Automation » Is digital success as simple as following a transformation roadmap?

Is digital success as simple as following a transformation roadmap?

Navigating the complex technology market to find solutions fit for your business is no mean feat. Understanding the landscape and ensuring teams are aware of changes is vital

In the mid-20th century, a simple steel box revolutionised global trade – the shipping container.

Before its introduction, loading and unloading gods was a labour-intensive process, often taking days or even weeks. With the advent of standardised shipping containers, cargo could be transported seamlessly from trucks to ships to trains, drastically reducing costs and boosting international trade.

Much like the shipping container transformed global commerce, digital transformation is poised to reshape the way businesses operate in the digital age. As a direct result, the role of the CFO has evolved beyond traditional financial management.

CFOs are instrumental in guiding digital transformation in several ways, including strategically allocating resources to impactful technologies, assessing associated risks and harnessing data for insightful decision-making.

More recently, they have also been responsible for fostering cross-departmental collaboration, managing organisational changes brought by digital initiatives, and proactively forecasting future digital trends to ensure competitive advantage.

Understanding the landscape

Before diving into any transformation initiative, it is crucial for CFOs to have a comprehensive understanding of the digital landscape. This does not merely mean knowing the names of new technologies but understanding their functionalities, capabilities, and potential applications.

Every technology comes with its own set of implications. For instance, while machine learning can automate and optimise certain processes, it might also necessitate new training for staff or even lead to restructuring in certain departments.

Similarly, adopting cloud solutions might offer scalability and flexibility but could also introduce new cybersecurity challenges. CFOs must weigh the benefits against potential pitfalls, ensuring that the organisation is prepared for both the opportunities and challenges that come with new tech.

CFOs also play a crucial role in discerning which technological solutions align with the company’s goals and can drive tangible value. This involves analysing where inefficiencies currently exist, where competitive advantages can be carved out, and where customer experiences can be enhanced.

By pinpointing these areas, CFOs ensure that investments in technology are not just trendy but truly transformative for the business.

Fostering a culture of transformation

But it is not just in the procurement of technology that CFOs are responsible for.

While traditionally focused on financial stewardship, modern CFOs have expanded their influence to encompass broader organisational strategies and dynamics, including culture. This includes embedding a culture of digital transformation.

The deployment of new technology, or the automation of a process, often requires significant changes in workflows and roles. CFOs, with their role in change management, ensure that the cultural aspects of these changes—like employee apprehensions, training needs, and communication strategies—are addressed and effectively.

Similarly, with the rise of data analytics, AI, and other digital tools, ethical considerations around data privacy, transparency, and usage become paramount. CFOs set the tone for the ethical use of digital technologies, ensuring that the company’s culture prioritises responsible and transparent digital practices.

More within their traditional wheelhouse, there is also a risk management element. Digital transformation introduces new risks, from cybersecurity threats to technology adoption challenges.

A strong organisational culture that prioritizes security, continuous learning, and adaptability can help mitigate these risks. CFOs, understanding the link between culture and risk, work to foster a culture that supports safe and effective digital adoption.

Investing in talent

Most CFOs are now aware technology, in isolation, cannot drive transformation. It is the synergy of technology with skilled, trained and motivated human capital that truly catalyses change.

As a result, CFOs are ensuring their organisations are not only digitally equipped but also digitally competent.

One way to do this is to initiate a comprehensive skills assessment to identify gaps in the current team’s capabilities. This helps in understanding what specific training or resources are needed to bridge the gap between current competencies and the demands of new digital tools.

Sometimes, the skills required for digital transformation might not exist within the current team. In such cases, CFOs prioritise hiring new talent with specific digital expertise, be it in data analytics, artificial intelligence, or other relevant domains.

Measure and iterate

Digital transformation is an ongoing journey – perhaps not even a journey as there is unlikely to be an endpoint.

Nevertheless, CFOs must establish clear metrics to measure the success of their initiatives. ROI is an obvious starting point.

Beyond the initial investment, the total cost of ownership (TCO) considers all costs associated with the technology over its lifecycle, including maintenance, upgrades, training, and support. A lower TCO relative to the benefits suggests a more cost-effective technology deployment.

Adoption rates and how operational efficiency has changed are also useful metrics to measure. The former can indicate that the technology is user-friendly and meets the needs of the team, while the latter can be reflected in reduced processing times, fewer manual interventions, or increased automation.

By regularly reviewing these metrics, finance leaders can identify areas of improvement, iterate on their strategies, and ensure that their digital transformation efforts are driving tangible business results.

The CFO is currently conducting research into the level of digitalisation within corporate finance functions. To take part in the research, click here.

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