When you’re thinking about how a business could work better to deliver services or products to its customers, what do you start with? When talking to business leaders across all industry sectors, I’ve found that there are certain areas of business where the focus tends first to be on systems and processes, and finance is usually at the top of that list. If that sounds like your organisation, and there are plans to digitally transform the business I have something very important to say to you. Successful digital transformation of a business is, first and foremost, about people – your customers and your employees.
Finance departments have historically, relied on process – and effective, secure processes of course remain vital – but new and emerging digital technologies offer opportunities to further automate many tasks, freeing up your talented teams to use their expertise in more creative and innovative ways, to the benefit of the business.
As an internationally recognised keynote speaker, trainer and coach on digital leadership, I’m often asked to speak on the business stage – like my recent Future of Work seminar that I delivered at RTI International in the US.
In my talk, I demystified how online customers think, and introduced my digital leadership methodology which is designed to empower business leaders to build a stronger organisation and more engaged community in a digital environment.
In this article I’ll be focussing on digital transformation, and sharing some insights into how Finance leaders need to be thinking about the future of work in their organisations.
I’ll look at:
- The talents to look for in future digital finance leaders
- Why you need to transform, not change
- Focussing on people, not process
- Digital technologies finance leaders should be looking at now
1. THE TALENTS TO LOOK FOR IN FUTURE DIGITAL LEADERS
As with any business transformation, in order to maximise the potential for digital transformation in finance areas, strong, capable and future-facing leadership is key. So recruiting, promoting and developing the right talent in the right roles is essential. As Finance leaders, what should you be looking for in recruiting to or developing your workforce?
Organisations upgrading their workforce in readiness for taking advantage of the opportunities offered by digital are placing a high value on people with relationship and analytical skills, who can also understand the business objectives and customer preferences. Key talents include:
Leadership: people focussed on the future rather than fixated on old ways of doing things, and able to develop a clear roadmap.
According to McKinsey, many CFOs are not at the centre of digital transformation efforts, even though much of the data needed is ‘owned’ by their departments. CFOs of the future will be central to digital initiatives and ways of applying new technologies to finance tasks in order to enable the use of business critical data in driving customer engagement and business growth.
Culture: people open to experimentation and innovation in business, able to step outside a process-driven comfort zone.
Effective digital leaders, as well as embracing concepts like agile development and minimum viable products, create an environment where people are encouraged to experiment, and supported to try out new and innovative ideas. Yet many CFOs report being unsure where to begin a digital transformation process – rapid change in technology combined with lack of skills and expertise create stumbling blocks.
Skills: Technological savviness combined with business understanding is needed to help drive the business agenda.
Recruiting top tech talent into finance areas is only part of the puzzle. CFOs who collaborate across business functions will be able to identify the tasks and processes that would most benefit from digitisation. The ability to process large data sets relating to sales, order fulfilment, supply chain, customer demand and business performance -makes finance teams the ideal gatekeepers for the business intelligence needed to generate forecasts and support senior leaders’ in making strategic plans.
Engagement: a willingness to learn, grow, and innovate, in a workplace ready to welcome Millennials and Generation Z
In order to understand what they’re looking for in a product or service, businesses need to connect better with customer needs; and data held by finance departments holds much of that information. So finance teams need talent able to look beyond tasks and processes, to understand what that data is capable of revealing to them, and to share it across the company. And in order to attract that talent, leadership needs to create a workplace which meets the needs of the next generations of workers.
2. WHY YOU NEED TO TRANSFORM, NOT CHANGE
The way that customers (and employees) engage with businesses is not merely evolving – we’re in a period of revolution, and technological advances are coming thick and fast. To get ahead of the curve, or even just to keep pace, successful businesses of the future will be those that have looked several steps ahead, rather than simply tweaking their processes.
Change focusses on past ways of doing things, and remains vulnerable to disruptive innovations in the market. Transformation, on the other hand, creates and drives that disruption, using new business models and values to put an organisation at the forefront of new ideas and establish a stronger market position.
3. FOCUSSING ON PEOPLE, NOT PROCESS
In my training for digital leaders I like to use this simple acronym:
P Position yourself as a digital leader
E Evolve your technical skills,
O take Ownership of community,
P Promote what you are doing,
L Love what you do,
E Engage offline to online to humanise the technology
Changes in the workplace almost inevitably create a risk of employee disengagement and decreased productivity, as many people are fearful of change, and without strong leadership and engagement this can lead to a reduction in profitability, and, potentially, failure. Successful digital transformation resulting in a customer focussed, future-facing organisation has to start with people.
If your departmental culture isn’t working now, the transformation process gives you an opportunity to fix that. Engaging your teams so that they embrace cultural change, and feel involved in driving it, it essential. Engaged and enthusiastic people are less likely to perceive transformation as a threat to their current employment, and are more likely to reveal or develop previously under utilised skills.
Understanding the needs of your employees as well as your customers must drive any business transformation. To meet those needs, you may need to radically review finance department structure and roles, and allow understanding of those needs working to drive your internal processes.
4. DIGITAL TECHNOLOGIES FINANCE LEADERS SHOULD BE LOOKING AT NOW
Let’s look at some tools and areas of technology that experts believe show promise for use in finance. Some focus specifically on updating core systems and existing capabilities, whilst others are designed to deliver new and different capabilities. Used together, they form a toolset finance leaders could use to improve performance.
It’s important to remember not to confuse jobs with tasks. When looking at which new technologies could work for an organisation, successful leaders focus on optimising the combination of human and automated work to make the most of human skills that their workforce possesses. Tasks can be automated, to free up people to innovate.
McKinsey have identified four broad areas of technology for reshaping the finance function.
Let’s look at some particular areas:
- Cloud. Cloud computing uses scalable, elastic technology to deliver services over the internet. Instead of making large investments in systems and software, finance departments can get the full stack of finance functionality “as-a-service,” delivered through public, private, or hybrid clouds.
- Process robotics. Automating transaction processing and communication across multiple technology systems, robots perform recurring processes with less risk of error and fatigue.
- Visualisation. Using images and interactive technology to explore large, high-density data sets and offer rich graphics, interactivity, and usability.
- Advanced analytics. Analytics has long been part of the finance arsenal, but new techniques are helping businesses analyse big data to provide more insightful answers.
- Artificial intelligence. Artificial intelligence (AI) simulates human thinking and includes machine learning, natural language processing, speech recognition, and computer vision. I talk more about artificial intelligence here.
- In-memory computing. In-memory computing refers to storing data in main memory to get faster response times. And because the data is compressed, storage requirements are reduced. The result? Speed and access to quantities of data that were previously unimaginable.
- Blockchain. Blockchain is an ingenious use of technology which allows digital information to be distributed but not copied, making it secure and virtually incorruptible.
- If you’d like to read more about digital technology in finance, Deloitte has published an extensive piece of research, Crunch Time: Finance in a Digital World, based on research with finance executives and interviews with CFOs of global businesses.
FIND OUT MORE ABOUT KEY ELEMENTS OF DIGITAL TRANSFORMATION FOR FINANCE LEADERS
In my 3-day Digital Transformation and Innovation course, I focus on helping business leaders to navigate innovation in the digital age to maximise growth opportunities and overcome potential challenges and threats. The course sessions cover the essentials needed for future digital leadership:
- Emerging technology
- Future of work
- Upskilling your workforce
- Digital leadership
- Digital Governance
In each session, I share the latest innovative technology trends in order to help you develop new digital leadership skills and understand more about the future of work. You can read more about aspects of becoming an effective digital leader and find out more about the CMI Level 7 Digital Transformation and Innovation course here