Digitalisation is defined by Gartner as the ‘use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business’.
Digitisation and Finance are terms that are usually not associated together. However, comparing finance processes today with those of 10 years ago, it is evident that technology has been the main driver of boosting efficiencies within the organisations of today. We no longer hold onto our receipts – instead we snap a photo on our smartphone and upload it into the ‘cloud’. Manual reconciliation is a process of the past as we now use software to automatically reconcile for us. It comes with no surprise that CFO’s are putting digitalisation on the forefront of their priority list for not only the vast benefits it offers but understanding that failing to adopt digitalisation can be very costly for organisations.
The recent arrival of technology advancements within the financial space has been further accelerated due to the COVID-19 pandemic as organisations focus on their digital initiatives. As finance teams work from home, simple tasks such as approving supplier invoices become difficult, creating a chain effect of issues such as late payment penalties. It is clear that CFO’s regularly experience these issues today as the key findings from the ‘2021 Gartner CEO Survey: The CFO Perspective’ is that ‘CFOs indicate digitalisation is a priority and are increasing their investments accordingly: 82% and 70% of CFOs said they will increase investments in digital capabilities and information technology, respectively.’
The main priorities of CFO’s are based around maintaining financial sustainability, whilst looking for opportunities to increase growth such as identifying strategies to reduce costs. This is why 82% of the CFOs today understand that key priorities are driven by digitalisation to not only protect value but to help grow value. This is addressed in the report stating that ‘CFO respondents report a shift from value protection to value creation and a prioritisation of digital initiatives and investments.’ This also ties directly back to the definition of digitalisation, which ‘provides new revenue and value-producing opportunities.’
Introducing Digitalisation into Finance Teams
There are many ways CFO’s introduce digitalisation into their organisation. Automation reigns most popular within finance teams whereby financial processes are automated. An example is AP Automation, whereby Accounts Payable is automated to streamline the complete Invoice process to cut costs & time spent by up to 85%. Expense management is also commonly digitised through technology such as OCR (Optical Character Recognition), allowing expense claims to take under a minute by removing data entry. Digitisation opens opportunities for CFO’s to enhance the security and accuracy of financial processes found within finance teams including removing data entry or storing documents online rather than in storage rooms.
It is not surprising that the CFOs of today are prioritising Digitalisation. It is evident that the primary benefit of Digitalisation is not to replace processes but to instead create further efficiencies within existing processes such as implementing AP Automation. These elements contribute to protecting the value and boosting the growth of an organisation by reducing costs and time spent on tedious tasks whilst eliminating errors and increasing security. Do not be left behind as organisations adopt technology to assist their everyday processes. If you have not, now is your time to start prioritising digitisation.
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