4 Reasons CFOs Are Fast-Tracking Digital Transformation

Despite – or even because of – the economic devastation brought on by the coronavirus outbreak and its corporate earning repercussions, finance organizations are powering forward with digital transformation initiatives, and in some specific cases, even accelerating the pace of implementation. Even more indicative of the resolve to move faster, The Hackett Group’s Covid-19 Finance Poll revealed that nearly two-thirds of finance functions intend to launch new digital projects on a selective basis. Here are some reasons for digital acceleration:

1. REMOTE WORK: The transition to the virtual workplace divided the digital "haves" and have "nots." Our latest research shows that organizations further up the digital transformation curve were better able to respond to the overnight shift to the virtual workplace. It also revealed that lack of process automation was the #1 hurdle to a successful crisis response. HR respondents predict a 3X jump in the percentage of employees working from home post-crisis vs. pre-crisis. So, finance has to elevate its automation capabilities to support a potentially permanent transition to working from home.  
2. COST PRESSURES: The pandemic is exacting a heavy economic toll, and many companies are facing dire financial situations; some have reported double-digit drops in revenue for Q1, and most expect economic conditions to get worse before they get better. Therefore, CFOs have become laser-focused on enterprise and functional cost reduction. By better leveraging their existing toolkit and embracing smart automation solutions such as RPA, finance can drastically reduce its functional cost.
3. AGILITY: For most finance organizations, process automation has been primarily an efficiency play, i.e., reduce manual intervention. But in the next wave of digital transformation, the objective is as much about constructing an agile operating model to support the company through continued high levels of volatility. By reviewing the business case for existing technologies and identifying new use cases, organizations can create a flexible infrastructure in order to scale up without adding incremental cost.
4. CAPABILITIES: The Covid-19 crisis shined a spotlight on many organization’s subpar planning processes. The inability to keep up with the pace of change, combined with escalating demand for forward-looking insight, were the two biggest disruptors to finance operations as the crisis unfolded. Management demanded real-time access to internal and external data, so they can make informed decisions on how to proceed. Finance executives must respond to the demand for real time insight by improving their planning processes, automating what they can and building new capabilities, e.g., predictive analytics, into their core forecasting and planning models.

 Toward End-to-End Process Automation

 The Covid-19 crisis proved that bold and rapid change is possible, so CFOs should capitalize on their experiences – and rising IT/business commitment to digital projects – to push an even more aggressive digital agenda. Seventy-seven percent of IT respondents to our study expect to make moderate or significant increases in digital investment. Instead of looking at new technologies in isolation, e.g., what are the different use cases for RPA, finance should take a portfolio approach, i.e., looking at an end-to-end process automation and determine which technology is best suited for which part of the process. This mix-and-match approach can propel finance beyond incremental improvements toward transformative change.