While business leaders from every industry scramble to master the winning formula for digital transformation, one thing remains clear: technology has the potential to redefine roles within their business. It offers businesses access to real-time, valuable insights that provide the make-or-break edge necessary in today’s fiercely competitive environment. So how exactly will these roles, and business strategy, be enhanced by digital transformation?
Redefining the role of the finance department
Traditionally, finance departments were defined by manual processes, closing the books, managing risk and meeting regulatory requirements. However, the advent of big data, machine learning, and AI are pushing the boundaries of what is possible within finance.
The development of these technologies is reshaping the modern finance department at an unprecedented rate. From CFOs to accountants, roles are evolving from ‘scorekeeper’ into that of a strategic business analyst and consultant. The challenge is how to provide these new strategic services while still doing the ‘day job’ of balancing the books.
Liberation from the mundane
A recent BlackLine survey revealed that during the month-end close process, nearly a quarter of C-suite respondents believed it takes nine to 10 days to identify potential accounting errors and make the necessary adjustments. This is equivalent to 114 extra days per year. This highlights the considerable challenges associated with the ‘day job’ for many accountants – the sheer volume of time absorbed by manual checks and corrections.
However, with automation increasingly liberating workers from manual tasks across many areas of business, finance departments are set to reap some of the biggest gains. Technology can outperform humans on certain chores that are critical to finance departments, such as cross-referencing transactions; matching at a far quicker and more accurate rate than a human. With newly-spare time, finance departments are able to dedicate more manpower to mining the wealth of strategic insight at their fingertips.
Embedding automation, control, and period-end tasks within day-to-day activities makes it possible to gain real time financial intelligence, enabling finance and accounting teams to provide unprecedented value to the larger business.
Better business decisions
Acquisitions and mergers involve a lengthy process of due diligence. Finance departments have the important task of looking at the numbers in question to determine the potential for future growth, helping the business to see the possibilities, or pitfalls, which could occur in future.
Continuous accounting, which shifts the finance department from a monthly to a near real-time data cycle, allows finance departments to make better-informed decisions on mergers and acquisitions. With 24/7 data, anyone in the department can gain quick answers to important questions about cash flow, risk profiles, regulatory requirements and so on. It will also allow them to affirm whether the acquisition or merger is in line with company goals, whether the company is capable of structural change, and whether there is unanticipated debt load, cash flow, income, and burdens that will need to be managed.
Businesses that realise the potential of the finance department’s wealth of strategic insight will have a stronger edge over their competition.
Examples include advising on potential business expansion, a new cost strategy, or moving into new verticals for growth. Rather than solely managing data, digital transformation enables finance departments to activate it, and uncover valuable insights that ultimately determine the success of their firms.
Building a talented team
Staff turnover is a monumental challenge for any business, costing time, resources and money. Add a looming global talent shortage to the equation, and it’s clear that businesses must rank staff retention as a priority. On the upside, a little-discussed benefit of digital transformation in the finance department is the potential to retain and build up a talented team.
As technology like automation replaces manual data entry processes, accountants will no longer be tied to tedious, demoralising tasks – often tasks that make no use of their professional qualifications. Instead, once these tasks are taken over by automation, staff can be upskilled, learning instead how to interpret and analyse data. This not only benefits the business, but benefits the individual as well by adding to their personal development. It also means highly-qualified staff are able to spend time on intellectually stimulating tasks.
Is your company prepared to compete?
Whilst unlocking the value of financial data can present challenges, it offers companies a key competitive advantage, which is essential in a high-density market. Yet there are many companies that still don’t do this, despite the extra capacity it creates. It is time for businesses to treat their financial data as a priority asset and invest in the technology, tools and people to tap into this readily available resource.
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What insights will future finance deliver?