Being the most traditional role in a company, Chief Financial Officers (CFO) are now facing the changing requirement and expectation for digital transformation in order to integrate in the industry 4.0.
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The need of Digital Transformation in Finance
Digital transformation is the strategic adoption of digital technologies into every aspect of the company from operations to delivering value to customers. This implementation aids to ameliorate productivity, to deliver better customer experiences and to reduce business risk as well as operational costs.
In the Information Age, every organisation has their own point to start digital transformation in finance. This basic need comes from how to do more with the available resources, how to respond better to fast-changing economic and business conditions. Moreover, CFOs have to undertake the pressure from CEOs and other stakeholders in providing real-time information to support the decision-making. Another obstacle that CFOs have to resolve is the exploding volumes of data from internal to external sources. This leads to the fact that a better finance system is essential for the purpose of gathering and analyzing data.
Source: Information Age
In general, creating more efficiencies, insights, and value over the long term are the fundamental goals for adopting advanced technologies into finance systems.
CFOs – Driver of Digital Transformation
Coming to the 4.0 era, digitization is changing the way every firm operates. The notion behind financial transformation rises from the need of renovation for business to face the future.
According to a Gartner report, less than one-third of CFOs are confident that their technologies are aligned with their requirements for ensuring the future success of the organization. The reason lies in the fact that outdated technologies are still present inside the finance process in several companies. Obviously, challenges coming from process, performance and people are the priority that CFOs have to deal with in the early stage of taking transformation into action.
As a CFO, they are responsible to make the right decision at the right time. With a huge amount of data needing analysing, precision is the key to financial management. Technologies such as robotics process automation (RPA), data analytics and machine learning, artificial intelligence (AI) make this possible and quickly modernise the entire financial operational systems.
After all, in the case of finance transformation, the topic surrounding reengineering people, processes and systems to reduce costs, reduce cycle time, and make finance more strategic is often mentioned a lot because these are criteria that CFOs headed. They can then locate and invest in the technologies and capabilities required to improve these areas.
Future of Finance
Since businesses are still in the early stages of adopting new technologies into their system, Gartner recommends that investment in value-driving finance technology is a must. Due to the fact that the core of the finance function now lies in the value delivery to customers, hyper-automation is one of the best technology solutions for CFOs. By fully automating all complex finance processes, the concentration of financial leaders is secure for the new value-adding services.
With the additional help from hyperautomation in businesses’ operational processes, organisations aim to reduce the need for specialized skills to perform complex analysis. CFOs then will generate more critical insights, hence providing the key empirical evidence for the strategic decisions of the board. BearingPoint’s research shows that digital transformation impacts businesses on daily operational efficiency, business partnering and finance strategy. Besides, implementation of advanced technologies not only broaden the possibilities of the financial department, but also reform the business model.
Overall, the initiative of digital for finance is crucial as they support the business in general and financial function in specific.