Impact on Financial Departments

Digital Transformation

How Does Digital Transformation Impact Finance Departments?

In many cases, finance is at the heart of company’s digital transformation strategy. Forces inside the company, or from outside, push towards better communication, automation and process improvements and technology answers the call. As organizations transform, the role of the finance group does as well, notes Jason Mackay, General Manager, SoftwareONE Canada. “Through digital transformation, finance is becoming able to eliminate a lot of human intervention in processes, freeing up the capital needed to fuel organization’s innovation.” We spoke with Jens Schmidt, Executive Director of Finance for SoftwareONE about the impact of digital transformation on finance teams and the evolving role they are playing in their companies.

Q: How is digital transformation impacting financial organizations?

It has impacted us significantly in so many areas, and in a very short time. It started with the basic communications. Even five years ago it was standard to sit in one room to have a meeting, but now it doesn’t matter. Skype, voice, video, it doesn’t matter, and it is so much easier to communicate globally. My team immediately started to spread out globally to address the global nature of our business.

Another impact is that of access to information. Five years ago, you needed to be in your office to have access to data from that quarter. Now it can be anywhere. It’s on your cellphone, your desktop, laptop, or any computer through the corporate OneDrive. Again, this affects not just where you work, but how you work. It’s been interesting to see it happen.

We’ve been moving to a new office and we got rid of nearly all binders — huge quantities of paper. In the past we cut down an entire forest in papers, now this has completely gone away. We’ve changed the way we send and receive invoices, business-to-business processes are automatically processed on the client system, purchase orders are automatically put into the system. A lot of manual work has gone away.

Q: How do those changes affect the business beyond the financial team?

First off, globalization; I can build a team which is both global in location and perspective locating the best talent without the restriction of location. There is so much access to talent, and through innovations in technology, meeting face to face is as easy as a Skype call reducing the costs and impact to productivity related to travel.

Retention improves, because I have moms and dads who work for me. I don’t care if they are in the office or working at home with their kids. I know I can reach them, and they have access to the data they need.

Finally, automation speeds up the process. If processes get faster, then you can deliver better service to the customer. Of course, from a financial perspective, if you speed up your entire process, you get money earlier and that’s a huge advantage. The second huge advantage of automation is that it eliminates human error. When someone must key in from a sheet of paper errors inevitably happen.

Q: Does the financial organization play a role in enabling digital transformation?

We must shift our focus away from the manual day-to-day, and free up our time to do things differently. We need to learn to use the vast amount of data available and BI (business intelligence) tools. We need to use the tools to get a different understanding of the company, processes and identify trends sooner.

A good example happened at SoftwareONE recently. We tried to estimate when customers were paying us. There’s always some difference between contractual terms and actual payment. We used big data and analysis and were able to gain more accurate estimates. So, we can then improve cash flow. This is a new way of working in finance. It’s a new whay of working with these assets — data, customers and business information — that was not available when using binders and paper. And to bring actionable information to the leadership team.

And we can see patterns. If I run numbers on a sheet of paper it’s almost worthless, but electronically I can combine numbers to find valuable insights.

The movement towards digital transformation often starts in finance. Outside requests from partners and customers come and the financial team brings that request to IT to support it. So, the driver is often finance, and that’s happening worldwide.

What is interesting is that it’s often not the companies that you’d expect that have gone completely digital. If digital transformation is not being driven by finance, then they are always a big part in recommending it.

Q: What are the challenges companies engaging in digital transformation face?

I wouldn’t say it’s a challenge, but you have so many possibilities now. It isn’t just going out and buying hardware anymore. Cloud opens up all these possibilities, and now as a finance team, and as a company, you need to choose what’s best.

You must have someone who can review these options — is this option better, or is that option better — and that’s where finance steps in, using big data and strategic analysis. And there is more time to make strategic decisions, because automation has freed it up.

Q: Do finance teams need to change their mindset in some way to embrace this more strategic role?

It is pretty clear to me that a dedicated part of the finance team needs to be able to read data in a new way. There is just so much of it, so much customer data and so many data points. We need to make use of this asset, so we can make predictions.

We can make so many good things out of this massive amount of data. It’s just amazing and we are at the very beginning of what is possible. This must be the focus of every finance team over the next few years.

Why SoftwareONE when it Comes to Digital Transformation?

Our goal is to inspire customers with possibilities and opportunities for their Digital Transformation, by addressing key customer priorities.

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