Every industry has some great examples of the impact of digitization in reinventing their business models or processes.
- Population is increasing in urban areas, and many city dwellers don’t want to own vehicles. So automotive companies are transforming to provide means of mobility, offering ride sharing, car sharing, and rentals. Watch video.
- Infrastructure demands are expected to skyrocket in line with population increases. Construction companies will need to industrialize construction, seamlessly connecting construction assets, suppliers, and contractors. Watch video.
- Retailers are driving to a “segment of one” to create compelling, personalized experiences. Wearable technology can help predict customer needs and make recommendations based on customer profiles. Watch video.
These are just a few examples of many in every industry. One thing they all have in common is the need for a digital core with digital finance capabilities.
Digital finance
A digital finance organization is all about cycle time, real-time reactions to events, and constant innovation, according to Thack Brown, GM and global head of Line of Business Finance at SAP. He introduces SAP’s point of view in the white paper Digital Finance: Transforming Finance for the Digital Economy. It discusses how technology can help finance organizations completely reinvent how they work in the digital era. Arlen Shenkman, SAP CFO North America, gave his perspective in a discussion with Financial Executives International Daily about how digital CFOs need to stay attuned to new technology to help them change their business.
Digital finance organizations need to have a single source of truth that supports greater integration and collaboration between teams, enterprises, and customers. None of the business examples above would be possible with disconnected processes or data. A single, real-time version of the truth on a flexible platform is at the heart of any digital enterprise. Finance organizations need to be able to easily model, introduce, and scale new business models and integrate acquisitions. They need business processes and business intelligence together in a single, smooth digital motion. As in the retail example above, dynamic planning and modeling are important, leveraging new predictive capabilities. As in the case of the construction companies, automation and efficiency will be critical to support growth. Technology enables close collaboration with the ecosystem to process and analyze increasing volumes of information from connection with suppliers, assets, and contractors
The new normal: volatility, uncertainty, regulatory dynamics
Finance executives expect to focus more on optimizing business performance and more strategic activities and spend less time on compliance and basic tasks. But volatility and uncertainty is their new normal, coupled with increased regulatory scrutiny, which demands more granular detail. To keep pace with the increasing volume of real-time transactions, organizations need compliance and fraud detection to be embedded in processes. New regulations such as IFRS15 and ASC 606 are being introduced and must be addressed. Commodity price fluctuations, currency swings, and global events quickly impact businesses. Companies that have “live” visibility and can respond immediately are in the strongest position. Finance organizations need to evolve to provide holistic risk management across all dimensions.
This is an exciting time for finance organizations. The CFO Report: Thriving in the Digital Economy shows how many finance professionals see increasing responsibilities and the opportunity to lead digital transformation and reimagine everything. SAP’s vision is to provide the platform and tools for finance organizations to do just that.
To find out more on how digital finance capabilities can be the heart of your business, join us at the Finance Excellence Forum, Newtown Square, Penn., October 11-12. Talk to peers, thought leaders, and SAP experts about digital finance.
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This article was originally published in the Digitalist.
