Getting started on the digital finance journey

Lilian Lwantale, a member of ACCA Members Network Panel. COURTESY PHOTO

What you need to know:

  • End-to-end process performance - Cloud platforms leveraged ubiquitously across the enterprise to enhance consistency in processes and flexibility to scale.
  • Finance collaboration - Digital collaboration tools available on the cloud enabling and supporting dialogue across central and local finance teams, the business and other functions, enhancing connectivity.

Over the years, the role of finance has undergone a metamorphosis, with many Chief Financial Offers (CFOs) assuming a strategic role as virtual co-pilots to the Chief Executive Officer (CEO). The traditional responsibilities of CFOs still consume a lot of time. But the evolution of the role would require CFOs to free up much more time to act as astute “strategists.”

This evolution has already begun in many organisations. Finance leaders are discussing the need to change the talent structure and adopt “bold plays” to prepare their finance organisations for digital disruptions.

Finance’s digital transformation is imperative to making this shift work, as routine processes get automated and exponential technologies usher in the power of unmatched computing to support the judgement and decision-making roles of the CFO. The 21st century CFO is getting ready to shift gears to the world of “digital finance” –thus acting as a harbinger of the digital future of the organisations.

Many CFOs ponder about what digital finance is. Having invested substantial money and efforts in automation initiatives already, there is often a force of fatigue that impedes the thought process to embrace one more change. They must realise that digital finance is far beyond incremental technology tweaks; it is an eco-system that brings together the forces of exponential computing power and the behavioural disruptions of socio-economic forces.

Digital finance is the next generation finance that utilises disruptive technology, innovation, data, and people to elevate and differentiate the capabilities of the finance function. Acknowledging a digitally connected ecosystem is not enough. Finance must take advantage of break-through technologies such as robotic process automation, cognitive analytics, blockchain and internet of things, among others to drive benefits around economics, risk, and value to the stakeholder. Digital finance is poised to radically transform how finance organisations deliver value through -

Dynamic driver based forecasting - Cognitive computing and in-memory enabling advanced planning and forecasting models to mine databases and perform real-time scenario analyses, uncovering predictive trends and generating key data insights.
Automated transaction processing - Robotic Process Automation enabling leaner operations, reducing costs and redirecting resources toward embedded analytics that spot trends, anticipate risks and predict opportunities in high-value areas.

End-to-end process performance - Cloud platforms leveraged ubiquitously across the enterprise to enhance consistency in processes and flexibility to scale.
Finance collaboration - Digital collaboration tools available on the cloud enabling and supporting dialogue across central and local finance teams, the business and other functions, enhancing connectivity.
Expert teams - Finance practitioners demonstrating enhanced capabilities in the digital space, leveraging specialised financial expertise and data-driven insights to become key business partners.

While finance organisations have lots of experience managing change, getting started on the digital finance journey is a binary moment – overcoming the force of inertia to move from static to dynamic. The digital finance journey is one where the moment of start is overdue, yet the destination is not necessarily defined. As the convergence of technology solutions take the world by storm, a common theme of struggle for the finance leaders is where to start. There is no generic answer here as the launching pad may vary with the organisational maturity and risk appetite.
However, finance leaders may follow a paradigm to prepare the ground to begin.

Start with a vision
Where do you want finance to be in the next 3 to 5 years? What do you want finance to deliver? How do you want finance to work with the rest of the business? What are the gaps between the current and future state?
Break it down
Take the finance vision and consider what it means in terms of operational finance, business finance, strategic finance, organisation and people, information and systems, and policies and processes. Assess the current state and consider what needs to happen to reach the future state.

Create blueprint for digital future
Identify the investments that will be needed to bring about the future state. Think about the policies and processes that need to change or the organisational structures that need to be created or taken apart. Consider the talent mix to ensure you have the right people – and the development programmes to help them fulfil finance’s new role.

Think digital
The CFO as the business partner needs to play this role of a catalyst and strategist – to protect the value and relevance of finance in a rapidly digital future.

If business leaders around you are going to compete in the digital world, they will need to process more information more quickly, and turn that information into deeper insights faster than ever. That will require new technology—and a group of people who are curious and skilled in using it.

Lilian Lwantale is a member of ACCA Members Network Panel.