technologies, tools and ways of working will be better positioned to transform their teams into high-performing finance functions. Our Finance Effectiveness Benchmark Study highlighted several key attributes of such high-performing finance teams:
Think about tomorrow’s customer experience. How will your stakeholders, employees and customers—and their needs—change over the next five years? Younger? More mobile? Digital-centric? Use this exploration to help guide your decision making.
Rethink how the finance function could deliver services. Start with finance’s operating model. What finance services does the organization need? How should the function be structured to deliver on that? And what financial capabilities and other skills are needed to do so?
Invest time in understanding the technologies available today and tomorrow. Finance functions have rarely been at the cutting edge of technology and innovation—but that will soon start to change. It’s important to understand the component technologies of Digital Finance so you can begin to figure out how they could be applied to your organization.
Understand how to fund Digital Finance. Traditionally organizations would capitalize their technology investments over a number of years to spread out the sometimes significant costs. But Digital Finance spending (e.g. licences for cloud applications) is different: it’s typically operational. What changes will be needed to properly fund the shift to Digital Finance?
Partner, Digital Services Leader, PwC Canada
Tel: +1 416 687 8417