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Contrary to conventional wisdom, the No. 1 issue organizations face when it comes to digital transformation in finance isn't how to implement the technology. Rather, it's how to get people through the change process and ensure they interact with and use the technology effectively.
"The biggest challenge that we see is realignment of your workforce and dealing with the fear that people have that jobs will disappear and how you can help your workforce reskill themselves for a digitally enabled world in finance," said David Axson, managing director at Accenture Strategy.
Effectively managing financial data is another major aspect of a transformation initiative. It starts with ensuring that there's a clear vision for the data that needs to be integrated and how it all flows into the finance organization and associated reporting and analytics, said Eric Kimberling, CEO and founder of Third Stage Consulting Group in Denver.
"Have a clear blueprint of the data you're going to be capturing from elsewhere, and make sure that you're pulling from the appropriate sources into the system," Kimberling said.
User adoption was one of the challenges Bishop-Wisecarver Corp., a manufacturer of linear guide wheel technologies based in Pittsburg, Calif., faced when implementing Adaptive Insights financial planning software.
"It's that whole change management strategy," said Miguel Danao, vice president of finance at Bishop-Wisecarver. "Whenever we introduce a new technology, it's the adoption. It's hard. With Adaptive Insights ... what we wanted to do was identify our user groups, and we really put a lot of emphasis on trainings and also how [they would] use the product."
Data integration is key to digital transformation in finance
From a technical point of view, finance leaders need to be able to collect and connect data across workflows and departments quickly to draw actionable insights, said Hendrik Vordenbaeumen, global vice president of product management at Concur Expense and chief product owner of SAP travel and expense legacy products, in an email.
David AxsonManaging director, Accenture Strategy
To do this successfully, they should consider establishing a data governance framework to set parameters for how common data, such as expense reports or invoices, is entered, which systems it is entered in and how it's collected across the business, he said.
"This ensures the data is trustworthy and consistent to help mitigate potential financial fraud," Vordenbaeumen said. Finance managers can also gain experience by becoming data stewards for their organizations, acting as strategic liaisons between IT and finance departments and supporting the frameworks' policies and operations.
For digital transformation in finance to succeed, the CFO also needs to understand how the different parts of the organization are connected, said Geoffrey Ng, senior vice president of product and technology at Prophix Software, a provider of corporate performance management software based in Mississauga, Ont.
"When you're doing planning or integrative financial planning, which is what Prophix does a lot of, you're making use of data from all these different departments," Ng said. "So, you have to understand fundamentally what these systems are capturing and what they're not."
The challenge is how to harmonize the digital transformation in finance efforts across the organization, he said.
"Because, with cloud now, people can actually acquire applications and start implementing things very quickly," Ng said. "Being able to actually understand how these different initiatives fit together and making sure they're guided by an overarching goal or objective is really important. And I think that's where the CFO, in particular, can play a very important and leading role with that."
CFOs not only need business acumen, but they also have to adapt to the ever-changing technology landscape, Ng said.
Ensuring consistency across financial systems
Convergint Technologies LLC in Schaumburg, Ill., has been using the Prophix tool since 2015, said Ben Van Heirseele, manager of financial planning and analysis at Convergint. At the time, Convergint's U.S. and Canada offices were running on its main ERP system, Spectrum Construction Management Software, while its Asia-Pacific office was running NetSuite.
"Our original intent on bringing in Prophix was to do consolidations between the two systems to have a place where the data would come together from an action standpoint, and we could consolidate and reconcile," he said. "So, that was implementing a global chart of accounts, being able to take both sets of data from NetSuite and Spectrum on an income statement and balance sheet level and put the data together, while still maintaining their chart of accounts."
As Convergint grew through acquisitions, it faced another challenge. The company wanted to have one place where its business leaders in each of its decentralized offices could input data, see rollups of that information live without having to send spreadsheets back and forth and ensure all the data was integrated, Van Heirseele said.
"That was a challenge -- we were a rapidly growing company with a not very formal budgeting and planning process," he said. "Prophix helped with workflows [and] security data management and offered a consistent process."
Currently, Convergint is dealing with the challenge of managing the multiple ERP systems of its acquisitions, Van Heirseele said.
"From a financial consolidation standpoint, we have a very good process because we've been doing this for a number of years now. But, from an operational data analysis perspective, it's challenging because we have regional [companies] on multiple different systems. And to be able to consolidate the data coming out of those systems is not always easy," Van Heirseele added.
However, Convergint is planning to solve this issue by moving all the varied ERP systems to Microsoft Dynamics 365 for finance and operations.
"We're really excited about Power BI and all those tools and being able to have everything on the cloud in one system that's scalable," Van Heirseele said. "We're just past the contract phase and starting the development phase of what will probably be a 12- to 24-month rollout because we're continuing to do acquisitions and add them on."
IT and finance must team up for digital transformation in finance
Technology is often the biggest barrier to data integration, Vordenbaeumen said. Companies using closed legacy solutions are going to spend more time manually combining and organizing information than analyzing it.
Finance managers should work with IT to identify cloud-based solutions that solve financial needs and connect seamlessly with the surrounding infrastructure, Vordenbaeumen said. And they should also look for APIs to integrate disparate data sets and gain a comprehensive view into financial data by merging data to a knowledge dashboard.
Using Adaptive Insights financial planning software to help with data integration has enabled Bishop-Wisecarver to reduce its planning cycle by 50%, according to Danao.
"We've integrated a lot of data from a variety of sources, like from our ERP, as well as our CRM, to create a pretty robust model that helps us develop an accurate forecast to really improve our decision-making and what-if analysis," Danao said.
Since technology is critical to helping CFOs manage data, it's increasingly important that finance managers learn about their companies' IT systems and collaborate with the CIO and CTO to ensure proper data collection, according to Vordenbaeumen.
And, as they interface more frequently with IT to cut costs and drive efficiencies, they should also prioritize learning the roles and responsibilities of their companies' IT department, he said.
"CFO and CIO priorities tend to be at odds with each other, so developing an understanding and forging relationships early will pay dividends later on," Vordenbaeumen said.