Four Keys to Unlocking the Value of Digital in Finance
The Hackett Group’s 2018 Best Practices Conference launched this morning (May 1) with a keynote address by a multibillion-dollar company’s CIO. This CIO shared his company’s experience in becoming a leading digital organization.
Like other companies of its size (and others), this company’s transformation was driven by the desire to stay competitive in a fast-changing business environment. The CFO, in collaboration with the CIO, identified digital enablement of business processes as a critical factor in achieving growth, agility and improving customer experience.
The first step was to reduce the overall cost of IT expense, and simplify a fractured system environment with over 15,000 applications. The effort produced 60% in IT cost savings. The dollars were applied toward investment in enterprise-wide smart technologies, including the establishment of analytics, AI and digital centers of excellence (COEs), as well growing investment in robotic process automation (RPA).
Four Key Learnings
It’s never ending. As the company began to transform its architecture, it quickly realized that its journey will never end. “Last year’s platform is this year’s pivot point,” the CIO said. Finance must realize that there’s no end-point to its digitization effort. While there may be discrete projects. A predictive model implementation. A new robot. But the process is never done as the rate of change of smart technological evolution is only accelerating.
It’s customer-centric. To be successful, digital transformation must involve multiple stakeholders. For finance that means engaging internal customers and business partners in the strategy and design of new technology initiatives.
It’s got to be measured. Finance loves numbers and digital transformation should not be a fuzzy experience. It’s important to set up measurable targets upfront. For example, a digital analytics COE can target producing analyses at half the time and the cost of existing BI solutions. Robots can be implemented to reduce cycle time by X% and eliminate errors. Etc.
It should be complemented with mass simplification. To set the stage, it’s important that finance either concurrently, or firstly, simplify its often disparate landscape of core systems and break down data silos. While ideally that may be done first, practically that’s often a process that happens alongside the adoption of new tools. The reality is that robots can transmit the wrong data at the speed of light. Lack of data integrity will corrupt advanced analytics.
Going digital is an imperative for finance organization so they can keep up with the demands of their internal customers, as they struggle to respond to the needs of their external customers. As the rate of change accelerates, the pressure on finance to become more agile is only going to increase. There are key steps finance must take to move along the never-ending journey of digital transformation.