By Neil Krefsky, Head of Finance and Risk Product Marketing, SAP
No one knows what the future holds, but it does feel like we are entering into a golden era of digital transformation. From phone apps and cashless commerce to artificial intelligence and process automation, everything in what people do and how they get things done is changing in countless ways.
The same is the case for businesses and their finance organizations. According to research conducted by StrategicCFO360 and SAP, 71% of participating CFOs believe they’re ahead of the curve in terms of openness to change with technology systems, while only 5% consider themselves laggards. But perhaps more astounding is their role in making corporate technology decisions over the past year, with 64% saying their influence has increased.
As CFOs continue to direct digital investments for the entire company and add value through their own transformation, some finance organizations are evolving into full-fledged business service centers.
Embracing the concept of modern financial management systems
For finance teams, discussions around technology adoption are guided by a more-refined managerial view beyond traditional concerns such as financial disclosures. They now cross multiple dimensions, including profitability, cost centers, customer engagement, product innovation, geographic expansion, and channel engagement.
The faster finance teams gain this knowledge, the better positioned they are to help other lines of businesses embrace change now, share lessons learned, and advocate for a more future-focused approach to digital transformation. Research data from StrategicCFO360 and SAP show that CFOs are already considering this line of thinking.
Three-quarters of CFOs consider the automation of resource-intensive and manual tasks and cloud technology as the main elements of a modern finance system. Furthermore, over half of survey participants believe workflow automation (68%) and predictive analytics (54%) have the highest potential for enabling the most value-added use cases.
These technologies are paving the way to, for example, shared services centers that standardize processes across the company with capabilities that support automated receivables and payables and proactive cash management and fraud detection. Survey respondents also expressed a desire to improve sales and operations performance and create a finance-driven strategy to further strengthen the entire value chain.
Such transformation is undoubtedly powerful for the finance function as well as the rest of the business. However, having one data source for all financial transactional and analysis processes still tops the list of favored technology enablement ‒ even above the cloud and automation. StrategicCFO360 and SAP noted in their research that 81% of companies generating over US$1 billion in annual revenue and 50% of businesses with less than $10 million prioritize this area of their digital strategies.
For this vision to succeed, StrategicCFO360 and SAP recommend prioritizing change management as a vital component of the overall corporate strategy, including technology adoption. Unfortunately, resistance to change is common within corporations, especially for technology projects. However, finance teams have the power to lead other units in their organizations to embrace change by connecting the dots between the ways each team member is individually positively impacted as well as business outcomes.
Managing change through a digital lens
The StrategicCFO360 and SAP study clearly shows that strategic CFOs understand the value of embedding new intelligent technologies into not only their end-to-end processes but also the rest of the business’s.
Considering the real-life transformations we see in our customers, it’s easy to see why. Organizations can pivot quickly to address unanticipated opportunities and risks. New business models can be established quickly with fewer financial implications. Organizations can even restructure themselves to reflect how people work together ‒ whether remote or in person ‒ without neglecting the responsibilities necessary to maintain business services, customer expectations, and partnership requirements.
By evolving complex financial operations, finance teams can become active business partners and effectively support growth strategies. They can automatically reconcile millions of records and several thousand transactions daily from across business units, geographies, and systems to provide real-time reporting and advanced analytics. Doing so empowers business users to consider the financial impact of their decisions, allowing them to grow the business and take on new opportunities more strategically and with less risk.
Learn more about the digital strategies of strategic CFOs and how change management serves as a critical part of leveraging new intelligent technologies. Read the StrategicCFO360 and SAP report “How New Technologies Are Innovating Finance.”