Digital Finance: Redefining the finance function

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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).

Fifty-six percent of finance executives surveyed in our Finance Effectiveness Benchmark Study believe improved technology would make finance processes more effective. And 70% of CFOs expect digital developments will change the way their finance organization operates.

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.

Data analytics

Using sophisticated algorithms, finance teams can deliver data-rich business insights that support better, faster decision making.

Robotics process automation (RPA)

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.

Cloud

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.

Collaboration

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.

Business partnering

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.

Cybersecurity

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.

The high-performing Digital Finance function of the future

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:

High standardization

High-performing finance functions work with standardized data and processes
and integrated finance systems.

High standardization

High-performing finance functions work with standardized data and processes
and integrated finance systems.

Faster performance

High performers report finishing month-end close cycles in less than four days.
Integrated planning tools and rolling forecasts enable teams to prepare forecasts
in under a week and budgets in less than two months.

Highly automated

High-performing finance functions report high levels of process automation
around areas such as cash remittances and purchase order (PO) matching.

Insight-driven

Organizations with high-performing finance teams have 40% more full-time staff
in business insight roles—and a commitment to attracting and developing talent.

The Digital Finance model provides CFOs with a path towards a high-performance future—a swift, highly automated finance function focused on delivering insights rather than processing transactions.

Start your Digital Finance journey today

The Digital Finance era is here and finance functions need to be ready for it. CFOs need to take steps now to make sure they and their organizations don’t get left behind by the powerful convergence of technology and business trends that will make Digital Finance a reality. But where should CFOs begin?

Customer and employee experience

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.

Service delivery

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?

Understanding the technology

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.

Explore funding

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?