Finance transformation is changing your organization's finances to meet your goals and objectives better. Recently, finance transformation has become an emerging trend in finance because it disrupts the traditional system by adopting the efficacy of technology. According to Gartner, a reputable technological research and consulting firm, 69% of business leaders believe digitization initiatives are accelerating and most expect digital technologies to drastically transform the finance industry by 2026. Additionally, Alexander Bant, the Chief of Research for Gartner Finance, opined that CFOs now must invest in digital enterprises, meaning their business models and operations, while at the same time accelerating the digital investments they're making in the finance function itself.
Changing how you do business so it requires less capital is now the real deal. For example,
How does an organization achieve financial transformation? What is the role of technology in achieving financial transformation? In this article, I will explore some common questions about the future of finance and give tips on preparing yourself.
What Is Finance Transformation?
Finance transformation is changing your business's finances to make them more efficient, effective, and profitable. The finance transformation movement is a set of initiatives designed to modernize how companies handle their financial data.
Finance transformation is a large-scale effort that aims to move your business from legacy systems to new technology. When you think of finance transformation, you think of how automated processes can enhance financial performance. This is the case where improvement ambitions are fostered by the features of digitalization. For instance, in the case where chief financial officers(CFOs) employ the efficiency of digital technologies such as machine learning, Artificial Intelligence (AI), and robotics to transform finance.
Finance transformation is a process that helps organizations take advantage of new technologies and processes to deliver better, faster, and more cost-effective services. Without a doubt, financial management is a crucial aspect of running any business. This is especially true for large enterprises, which have to deal with numerous financial tasks on an ongoing basis.
How Do You Drive Finance Transformation?
Driving finance transformation is a process that takes some time and effort to implement. It's about change management, which means it takes time for people to understand their roles, build their skills and become comfortable with new ways of working. A good start is by defining clear objectives and the business benefits you expect from them. By bringing together finance and technology leaders to collaborate on a shared vision of what their users need from them, companies can create a culture where innovation is valued and driving positive change becomes part of everyone’s job.
The first step to driving finance transformation is to create a clear vision of what your organization's finances should look like. Then, you need to find the best way to put that vision into practice. For example, suppose your vision is for a leaner, more efficient company with minimal waste. In that case, you might want to focus on automating manual processes and streamlining systems so that employees aren't wasting time doing things manually when they could be using technology instead.
Another way to drive finance transformation is by working closely with your employees while adapting their roles or responsibilities within the company. This helps ensure that everyone knows exactly what needs to be done without confusion about expectations or responsibilities. By creating a culture of continuous improvement, you can ensure that your employees are always on top of their game. This will help improve the quality of their work and ultimately drive business results.
Adopting intelligent technologies is one of the most important steps to driving a financial transformation. Intelligent technologies are changing the way finance operates. The adoption of intelligent technologies is driving transformation by providing new ways to leverage data, automate workflows and drive new revenue streams. As a result, the finance function is becoming more strategic and agile.
The adoption of intelligent technologies is creating new opportunities for finance teams to work directly with other stakeholders across the organization. This collaboration helps drive innovation and fuel growth. As obtained in the image below(source: PwC), automation will lead to an agile workforce to accelerate growth.
Intelligent technologies can optimize the financial process by automating manual tasks and streamlining existing processes. As a result, they help finance teams work smarter and faster while improving accuracy. Intelligent technology solutions are available in many forms, including business intelligence (BI), data analytics, and artificial intelligence (AI).
The Role Of Technology And People In Digital Finance
The role of technology in finance transformation is to automate and scale the tasks that people do. As the pace of business increases, it's crucial to ensure that your organization can keep up with it. Technology can help you do this by automating tasks and allowing you to scale them across multiple teams and geographies. For instance, ERP and EPM systems are two of the most common types of financial management software. ERP systems are enterprise resource planning systems, while EPM systems are enterprise performance management systems.
Both of these types of systems can be used to transform a company's financial operations and help streamline its processes. ERP and EPM systems are the backbone of many modern financial institutions. ERP systems manage all aspects of a company's operations, from accounting to logistics, while EPM systems provide additional functionality for more advanced planning and budget analysis.
Technology is also essential for transforming your business by enabling new work methods. You can increase collaboration and innovation by using technology to connect people and teams. This benefit is that your organization can focus on the things that require the most human capital and attention. By creating an environment where machines do repetitive tasks, you can free up your team members to focus on more valuable work like innovation, strategy, communication, and customer service.
The role of people in finance transformation is to ensure that the IT systems are aligned with the business requirements. This aims to ensure that both sides are on the same page and that each party understands what the other side is doing. People are the heart of finance transformation. The people involved in these changes must understand how important they are to the company and how their roles and responsibilities will change. They need to be able to adapt, learn new skills, and work together with their colleagues to make the changes happen.
Companies or organizations looking to achieve financial transformation must create a culture that embraces change. The people involved in the transformation need to be able to adapt, learn new skills, and work together with their colleagues to make the changes happen. The HR department is crucial in ensuring that all employees are aware of and on board with the changes. They must also ensure adequate training so people can adopt new roles or responsibilities without problems.
DNA of the CFO: Is the future of finance new technology or new people?
The DNA of a CFO is a combination of business acumen, financial leadership, and operational efficiency. The DNA Of a CFO in finance transformation is the ability to see the bigger picture and to use your business acumen, financial leadership, and operational efficiency to create value for your company. The CFO should have the strong business acumen to be able to make intelligent decisions when it comes to financial matters. This includes assessing market trends and identifying opportunities within those trends that will help the company grow.
As it stands, the future of finance is both new technology and new people. The role of the finance function is changing. As companies become more data-driven, they need to make better decisions faster than ever. The next generation of finance leaders will need to be comfortable with technology and able to work collaboratively with their peers in other departments like sales, marketing, and operations. Advances in new technologies like the cloud, analytics, and mobility offer CFOs exciting opportunities to reimagine what their finance function should look like.
For instance, as obtained in a study by McKinsey & Company, over the past decade, finance departments reduced costs.
The future of finance will rely heavily on new technology, but it will also be influenced by the people who use it. The financial world has always been very forward-thinking, and to stay ahead of the curve, it needs to keep innovating. As new technologies become available, they must be adopted and adapted to remain relevant. However, this also means that there will be a need for people willing to learn how these technologies work to help make them accessible to everyone else.
The finance professionals will be required to transform their skills, processes, and organizational structure to embrace the new technology available for finance processes. The process of making decisions related to cash flow, investments, and risk management is significantly enhanced by intelligent technologies. These technologies can provide accurate and timely reports, which financial professionals can use to make decisions. The focus of finance professionals will be on using these intelligent technologies in a meaningful manner so they can take advantage of all the benefits they provide.
Conclusion
The role of technology in finance transformation is not only to make processes more efficient but also to use the information that it collects to help people make better decisions. This can be done through analytics, machine learning, and artificial intelligence. Many financial institutions have already adopted these technologies to gain a competitive advantage. However, there is still a need for professionals who can help make them accessible and easy to use for everyone else.