Digital transformation is not just about implementing new technology to help digitize parts of the business. It’s about strategically using digital advances to build a set of agile and robust business processes to enable true, end-to-end business transformation.
Working in silos hampers digital transformation
What we see in many organizations today is a siloed approach to transformation. Each part of the business seems to have the same objective, but bringing them together into one cohesive business strategy often runs amiss.
According to recent research sponsored by SAP, one-fifth of all respondents indicated that their projects are isolated, despite a desire to create a unified strategy to digitize key service and business processes.
More worrisome is that only 13% of the respondents reported that they have created an integrated, long-term digital strategy and delivered programs that have transformed business processes and/or business models, and influenced markets.
One owner of digital transformation?
This topic seems to suggest that there should be one owner of digital transformation in an organization, but I disagree. I don’t believe only one person can own the whole digital strategy.
Nobody knows a business better than the business owner does. However, the business owner requires the support of the functions that it interfaces with in order to ensure true efficiency. Those who attended the first of the CFO Executive Forum breakfast series heard that not one CFO on the panel was in favor of only one owner for digital transformation.
According to SAP and CIO Australia research, “initiatives that are run in isolation to the organization’s digital strategy are more likely to run out of steam and budget, and are unlikely to be truly transforming business models and processes.”
When I participate in CFO and CIO networking events, my peers who are unsuccessful in convincing the board to plan and budget a true transformation program running across the business are living through the pain within their finance teams of a lack of data to make real-time decisions.
As more millennials are coming into the workforce, it is even more essential that finance leaders provide maximum enablement through real-time collaboration. The Financial Times recently stated that millennials appear to put a higher value on fulfillment, entrepreneurship, and a good work-life balance than cash. Organizations can enable this through advanced technology enablement and a focus on culture.
A lack of investment in enablement will simply deter millennial finance professionals from joining your organization, and even the profession in general, resulting in a widening skill-set shortage. Since this is a topic of interest and passion for me, I will delve into the millennial drive for finance in a later blog.
The SAP and CIO Australia research paper also states (and to quote my colleague Bala Subramaniam, head of Business Transformation Services at SAP ANZ): “What we see happening in the future is closer alignment of business and digital strategies, and some of the current business strategy leaders may have to become adept at digital strategy as well.”
If business strategy leaders are unable to keep up with a digital strategy, then they will not be able to make the decisions required to stay ahead of competitors, or more importantly, break into new markets or territories.
All executives need to own digital transformation
It’s clear that digital transformation will not strategically underpin a business if it is a short-term, siloed initiative. In fact, this topic should bring together executives to more openly and collaboratively take time to understand how each part of the business should integrate to operationally advance.
For the finance function, this is especially important. Information management is a great example that affects all parts of a business. The finance functions that employ people to simply compile data from multiple systems and pivot tables and publish to the business are absolutely behind in what is possible. Why not fix the systems and then utilize the same teams to actually analyze and interpret the data and come up with a new and more efficient way to go to market?
Digital transformation, and how it enables the finance function, was a key talk track at the SAP and the Australian Financial Review breakfast series. SAP’s Global Board is a prime example of successful finance transformation in practice, where the Boardroom of the Future is allowing our board to be able to make live decisions and explain our business to shareholders and analysts.
To learn more about how finance executives can empower themselves with the right tools and play a vital role in business innovation and value chain, review the SAP finance page, which offers additional research and valuable insights.