Businesses operating in the Information Age must adapt or risk losing to the competition. Whether in manufacturing, service, or finance, digital transformation is how businesses stay relevant and viable in today’s landscape.
In the field of finance, digital transformation holds great importance as handling and managing the economy’s lifeblood requires secure and accurate real-time data processing.
To help you facilitate stability and growth in your company, here is a comprehensive guide to digital transformation in the finance sector.
Advantages of Finance Digital Transformation
The digital finance transformation of a company refers to leveraging current technologies to improve the existing finance process and achieve improved organizational performance. By adopting this approach, finance leaders can expect the following benefits for their organizations:
- Reduced human error – Automating manual processes reduces the risks of clerical error or mistaken data inputs, which cost the U.S. retail economy over $46 billion in 2017.
- Increased productivity – Finance digitalization often begins with assessing existing business processes and identifying the business’s strengths, weaknesses, and opportunities. As such, bottlenecks and repetitive processes can be eliminated, reducing downtime and speeding up the finance process.
- Promote a data-driven culture – Adopting the right tools and services for your finance organization can help you access and retain important information relating to your operations and services. Ready access to data informs decisions and encourages transparency at all levels of the organization.
- Improved customer experience – Customers can access your products and financial services anytime, anywhere by bringing your business to the digital space. Conversely, it also opens up new channels to help you gain meaningful insight into your target market.
- Generate more accurate projections – In finance, knowing when to pull and push is essential for survival. By leveraging the latest technology, you can easily pull up the data you need to make informed decisions.
As newer technologies continue to emerge, the future of finance has become a race among organizations to wield available tools and services at their disposal. Better delivery of services, accurate projections, and reduced costs are among the metrics that business leaders consider when developing a digital finance transformation strategy.
Developing a Finance Digitalization Strategy
As with any other business, digitalization is a collaborative effort. You’ll need your executives to devise a plan on how the company will collectively approach this endeavor.
With the transition plan led by the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), digital transformation can roll out with full consideration of the company’s resources and capabilities.
Finance transformation can be generally divided into three sections, each addressing a general aspect of the business:
1. Business Modeling Transformation
Since digital transformation is a major overhaul of your business, making modifications to the fundamental parts of the business only stresses the scale and significance of this endeavor.
Changes to the business model can range from something specific as adding a new product or service to entirely changing how you operate. This practice is fairly common among businesses, with a 2020 survey revealing that asset management firms are looking into the adopted digitization of their services.
Of course, the main objective in making changes to the business model is to prepare the organization for the expected changes. In finance, growth opportunities remain accessible to those who adopt robust business models and consider flexible treasury options.
2. Process Transformation
After assessing the company’s overall needs, it’s time to turn your financial services digital. By understanding how every step contributes to the overall goal, you can better retrofit your business processes to meet your new goals.
Generally, modernizing processes requires significant investment in skills and equipment. You’ll also need to consider onboarding your finance teams and integrating the new tech with your legacy systems.
Transforming a process requires the following steps:
- Identifying the New Process Goals
By understanding the endpoint for an upcoming process transformation effort, you can gear all efforts toward a singular direction. Identify short and long-term goals and prepare contingencies to adapt to various scenarios.
Here is where some finance firms experience problems, especially when automation decisions are driven by fears of missing out on the competitors. Remember that every change should add value to the organization.
- Identifying the Metrics and Indicators
Ensuring the planned process changes are beneficial to the business requires establishing metrics. Implement the change in a controlled environment, gather data, and examine whether it can deliver the expected needs.
Similarly, modern technology allows businesses to study proposed changes without disrupting operations. By using artificial intelligence and machine learning tools, those in the financial services industry can make assumptions about how process changes affect the organization.
- Consultation with the Stakeholders
This part allows you to gather feedback and additional insights from the stakeholders involved in a particular finance process. Involving relevant parties in this stage aligns everyone and further accelerates the implementation and adoption of the changes.
- Implementation and Monitoring
After finally implementing the changes, the work doesn’t end just yet. You’ll need to monitor these changes, continuously looking for issues to resolve and opportunities to improve.
This part also includes the gradual rollout of the changes to the rest of the organization, onboarding team members, and introducing the necessary tech changes along the way.
3. Cultural Transformation
To fully implement the planned finance digital transformation, you’ll need to ensure that the changes planned so far will fit your company’s culture. The latest technology or management strategy is doomed to fail unless everyone in the team is on board.
Remember that failure to consider culture in a digital transformation plan could backfire against the company in various ways. It can hamper progress in adopting the new services or a finance function. Even worse, it can lead to counterproductivity and cost the company time and money.
Aside from focusing on customer experience, the CFO in digital transformation strategies should also focus on the employee experience first. For example, seeing the leadership involved in crucial parts of the transformation process raises morale and encourages active participation.
Also, appreciation and participation shouldn’t be too far behind by highlighting the benefits they can gain from the financial services digital strategy laid before them. Use data visualization tools to illustrate how this will benefit your team members, the organization as a whole, the clients, and, if possible, the industry.
4. Continued Data Gathering and Reporting
After these aspects have been met, remember that the work is far from over. Data gathering should be continuous alongside periodic and accurate reporting concerning the metrics set early in the process.
You can continue to grab every opportunity while nipping problems right from the bud by continuously monitoring and reviewing the digital transformation process.
Additionally, keeping proper communication and documentation makes sure that your organization is ready for whatever may happen during the transition.
Whether you over or underperform during the initial stages, you can easily make the necessary adjustments and scale the concerned parts of the business accordingly.
Master Your Digital Transformation
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Begin Your Digital Finance Transformation With Netsurit
Businesses often miss out on opportunities for growth for several reasons.
However, with the right partner, you can ease into a better version of your company and transform your digital landscape. It is in this part that Netsurit can help you realize your vision.
As a trusted provider of managed IT, cloud, and cybersecurity services, our team of experienced professionals can help accelerate your business’s digital transformation. With more than 23 years of experience and 250 employees on staff, we can ensure your needs are met.
To find out more, contact us today.
Featured Photo Credit: Tima Miroshnichenko