It seems just about every analyst report and trade magazine you read these days is hammering home the same message to CFOs: It’s time to rethink finance. In the industry’s enthusiasm and cheerleading for new technology, it can sometimes feel a bit like digital peer pressure in the transformation stakes. It is indeed a race, but there is not a single route to success.
It’s time to rethink finance, yes; the world is going digital, yes; new business models are emerging all around us; and yes, there are powerful new technology platforms to manage our time and save us money.
As CFOs, we have a duty to nurture and invest in growth. We still need to keep a watchful eye on the savings we are delivering in our core processes that help make this growth possible. I regularly speak with CFOs who tell me their organizations are not ready to jump into the deep end (or in some cases even the shallow end) of the digital transformation pool. Not everyone is ready to centralize all their processes or adopt a shared services approach. And that’s OK. There’s more than one road to efficiency.
Don’t get me wrong: centralization can bring a myriad of benefits, but it’s not required for all levels of efficiency savings. Technology can bring efficiency gains in different ways, depending on the size, culture, and pace of your organization. Depending on the company’s individual structure and culture, some companies may prefer to streamline savings and identify efficiencies through common tools, processes, and standardized data sets rather than centralizing and adopting shared services.
It may be as simple as standardizing technology in core activities, such as business planning and reporting, or procure-to-pay services. You’re still decentralized, but more efficiently decentralized. My point is that you must establish a foundation for efficiency savings in your finance operations that best fits your organization.
I do believe that our CFO function as a whole will continue the transition away from labor-intensive, transaction-based activities to value-added business partnering. Agility, interconnectivity, digitization, automation, simplification, and process harmonization will all play their part in each of our respective transformation journeys.
For some, this will include nothing short of a radical automation of centralized back-office processes and new engagement models with business partners. For others, it may start with simply improving efficiency, accuracy, and collaboration through common systems. No single model will fit everyone, so focus on the savings and systems that best fit you and don’t be afraid of change.
More information on the evolution of digital capabilities in finance can be found here.