COVID-19 exposed wasteful expenditure and inefficient processes across the finance function; issues we may not have noticed if we weren’t forced to work differently.
If anything, the widespread disruption caused by COVID-19 has proven that businesses must be ready to adjust their strategy as new challenges and opportunities arise. And the finance team plays a pivotal role in this strategic thinking.
In the months leading up to the pandemic, CFOs in South Africa were getting comfortable with the idea of driving digital transformation in their businesses. Our CFO 3.0: Digital Transformation Beyond Financial Management report found that 87% of senior financial decision-makers play a role in digital transformation and say that emerging financial management technology is key to success in their role.
Only 10% of CFOs expressed concern that artificial intelligence (AI) would make them redundant. The remaining 90% welcome automation performing more of their day-to-day accounting tasks in the future, with 40% looking forward to the improved forecasting and financial planning that AI will enable.
Our research also revealed that CFOs aren’t afraid of change, with over 70% saying their organisations were ready for more automation.
Digital Finance Future
Until now, changes in financial accounting have been slow, measured, and incremental.
“Digital transformation” has come to mean anything from eliminating manual, repetitive tasks like invoicing, payroll, data entry, and bank reconciliation, to making on-premise applications accessible remotely. Sure, these changes have measurable impacts on productivity and revenue, but they’re not transformative, in the true sense of the word.
The Cambridge Dictionary defines transformative as “causing a major change to something, in a way that makes it better”. Another dictionary defines it as “the power to change dramatically”, using synonyms like “born-again” and “metamorphic”.
Major. Better. Power. Dramatic.
Words that suggest that transformative change goes beyond substituting analogue work with digital work. Rather, transformational efforts will create all-new competitive advantages, like unique market insights and support for new business models.
We expect this new Digital Finance Future to emerge in the next five years when emerging technologies like 5G, AI, hyper-automation, Digital Twins, APIs, and blockchain collide to enable tech-powered decisions, reimagined processes, and a largely autonomous, hands-off finance function.
The art of the possible
The nature of work has shifted, and people now expect to work anywhere there’s an internet connection. Shifting workflows and processes into the cloud was the starting point. Now, senior financial decision-makers are adopting smart applications with built-in workflow and exception handling processing that can accelerate information flow and move finance from a clerical role to a value-adding strategic one.
It will also take finance one step closer to true transformation when CFOs will tap into massive internal and external datasets to reimagine operational aspects of the business completely and dramatically expand the capabilities of the finance function.
Although it starts with multi-tenant cloud solutions designed for a mobile-first world, financial leaders should expect that the technologies they’ll use in future will be several step changes ahead of the tools they use today.
(A)head in the cloud
As CFOs warm up to new technologies, acknowledging that these innovations can help them make faster, smarter, and forward-looking decisions, they also realise the value of cloud.
Traditionally, financial systems would take days, sometimes weeks, to collect and analyse information. But modern enterprises operate in an always-on, digital world where results need to be delivered as quickly as possible.
Cloud financial systems work in sync with the business, offering speedy digital alternatives to error-prone, lengthy, paper-based processes. No longer functioning in isolation, these tools do more than automate; they allow finance to become an integral part of decision-making and strategic planning.
Here are five reasons to consider moving to a cloud-based financial system:
No business can afford to be held back by disjointed processes and cumbersome systems. Conventional software packages and manual processes can’t track modern business metrics. Cloud financial systems and automation simplify multi-step processes and enable business agility, which allows finance staff to easily reconfigure workflows and data points without needing to call IT for help.
Keep business in the loop
When finance is isolated, crucial transactional data isn’t readily available to everyone and, thus, isn’t used to inform broader decision-making. Conversely, when your financials operate in the cloud, data is available in real-time so stakeholders can access information whenever they want to and wherever they are.
Avoid information bottlenecks
Error-prone, paper-based and time-consuming processes cause information delays, which cost the business money. By implementing a cloud financial solution, designed to work with other business functions, you can eliminate the need for spreadsheets and bring data directly into the financial system for easy processing and analysis.
Automation saves costs, improves efficiency, and streamlines processes. Businesses can gain a competitive edge when they leverage a connected, digital system to increase productivity and enhance outcomes, especially if this system easily integrates with the organisation’s other cloud-based solutions.
Many finance solutions require specialist expertise to develop and/or customise reports, which can slow down the availability of critical information. Cloud-native finance tools provide self-service access and user-friendly editing functionality, making it easier for finance to provide key insights to those who need it.
Say goodbye to business as usual
Cloud financial solutions can be rolled out incrementally, allowing you to replace your core financial functions as a starting point and then add modules, reports, and API connections, depending on your needs and resource availability.
Rather than simply implementing a newer version of your current software, which may not deliver long-term value, look for solutions on platforms that contain new technologies like chatbots and machine learning. Your chosen solution should be built on modern architectures and robust platforms with the ability to scale.
Don’t settle for incremental improvements. Find solutions designed for the future of your firm, not its past.
Want to delve deeper into this issue? Sage has partnered with ITWeb to host a webinar on the Digital Finance Future.
Webinar: discover the digital finance future
Sage, in partnership with ITWeb, invites you to an enlightening discussion on the digital finance future, where we will examine the changing role of the CFO, the emerging technologies enabling this new role, and why senior financial decision-makers must become visionaries using data and digital to take their organisations into the future.
Date: 05 November 2020
Time: 14:00 (GMT+2)
Duration: 1 hour