- A new joint report by ACCA and EY reflects the increasing importance of culture within the finance function, and how a strong digital culture can greatly accelerate innovation and ensure a successful transformation
- The report, launched at ACCA-EY Smart Finance series, introduces four main elements of digital culture, namely, organisational structure; people; strategy, processes and policies; and technology
A survey on over 160 finance leaders from large organisations in Singapore has revealed that more than 90 per cent of leaders view people as an organisation’s most important asset, and it is through them that digital initiatives can be driven and gaps between current and desired digital culture within their finance teams can be closed.
The survey is part of a report entitled Is digital culture the key to unlocking finance transformation?, jointly launched by Ernst & Young LLP (EY) and ACCA (the Association of Chartered Certified Accountants). It also found that having a strong digital culture with clear strategies is what sets successful digital transformation apart. This comes as more finance functions and companies start embarking on their digitalization journey in order to be future ready.
However, the report also showed that finance leaders feel that more can be done to improve their current culture, with 78 per cent of respondents agreeing that the culture of their finance teams needs to change if they are to continually engage in digital innovation and consistently seek process improvements through technology. The main barriers of having a strong digital culture, according to respondents, include a lack of frameworks and metrics to assess digital culture, a lack of clear digital strategy, finance team not being proficient in digital technologies, and too many competing priorities.
To address challenges, finance leaders are required to take multi-pronged, consistent and concerted approaches. They include introducing initiatives that enhance the various elements of digital culture within their teams, such as communicating clearly from the top on the importance of innovation as well as allowing finance staff to take on more proactive roles in the organisation and contribute to key business decisions.
Ronald Wong, Singapore Financial Accounting Advisory Services Leader and Partner, Ernst & Young LLP, said: “Culture is a topic that has been brought up and discussed extensively over the years and, in this report, we want finance teams to know that leaders recognize its importance and the success of technology implementation depends on the skills and willingness of the people using it.”
He continued: “The finance team sits at the intersection of business functions across the organisation. As such, having the right digital culture to drive the effective adoption of technology becomes an imperative in order to enable the finance team to play a unique and strategic role that drives business outcomes.”
The report introduces four main elements of digital culture: (1) Organisational Structure, (2) People, (3) Strategies, Processes and Policies, and (4) Technology. These are practical steps that finance leaders can take to drive a positive shift in digital culture.
Organisational structure can either enable or hinder collaboration, agility and innovation. For a company to be adaptive and agile, the leadership team has to step away from the traditional hierarchical organisational structure to empower people across different functions within to make decisions that will affect change.
Combining smart technologies with the brains, emotional intelligence and interpersonal skills of talented people, finance leaders need to also look at recruiting, harnessing and retaining people with skills and motivation to complement technological innovations, embracing rapid change, evolving roles and new approaches. This would include designing a future-fit finance operating model that can focus on data-driven decision-making and challenge the current skill sets of the finance talent.
The third element – strategy, processes and policies – covers the importance of having lean, effective and efficient finance processes to enable finance teams to continually extract value from new technologies adopted. And the fourth element is technology, where finance leaders need to challenge assumptions and encourage experimentation while managing risks inherent in each technical innovation. This would also mean harnessing better data and analytics through having a clear data strategy and establishing a data governance framework within the organisation.
Joseph Alfred, head of policy, ACCA Singapore, said: “In today’s digital world, organisations need to look at the innovations available for them to transform and grow. And who else to explore the opportunities than the people within the organisations themselves? This is why having a digital culture is important, to not just enable the adoption of technology but also the successful implementation of it to drive the success of the business.”
ACCA-EY Smart Finance series
The report was launched at the virtual ACCA-EY Smart Finance series earlier today. The webinar provided valuable insights from finance leaders on the challenges and drivers of building a digital culture within the organisation.
ACCA-EY Smart Finance series is part of an ACCA initiated a global programme of research and insight activities to understand the leading practices finance functions are adopting in our goal to becoming smarter as we look into the future.
Championing the cause for change, the Smart Finance programme seeks to understand and showcase good practices, challenges, issues and opportunities corporate finance functions face in working smarter in four key areas, effective finance leadership; leveraging technology; better human capital practices; effective transformation of the finance organisation.
These areas are relevant in today’s global business environment which remains disruptive and volatile, requiring finance professionals to be adaptive and innovative in order to continue contributing to organisational strategy.
Notes to Editors
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