Given the rapid pace of change in today’s business landscape, it’s not surprising that the digitisation of finance is high on the agenda for CEOs and CFOs. According to Gartner, when looking at the digital future of finance, they found that 70% of finance leaders are accelerating their digitisation initiatives, as they strive to keep up with trends in automation, improve their decision-making, and boost the efficiency of their processes.
The challenges surrounding tech implementation within finance are well documented. Choosing the right path towards digitisation isn’t easy. Even for CEOs that aren’t prioritising technology, digitisation is inevitable. Data has become one of the most valuable commodities in modern society. It drives everything, from good customer service to machine learning and automated processes.
Statista found that the worldwide data created, consumed, and stored stands at about 79 zettabytes today, with that figure expected to double by 2025. Back in 2010 this figure stood at just two zettabytes. Rather than seeing digitisation as a problem to be dealt with, CEOs should instead prepare to take advantage of the endless opportunities it presents.
However, to grasp these benefits CEOs must consider what their business specifically stands to gain. They’ll need to consider some important factors, such as how the storage of data may impact their current compliance obligations, how access to new functions and dashboards is regulated, and what role data-driven modelling might play in their future decision-making.
How to implement new technology in your organisation
With so many digital technologies around it can be difficult to know where to start. CFOs and CEOs are responsible for ensuring the technology chosen is fit for purpose (and correctly implemented). They also must ensure any solutions adopted can integrate with other systems in use. Or if those existing systems are replaced, they need to make sure the data isn’t lost during this process.
Assess your specific needs
A self-assessment is the first thing that should be done when implementing new technology. This will help you to determine your business’s particular goals, which will inform the scope of technological help required. A good place to start is looking at the finance team’s pain points and choosing a system that solves these problems.
Prioritise integration and automation
When implementing software, you should of course search for finance-related functionality that will assist with the team’s daily obligations. But there are other characteristics to prioritise too. Is the system Cloud-based? This will ensure the team can work remotely (along with a host of other benefits). Ensure the technology integrates with any other systems you use to avoid unnecessary data entry. And automation should be an essential capability. Does it automate many of the tasks that employees currently have to complete manually?
Choose the right provider
This doesn’t just mean choosing a reputable provider with good reviews. It’s also choosing the right provider for you. Are they aligned with your company’s philosophies? Are they flexible, do they offer sufficient support, and are updates included in the service? They will likely take you on a technological journey and be a long-term partner, so you want to get this choice right.
Fix your data and processes
No matter how sophisticated the technology, it is only as good as the data it is fed. If your data is disorganised or inaccurate, it’s important to remedy this before adopting a new accounting system. Ensure you have adequate processes / frameworks too, as well as the relevant resources to manage and maintain the technology once it’s in place.
Involve employees with implementation
Get the finance team involved with the tech rollout. This should start as early as the selection process. Get their thoughts on which financial management solution might be effective. And give them responsibilities when implementation is taking place. If they feel a sense of ownership around the project, they’re more likely to give it their full backing.
Lay out a roadmap
Once you’ve attained more details about the implementation, ensure this is communicated to employees. This includes timescales and specific changes that will happen to daily routines. This will create a sense of clarity and control, which is important because change can be daunting. Lay out accountabilities so that each person knows what role they will play during implementation.
Provide training
You shouldn’t just put a new finance system in place and then expect staff to immediately fend for themselves. Most software providers will offer training as a service, so it’s important to utilise this. Not only will it help to get the maximum return on investment from the technology, but it will empower employees too as they will be able to fulfil their role successfully.
The challenges of implementing new technology for finance departments
The first thing to note is that the digitisation of finance doesn’t have to be about replacing employees, it can be more about easing the challenges facing finance departments and making their roles easier. Reassuring staff about this is often the first hurdle CFOs must overcome when they introduce automation into the finance function. Beyond this, there are numerous other challenges inherent to the implementation of new technology.
According to a joint study by Deloitte and the Institute of Management Accountants called Mirage to Reality: Bringing Finance into Focus in a Digital World, finance departments regularly experience difficulty adopting even basic technology, primarily because they’re already steeped in manual processes and legacy systems that are difficult to shake. This is where a ‘change management’ process becomes crucial when embracing a new innovation.
Loyalty to outdated systems
There may be a reluctance from some employees to leave legacy systems behind if they have used them for a long time. This may see them continue to use these old systems, which will lead to an underutilisation of the new technology (and ultimately represents a waste of investment).
Failing to get buy-in from employees
Continuing with this trend, those in the finance team may not be onboard with the implementation. With any change management project, it can be easy for negative feelings to spread among the workforce, which impacts the level of buy-in. It’s important to promote an innovative culture that rewards those who embrace innovative ways of working.
Lack of technical expertise
When putting in place new financial methods (particularly those of a digital nature) there’s a chance the existing workforce won’t have adequate technical expertise. This is why training is so important. And it’s probably a good idea to start hiring individuals who have experience with the digital tools you are looking to implement.
Lack of resource
It’s not just using the technology that’s important, it’s maintaining it too. Do you have the infrastructure to manage the software that is being adopted? And do employees have the necessary resources, if, for example, they’re expected to work from home using a Cloud-based accounting system? Fortunately, many providers now take care of aspects like hosting, so businesses don’t have to manage their own servers.
Data loss
When moving from one system to another, one of the biggest challenges is ensuring data is migrated successfully. Considering how valuable financial data is, it can be very damaging for finance teams if this is lost or corrupted. Before simply discarding the old system, ensure all data has been backed up or moved to the appropriate place. Work with your new provider as they’ll likely offer services that ensure data migration is completed in the most seamless manner possible. Ensuring you facilitate data or Cloud migrations effectively will reduce potential data loss.
The benefits of implementing new technology for finance departments
Through digitisation, finance departments take on a completely new role within their respective businesses. Instead of simply being a back-office function, technology enables them to become an integrated part of day-to-day business operations, allowing them to complete faster payment processing, rapid exchange of documents, predictive modelling and forecasting, ERP integrations, and more. The CFO is able to be a primary value creator.
Some of the benefits of technology in finance include:
Increased efficiency through automation
A recent report by McKinsey revealed that CFOs must get in front of digital finance or get left behind, citing efficiency, insights, and value as the foremost competitive benefits. More than 40% of finance functions can be automated, including cash disbursement, revenue management, and general accounting. A further 17% can be at least partially automated. This reduces human error and can give your team more time or capacity for other tasks and collaboration.
Agile decision-making
Slow or reactive decision-making is usually due to poor data or a lack of reporting. By digitising your finance department, your business will have the opportunity to establish standardised reporting mechanisms that make auditing, decision-making, and forecasting much quicker. This allows the business to be more adaptable in a rapidly changing economic landscape, and your finance team can practise continuous accounting rather than waiting for month-end to see which changes need to be made.
Greater value and potential
Smart analytics can help your business to uncover hidden value and growth opportunities that might otherwise have gone unnoticed. This includes automating data reconciliation to a single truth or combining information from multiple data sources to generate user-friendly dashboards. These insights can be presented at board meetings to demonstrate untapped potential.
Need help digitising your finance function?
At Advanced, we provide a Cloud-based accounting software called Advanced Financials. This financial management solution brings every element of the finance function together in one place. It automates many of the most mundane tasks for finance employees such as bank reconciliation and reporting, so they have more time to focus on the strategic and analytical side of their work.
Built by finance people for finance people, it’s intentionally simple to use, with a seamless interface and user experience. This means that even those most set on sticking with traditional methods can easily make the jump to the digital realm. With built-in dashboards, the finance team can access a snapshot of financial health at any time, and the CFO can present transformational predictions at board meetings.
Harness the power of technology today and equip your finance team with the tools they need to succeed in this ever-changing business landscape.