Why Finance must meet the demands of a Digital Economy
Digital is a top of mind issue for many executives, including finance. This was highlighted at the Davos Conference in January 2016, where Digital was a key theme. During the conference, business leaders such as Pierre Nanterme, the CEO of Accenture argued that Digital Disruption has only just begun. Nanterme believes digital will be so much more than just a commercial opportunity. He predicts that saving lives, creating jobs and better stewardship of the environment will also be direct outcomes. In another Davos session Dominic Barton, Global managing director of McKinsey & Company asks “How can companies catch the digital wave” He points out that disruptive new players are having a massive impact on markets and technology is enabling disruption by lowering the cost of entry. Thack Brown, general manager and global head for SAP’s Line of Business Finance, and Henner Schliebs, SAP VP and head of Finance Audience Marketing agree. “We are at the outset of a once-in-a-generation wave of innovation and transformation.” they write in a SAPinsider Article. “Enterprises at the forefront of the digital revolution are reimagining traditional processes and beliefs about the role of the finance organization” the article continues.Technology Innovation has Removed Barriers
So how will the Digital Economy impact finance organizations? Finance is the backbone of every process, yet still has a large number of manual processes. If finance is no longer limited by technology, then processes can be re-imagined. This means finance processes can be designed to meet business needs, not just accommodate what the technology allows. This could be a daily soft close, weekly or continuous planning processes or touchless invoices.
Lets not overlook that existing processes can be automated right now. Leveraging business networks will help remove media breaks and many manual tasks. Recent McKinsey research agrees stating that in most jobs, not only finance 30% of current tasks could be automated. Increasing the level of automation will help finance organizations to focus on innovation and delivering insight. I discussed this in more detail previously in an earlier blog 5 Strategies Being Used to Reimagine Finance
Don’t Forget the People
Yet the digital revolution is not only about technology, it also about people and skills. Bruno Berthon, Managing Director, Digital Strategy, Accenture Strategy raises this point in a re/code article. He states that it is a myth that all that is needed is greater technology investment. To realize all potential benefits there has to be focus on the skills needed to apply the technology. This is particularly relevant in finance organizations. Finance professionals are looking to be more strategic and expand responsibilities. Business partners are asking them for more detailed analysis and insight. This requires the technology to provide real time data, but also for them to be able to analyze, present options and influence decisions
All this is happening at an unprecedented rate. Cloud solutions, business networks and platforms mean that implementations are happening faster than ever and at lower cost, and this is set to continue. Each company will have a different journey to a digital business, and it is often an incremental journey. They need the flexibility choose the right approach for their business needs, be it a new implementation, integration, or migration scenario. However there are many resources such as the SAP S/4HANA Finance Journey Map, which outlines how to manage finance transformation and how to drive quick time-to-value. Brown and Schliebs conclude in the insider article that “With more than 2,000 customers choosing SAP S/4HANA Finance, it is the fastest growing product in SAP’s history and the platform of choice for finance organizations around the world looking to transform themselves for the digital economy”
So it will be no surprise to hear that Digital Transformation will be front and center at the SAP Insider Financials 2016 and GRC 2016. Come and join us to discuss how finance can meet the demands of the digital economy and how you can help your companies people, processes and systems be ready. The co-located events will take place from March 15 to 18 at the MGM Grand in Las Vegas.