With everything going on in the world, the only consistency is change. People, and the businesses they work with, are adapting more rapidly now than ever before.
Digital transformation has the power to radically overhaul every aspect of an organization’s operations. Naturally, that includes the finance department. But because of the company-wide impact of a financial transformation, the office of the CFO plays a unique role in driving the transformation beyond its own territory.
When chief financial officers oversee a digital transformation of traditional financial tasks, tools, and practices, it affects change across even large enterprise organizations. For that reason, the office of the CFO has become an engine of transformation within organizations, helping spearhead new innovations that change the business for the better.
Curious about what those innovations look like? We’ve rounded up some of the top trends and predictions shaping financial transformation in 2020 and beyond.
Reassessing the Current Business Model
Digital transformation for the sake of transformation doesn’t benefit anyone—not your company, and not your customers. There are many benefits that can come with digital transformation, but the implementation of these changes needs to offer a clear intent and benefit to the company’s business model.
In some cases, this can go as far as ushering in a new business model altogether. Companies across every industry are using digital innovations to embrace a modern customer-centric model of doing business, which advises the use of technology to upgrade business processes in ways that improve customer service.
This isn’t to say that digital transformation shouldn’t be focused on improving internal operations such as streamlining financial consolidation, or improving your internal use of resources to create new efficiencies in how you do business. But the benefits of those changes need to be passed on to your customer base in some way, either by improving the quality of the services they receive or by passing on the savings to create a competitive advantage over your rivals.
Legacy technology and traditional modes of business don’t lend themselves to disruptive, innovative business models. As the office of the CFO helps spearhead digital transformation, it also needs to examine how that transformation creates new options for fundamentally changing the way a company does business.
Expanded Use of Automation and Machine Learning
Automation isn’t new to finance departments, but the degree to which automation is relied upon continues to rise. Cutting-edge financial software suites are using automation as much as possible to accelerate business processes, reduce errors, and free up human capital, which can then be put toward other important tasks.
This includes tools that automatically pull data from across an enterprise organization, in real time, and organize that data into easy-to-read CFO reports and CFO dashboards. Automation can also be used to consolidate financial statements; execute fast, accurate dynamic modeling; assist in tax data collection and preparation; and assist with many other services overseen by the office of the CFO.
Machine learning is an important technology to partner with these automation tools, largely because of its ability to handle complex scenarios and make the appropriate decision when conventional if-then logic is insufficient. Machine learning also expands the analytics capabilities of the office of the CFO, resulting in deeper insights into financial data collected from across the organization. These insights can then be the driver for important strategic adjustments that result in greater efficiencies and capabilities for any organization.
A Faster, Better Customer Experience
As business models shift toward a customer-centric approach, finance departments are under more pressure to oversee the transformation needed to deliver a better customer experience. Automated data collection, for example, can be used to deliver faster information and insights to customers in real time. The adoption of new business technology can provide an upgraded user interface for customers while also improving the organization’s ability to collect important data.
The office of the CFO also needs to understand the indirect impact that digital transformation can have on non-financial aspects of the customer experience.
Marketing and sales, for example, may not have their day-to-day operations significantly impacted by the digital transformation led by the finance team. But the improved flow of data and deeper, machine learning-driven insights generated by financial analytics could offer guidance on how marketing and sales can improve their customer engagement to deliver a better customer experience—which could result in higher conversion rates and better customer retention rates.
Increased Cross-Team Collaboration
Few departments within an organization can access a company-wide view of department-specific performance. Marketing, human resources, IT, and other departments operate largely within their own silos.
Finance is in a different situation: Because every department’s performance is reflected in financial data, CFO dashboard metrics can offer a fairly comprehensive view into the health and success of those respective departments. As a result, the office of the CFO can have a central role in identifying necessary strategic shifts. It can also help mobilize cross-functional teams that can be assigned to specific tasks and initiatives arising from the insights pulled from this financial data.
The Rise of Self-Service Analytics
Self-service analytics is becoming a highly sought trend among CFOs who are looking to get more value from their financial data. It’s also an engine for faster insights, which drive faster changes and greater agility within an organization.
A self-service analytics tool allows CFOs and other authorized users to quickly perform finance-related analysis without calling on IT—or, worse, having to wait on IT to be available for this task.
Typically, the request to an IT professional or report developer can take one business day to be received and responded to. Then it can take several days, and in some cases two weeks or longer, to collect the right data, build a report, validate that information, and produce an analysis. But self-service analytics allows data collection, report building, and validation to take place almost instantaneously, giving CFOs the speed and performance they’re looking to enable throughout their companies.
These self-service platforms offer a simple user interface that any finance professional can use, and they make it easy to leverage financial data from the rest of your financial software suite, resulting in deep insights and advanced visualizations that can be created and utilized on the fly.
Reduced Dependence on IT
Self-service analytics is one way finance departments can reduce their reliance on IT. But it’s not the only way. As CFOs implement more modern financial software that makes use of automation to deliver real-time information and eliminate manual processes, finance teams are able to operate with greater independence within their companies—which keeps workflows moving quickly and increases productivity for the entire office.
CFO reports and CFO dashboards offer quality tech services that once couldn’t be accomplished without help from IT teams. Instead, IT can focus its efforts on more pressing needs within the organization, while finance departments use their powerful new tools to achieve more than ever before.
When implemented correctly, digital transformation allows the office of the CFO to rethink its current strategies and implement upgraded approaches to conventional, if inefficient, business practices. This value-added approach to innovation ultimately helps enterprise organizations identify and fix operational problems they didn’t even know existed.
CFOs want a future built on fast performance, accelerated development, and up-to-date, insightful information to guide strategic decision-making. Learn more about how insightsoftware supports this digital transformation by requesting a demo of Longview Analytics.