The four elements of a digital culture: organizational structure; people; strategy, processes and policies; and technology are not only individually important but also interdependent. Finance leaders seeking to build a strong digital culture need to understand each element, assess current gaps in their organization and consider the following ways to strengthen each element.
How organizations are structured can enable or hinder collaboration, agility and innovation. To be adaptable, people across different functions need to be empowered in decision-making to quickly execute change. This starts with inclusive leadership, which delegates rather than controls, actively invites inputs from all organizational levels and changes accordingly. It is also important for business units to share data to provide a complete view of information for sound decision-making.
Anchor the finance function’s influence
Finance leaders are ideally positioned to define a role for themselves and a finance function that goes beyond pure compliance and reporting of finance-related data. In many cases, the CFO acts as a superconnector, drawing together the strands of activities across the entity. Financial and other data are key inputs to many other processes that require business decisions, such as procurement, supply chain, operations or risk management. Finance leaders should take a holistic view of transformation beyond finance by helping to drive digital technologies in other business processes. They should also demonstrate their value as a business partner and in turn, secure the resources and buy-in to drive a stronger digital finance function.
Simplify structure for agility
To promote agility, finance leaders can consider flattening the finance function’s hierarchy to facilitate more direct and faster feedback from employees on ways to innovate and enhance finance processes. A flatter structure and a collaborative mindset will help to foster a stronger digital culture.
Finance leaders need to recruit, harness and retain talent with the skills and motivation to complement technological innovations as well as the agility to embrace rapid change, evolving roles and new approaches.
Design a future-fit operating model
The finance function of the future is expected to evolve into a data-driven decision center. Finance professionals should focus less on generating reports and information, and more on using the available data to help support decision-making. The ideal future finance operating model should be smarter, better aligned to the business and more forward-looking and resilient. To realize its promise, finance leaders will need to rethink their talent management strategy and establish the right people management approach.
The ability to leverage data as a strategic asset is key to driving better insights for the organization. Data gurus, such as statisticians, data scientists and even behavioral scientists, will be invaluable in helping the finance function of the future to turn data into fresh perspectives and strategic insights. So is talent steeped in finance knowledge and literate in technologies, such as blockchain, artificial intelligence (AI) and predictive analytics, with prior experience in using or implementing them. To be effective business partners, finance talent must have the communication skills to convey pertinent insights to other internal stakeholders and help address strategic challenges faced by the business.
By drawing on market workforce trends and the organization’s forward-looking business plans, finance leaders can more accurately forecast the finance and digital skill sets that will be required, major gaps and how these can be addressed.
Strategy, processes and policies
Having a clear organizational strategy, followed by digital and data strategies underpinned by enhanced processes and policies, is imperative in ensuring that from the vision to execution, finance teams understand the digital transformation road map.
It is important for finance processes to be modernized for agility. Lean, effective and efficient finance processes are crucial to ensure that finance teams can continually extract value from new technologies adopted. Finance leaders can consider various levers to reengineer finance processes to fully capitalize on technological benefits: standardization, centralization, digitization, and elimination of redundant activities.