In a recent webinar, three subject matter experts from Vaco and MorganFranklin Consulting shared their knowledge and insight on how to fuel growth and transform accounting and finance through digital enablement. The following is a recap of the presentation and reflection of the presenters’ research and opinions.
In their Trends in Transformation 2022 industry report, MorganFranklin Consulting and Vaco surveyed more than 160 leaders across a diverse range of industries, including technology, financial services and healthcare, to learn how they are approaching transformation in 2022.
A staggering 91% of these leaders, regardless of industry, said either automating processes or streamlining manual data and reporting are top cost-cutting priorities for their organization in 2022. However, many of the same leaders cited resource constraints and the continuing effects of COVID-19 as leading impediments to their transformation efforts.
The question is, how can accounting and finance leaders break through constraints and keep their transformation efforts on track throughout the year?
Jerrad Hall, partner for finance transformation at Vaco; Sean Hanley, managing director for finance transformation at MorganFranklin Consulting; and Fred Hargrove, managing director for information management and technology at MorganFranklin Consulting, answered this question and many more during a recent webinar on digital enablement.
The panel shared their comprehensive thoughts and insight that accounting and finance leaders can use to form a five-step digital transformation plan—starting with defining digital and financial transformation in clear terms.
Step 1: Define digital and financial transformation
Hall began by sharing one of the more commonly cited definitions of digital transformation from George Westerman, a principal research scientist at MIT, who said digital transformation is a radical rethinking of how an organization uses technology, people, and process to fundamentally change business performance.
In other words, taking a finance-first approach to transformation.
Hargrove said that, in his experience, many of his clients view financial transformation as a way to achieve:
- Improved collaboration
- Automated and standardized transactions
- Utilization of the right financial systems
- Actionable insight based on real-time information
But, before companies can achieve anything, the panel said they may need to shift the roles of their accounting and finance leaders first.
Step 2: Evolve accounting and finance leadership roles
Hanley noted how the expectations for the CFO, as well as for the whole finance group, have changed—from merely keeping score to adding value to the organization. He added that many now view the CFO as more of a co-pilot, rather than just a supporting actor.
However, Hall mentioned a survey that found only 10% of CFOs say their finance teams have the skills needed to support the organization’s digital ambitions.
“We should take this as a wake-up call and really hone in and focus on the idea that we need to do better in supporting CFOs as they support the CEOs and run the business,” Hall said.
Unfortunately, as the panel noted, knowledge gaps aren’t the only emerging threats affecting accounting and finance leaders.
Step 3: Identify potential roadblocks
The panel mentioned four specific threats that make transformation difficult:
- The ongoing COVID-19 pandemic: Hall said rapidly changing consumer behaviors, the unstable economy and the uncertainty of projects actually served as an accelerant for digital transformation. However, businesses are still trying to figure out how to leverage the change and uncertainty of the ongoing pandemic into a way to get ahead, rather than trying to catch up to where they have to be.
- The talent shortage (and gap): The pandemic is continuing to cause a shortage of qualified resources. According to the Trends in Transformation 2022 report, 49% of business leaders said their biggest impediment to success was a shortage of qualified resources. Hall said a decline in the number of qualified CPAs, as well as the shifting expectations and desires among the workforce, are two contributing factors to the shortage.
- Supply chain disruption: According to Hanley, finance plays a big role in helping businesses overcome supply chain disruptions. He said CFOs need to think about how to mitigate a single point of failure for sourcing services or products, and should also consider continuous improvement provisions in their contracts with different providers.
- Cyber-risk management: Hanley said it’s important for businesses to identify an appropriate level of support to protect them from increasingly pervasive cyberattacks, especially ransomware. He cited two reports that showed cyberattacks against corporate networks increased by 50% in 2021, and ransomware attacks nearly doubled last year.
Step 4: Outline opportunities for automation
In the Trends in Transformation 2022 report, 60% of finance leaders said process automation (which includes purpose-built automation, machine learning and intelligent automation) is a top strategy for reducing costs in their organizations.
Hall mentioned several ways in which automation can transform operational performance, including:
- Minimizing unnecessary service calls, managing supply levels, and detecting issues before they affect an organization
- Providing much-needed business insights through real-time data retrieval and analysis
- Revolutionizing customer service through around-the-clock support solutions
- Improving employee satisfaction by automating routine tasks and streamlining project management
“It’s very fulfilling to remove mundane and routine, paper-based, process-based work in favor of analytical work,” said Hall. “This helps employers transition from being an employer of necessity to becoming an employer of choice.”
Step 5: Maintain the proper mindset for transformation
For the final step, Hargrove said it’s crucial for leaders to execute the following if they want to navigate the transformation journey successfully:
- Establish the vision: Leaders need to understand what they’re trying to achieve and what impact they want to make. Hargrove also said leaders should “dream big, but be realistic” when establishing their vision.
- Turn vision into strategy: According to Hargrove, leaders should think about what they need from a people perspective, a process perspective, and a technology perspective to bring their vision to life. Then, keeping the end user in mind, map the priorities and initiatives of the vision to a strategy.
- Build the roadmap: Prioritization is the key to building a roadmap that leads to success. Hargrove said leaders must prioritize what they want to accomplish in the short-term and identify projects that will work as long-term goals.
- Involve the team: Hargrove said it’s much easier to accomplish transformation when everyone on the team is engaged and has input. This ensures accountability and discipline that will help the team stay focused and not lose sight of the end goal.
The panel acknowledged the difficulty of this process, and said the hardest part is simply getting started. But, according to Hanley, just the act of getting the team to the starting line is huge.
“It takes a lot of effort,” Hanley said. “It takes building a business case and it takes stakeholder engagement. To me, it’s worth recognizing how big of a step that is.”
Want to see the full presentation? Watch it on-demand today:
If you need help getting to the digital transformation starting line, Vaco and MorganFranklin Consulting are with you all the way, with the knowledge, tools, and resources you need to make your digital transformation vision a reality.
Learn more about Vaco’s finance transformation solutions.