The following is a contributed article from Jason Lin, CFO of Centage Corporation.
Companies are in the midst of profound changes. Digital transformation — defined as a foundational change to the way companies deliver value to their customers — has become table stakes to compete in today's market. It's no surprise that, per a 2018 Gartner survey, 62% of CEOs have a formal management initiative to make their businesses more digital, and 47% are challenged to put such an initiative in place by their board.
As a CFO, you play a critical role in helping your company succeed in its digital transformation. It's up to you to obtain a big picture of your operations and customer touch points to identify synergies and drive value. It's impossible to assess — and ultimately benefit from — a digital transformation without the financial component that you oversee. Which technology investments will drive efficiency, customer value and profitability? This is the role of your team.
Technology selection is key
Digital transformations have complicated the decision-making process, especially when it comes to selecting the technology your company uses. When an entire organization is digitally connected, the technology selected by one department has wide-reaching impact, which is why cross-functional teams should be organized to help make those decisions. When assessing solutions, these teams need to identify the goals they want to accomplish and assess how the solutions will affect others in the organization. Will they create unforeseen problems or extra work elsewhere in the company?
Earlier this year, my company launched a platform for its customers, the design of which was driven by people representing engineering, sales, marketing, customer care and finance, all acting as equal stakeholders. This cross-functional team helped ensure we covered all bases and we delivered a platform that would ultimately be profitable.
Financial teams should consider taking a similar approach when looking at technology solutions. If the goal of digital transformation is to enable your team to help business managers make better decisions and to spot synergies and anomalies faster, then you'll need to transform static budgets into robust real-time plans. Line items — the cost of troubleshooting platform bugs encountered by customers — are no longer merely expenses to track, but critical business drivers that are highly relevant to the organization.
Transformational technology is collaborative
What should your finance team look for in transformational technology? First and foremost, it should look for collaborative management platforms that can collect data from all sources — enterprise resource planning, client relationship management, general ledger, operations, customer care — in real time. This is essential. If your customer care is experiencing an uptick in tickets for issues relating to your new platform, the root cause must be identified and addressed immediately to drive value to the customer and maintain profitability. The benefit of a collaborative platform is that it will proactively pull information from individual data sources and feed it into the plan 24/7. Contributors — sales, customer care, operations — don't need to take the time to provide finance with their data. It happens automatically.
A hugely beneficial outcome of digital transformation is the ability to identify emerging customer needs and respond to them before the competition is even aware a new opportunity has arisen. It's no surprise that data visualization is a hot trend, and the advances are significant. Today's dashboards allow the finance team to overlay multiple data sources in many ways, based on what the user wants to know. They're useful tools for spotting emerging trends that gain you a competitive advantage. And, they can help spot early warnings that your company is at risk of losing ground to a competitor.
AI is on the way
Artificial intelligence and machine learning are also coming to the finance department and will be deployed in a wide array of use cases. Supervised machine learning will be incredibly useful in automating compliance and flagging transactions that are in violation of standard accounting practices. I speak with a lot of CFOs who tell me transactional work takes up too much of their team's time. What they really want is more time to dig deep into the business itself and serve as advisers to customer-facing teams. AI will help them do that and increase their accuracy.
These are just a few of the technologies you should be aware of as you guide your company through its digital transformation.