Business leaders have long recognised the world is changing and that emerging technologies such as artificial intelligence (AI), robotic process automation (RPA) and predictive analysis that fall within the scope of what’s generally referred to as digital transformation will probably have to start being taken seriously – sooner or later.
In South Africa, the changes wrought by the pandemic have contributed to a deepening of the country’s already serious economic malaise. By mid-September, the Reserve Bank revised its outlook for the year downward to a dismal contraction of 8.2% from July’s 7.3%. However, other forecasts have been even more pessimistic – the Organisation for Economic Co-operation and Development, for example, predicted that South Africa’s GDP would shrink 11.5% by year-end.
As a result, local senior financial decision-makers in organisations large and small are finding themselves at the forefront of having to help steer their businesses through the twin perils of economic recession and COVID-19 induced challenges.
A recent survey of over 300 senior South African financial decision-makers undertaken after the coronavirus pandemic hit, revealed that while overall transformation strategy is driven by the CEO, the majority (90%) of respondents said they were playing a key role in digital strategy. Fifteen percent indicated they were fully responsible for the shift.
It’s clear the entire finance function is core to business strategy, with many CFOs and financial decision-makers having to play a role their academic studies have barely prepared them for.
They are, for example, having to manage their team’s productivity remotely, deal with fraud and cyber security risks, modernise business processes with technology, stay abreast of and deal with changing regulatory requirements, and deal with a changing work environment in which automation threatens their traditional role of “managing the books”. This change is largely being driven by digital transformation.
However, the following eight tips, as provided by Gerhard Hartman, VP, Medium Business, Africa & Middle East at Sage, could help put financial decision-makers in the digital transformation driver’s seat, and make the journey considerably smoother:
1. Automate, automate, automate
Automation is the first, and possibly most important, step in any digital transformation exercise.
There is a plethora of advanced financial tools available that automate many of the routine, “number-crunching” and compliance reporting tasks that otherwise would consume the days of most financial and accounting officers.
These tools provide access to the accurate, timely and often real-time data that would have been impossible to imagine only a decade ago. They deliver incredible benefits, including more accurate forecasting, improved planning and efficiency, and enhanced data governance.
2. Adopt a digital mindset
Most (93%) financial decision-makers who participated in the survey were comfortable with the fact that technology was carrying the weight of their daily accounting tasks.
Embrace the fact that handing over manual processes and using real-time data to improve reporting will leave financial leaders with the time and opportunity for creative and strategic thinking, critical analysis, and innovation to augment business strategy.
3. Head for the cloud
Cloud computing has many advantages, from enabling greater agility and the enhanced integration of data and processes across the organisation, to allowing for the sharing of information with clients and staff members, regardless of their location – essential in an era where remote working is increasingly becoming the norm.
4. Embrace AI
AI (artificial intelligence) is being used to drive decision-making. For example, AI and machine learning allow for the delivery of continuous audit results, enabling financial leaders and their teams to monitor the pulse of their business’s finances. Insights gained around the profitability or otherwise of individual projects, employee productivity and the like enable financial leaders to provide greater strategic direction to the organisation.
5. Collaborate on compliance and security matters
Ensuring compliance in an era of stringent regulatory requirements is one of the key responsibilities of CFOs and financial leaders. As digital transformation proceeds, this has become ever more complex. For example, as technology enables a decentralised environment, the potential not only for external attack by cyber criminals, but also for loss of internal accountability, transparency and productivity increases. It is therefore imperative that the CFO and CIO work together to ensure policies and procedures, digital controls, and the adoption of new tools and technologies meet both compliance and security requirements.
6. Exploit data analytics
Data analytics helps to drive productivity in finance. Nearly two-thirds of CFOs in South Africa spend more time analysing data than they do gathering and processing it. Data provides the tools behind accurate analysis and fast, responsible decision-making. Using predictive analytics will help drive digital transformation to new frontiers of its capabilities.
7. Become a digital transformation champion
Not surprisingly, digital transformation is often met with resistance and negativity, particularly from staff members whose jobs could be made redundant as the pace of digital transformation accelerates. These fears need to be handled with understanding and sensitivity. Financial leaders have an important role to play in helping to manage the change within their own teams and across their organisations.
8. Develop new skills
To survive in this era of digital transformation as technology takes on routine and repetitive tasks, it’s essential for financial leaders to hone their soft skills and competencies such as intuition, adaptive intelligence, diversity intelligence, curiosity, initiative and an entrepreneurial mindset.
Financial leaders must also become far more tech-savvy – not necessarily to the same extent as the CIO, but sufficient enough to understand different technologies, how they work, and their benefits (and potential pitfalls) to play a meaningful role in driving the company’s transformation strategy.