You have never adopted technology this fast before and you will never adopt technology this slowly again.
Digital adoption has been accelerating and will continue to do so at an exponential rate. Finance organizations aren’t merely seeking to become more efficient and productive — they’re looking to transform and adapt to shifting marketplace pressures, and expand and compete in new markets.
By harnessing new and emerging technologies, companies can more readily respond to — if not anticipate — changing customer expectations and behaviors, driven by digital natives. Whether an organization should adopt new and emerging technologies will no longer be the question. Instead, executives will ask how quickly the technologies can be adopted — or risk being left behind.
Consider these statistics:
- 90% of companies are prioritizing an increase in capital allocation toward digital transformation1
- 95% of finance leaders in the US (and 72% globally) say artificial intelligence (AI) will be vital for the finance function of the future1
- 24% of finance leaders say blockchain will be the function’s most important technology in five years2
- 75% of organizations are likely to make considerable investments in the Internet of Things and app- and web-enabled markets1
- 73% of organizations are likely to make considerable investments in machine learning1
- 58% of organizations are likely to make considerable investments in augmented virtual reality1
As digital technologies become ingrained in every function, organizations will undergo dramatic changes. These include:
1. Focusing on creating value instead of cutting costs
The automation of transactional and some operational activities will, by default, address the challenges surrounding cost, productivity and efficiency that most organizational transformations have focused on to date. Consequently, automation will provide opportunities for organizations to devote more time and energy to their core value drivers and ways they can continuously innovate to create value.
2. Creating smaller, flatter and more “superfluid” organizations
Many organizations’ structures and operating models have not changed all that much even as the world outside their four walls has evolved faster and faster. Too often, digital initiatives are conducted within outdated organizational frameworks. But superimposing 21st-century technologies over those 20th-century structures and ways of working will be a recipe for suboptimal results, even failure.
To become as fast-moving as the markets, organizations must be flexible enough to operate with as little friction as possible, which, in turn, puts them in a better position to create value. Organizations will have to embrace a leaner, flatter, “superfluid” structure that can adapt effortlessly to shifts in the market, much like a gig economy start-up.
3. Procuring support through a managed services model
Most support function activities can be obtained through managed services providers, enabling the sort of nimbleness, core capability and value-driver focus described above. For example, by procuring finance services through a managed services provider, the organization will gain access to:
- The latest emerging technologies and enterprise resource planning (ERP) platforms, and the knowledge that supports them, at a much lower investment than building them in-house
- The right skills to deal with unexpected challenges, such as fast-changing regulatory and legal requirements
4. Building digital confidence — and trust
In a rapidly evolving landscape, with increasingly complex threats and growing volumes of data to analyze, it will be more important to build and maintain stakeholder trust — a key competitive differentiator. However, in the digital age, digital technologies can compromise trust just as easily as they can build it.
Risk management cannot be treated as an afterthought, especially in a leaner, flatter organization. It must be forward-looking, efficient and agile. Risk should be a key strategic division that is present at the boardroom table and, potentially, embedded within agile teams leading innovation or transformation projects. Real-time intelligence is required to quickly anticipate risks and embrace disruption with confidence — enabling dynamic decision-making that drives business outcomes and maintains trust.
5. Addressing the need for new capabilities and competencies
Automation will make certain tasks and jobs redundant, result in the re-bundling of work tasks into new jobs or create entirely new tasks and jobs that require new competencies and capabilities.
Finance leaders will have to answer such questions as:
- If financial information becomes available on demand through self-service, and audit gets outsourced to a managed-services provider, what else can we do with our reporting analysts and auditors so they can continue to add value?
- Do we have consulting capabilities so we can deliver on the promise of value creation and innovation?
- What new roles, competencies and capabilities do we need to function effectively in the future?