Digital transformation never stops: How CFOs can drive continuous change
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From video calls to online whiteboards and cloud project management tools, we’ve all become intensely familiar with digital tools that enable virtual work this past year. The digitization of business processes and operations has been underway for years, but COVID accelerated global digital transformation by as much as 7 years, according to McKinsey. This year, businesses are expected to spend nearly $305 billion on public cloud services, up over 18% from $257.5 billion in 2020.
Despite these exorbitant costs, the work of digital transformation is far from complete for most workplaces. Historically, stakeholders like Chief Financial Officers (CFOs) and finance leaders have been key change agents within their organizations. So it’s no surprise that digital transformation is an effort that benefits from continuous finance scrutiny and leadership, and driving digital transformation is a key role of the CFO. Don't have a CFO yet? Check out our page on when to hire a CFO for your business.
As a finance leader, here’s how you can keep propelling digital transformation forward to unlock further operational efficiency, cost savings, and revenue growth.
1. Optimize finance operations
At most organizations, digital transformation tends to start with customer facing products and revenue generating operations. So sales and marketing teams have benefited in recent years from a plethora of digital tools that help them generate leads and close more deals – everything from data analytics to lead scoring, automated outreach, and more. But business leaders miss a big opportunity to create even more revenue and efficiency if they let their efforts stop there.
As a starting point, consider whether your own team's finance operations processes are fully optimized. According to another report by McKinsey, close to 60% of financial activities can now be fully or almost fully automated.
Source: McKinsey & Company
Stay on top of the new technologies like expense management tools, automated billing software, and accounting systems that can add to your stack of finance tools. For instance, new spend management software have emerged in recent years that combines corporate cards, expense management, accounting, and reporting all in one.
Not only will your team thank you for automating tedious task work, you’ll gain accurate, real-time data to confidently guide your business model and financial planning. Less time on manual tasks means more time spent on strategic growth.
2. Upgrade internally built tools
Keep advocating for digital upgrades to other lines of business—especially ones using in-house, legacy platforms.
Homegrown technologies, such as CMSs, CRMs, billing platforms, and accounting solutions, require dedicated resources to maintain and evolve over time—not to mention a huge initial fixed-cost investment. Without proper upkeep, they become sources of data silos, revenue leakage, and human error.
"Without proper upkeep, homegrown technologies become sources of data silos, revenue leakage, and human error."
For example, if your product platform is separate from your billing, it takes a lot of work for marketing and sales to test and roll out new offers and pricing changes. This is a problem that directly impedes revenue growth. And if your billing solution doesn’t have the necessary integrations with your accounting system, it means finance teams are spending hours each week generating invoices and processing payments by hand. This leads to errors, missed tasks, and unpaid invoices that go undetected. These simple mistakes negatively impact your bottom line.
Many SaaS solutions have emerged in recent years to automate manual tasks and eliminate mistakes that come from human input. Better yet, because they’re virtually all cloud-based, these products are updated regularly, often at no additional cost to the customer. And thanks to the flexible subscription models that most products use, usage can be scaled up or down as needed according to your budget. Fewer fixed costs is music to a CFO’s ears.
3. Don't let new data silos form
Another area to scrutinize is the way that data flows through your revenue operations. Nearly 9 in 10 businesses struggle with how they manage their data—either they don’t have the right data, they can’t dig into it as deeply as needed, or they simply can’t get to it quickly enough. There’s also the issue of being able to share data seamlessly between departments. Close to 70% of CFOs consider data silos to be an enormous roadblock to growth. As a result, decision-making is fragmented between teams and data that could be valuable goes unused.
Some common data silos:
- CRMs where customer accounts get tracked and updated. These days, multiple teams are responsible for keeping customer data updated. All of these updates need to be automatically synced to other platforms like customer lifecycle management tools and billion solutions to ensure a smooth customer experience.
- Quote-to-cash processes. Once a quote is created by sales, data needs to flow automatically to other departments to create accurate customer profiles and billables.
"Close to 70% of CFOs consider data silos to be an enormous roadblock to growth."
Digital transformation helps data flow seamlessly across different parts of your revenue operations. Ideally real-time data permeate your organization in the following ways:
- The system you use to automatically nurture marketing leads should sync with your sales CRM and alert your sales team when a lead is ready for outreach.
- Your CRM should integrate with your billing solution to automate account creation and seamless billing and collections.
- Billing data should sync with your accounting or ERP software so you can close your books with full data accuracy and accounting compliance.
This kind of data integration unlocks faster growth. It allows you to shift from historical data analysis to real-time monitoring and forecasting. With up-to-the-minute data readily available, you can detect emerging situations more easily and help your teams make quick business decisions. For example, if your business sees the majority of its leads suddenly coming from a new market segment, that might trigger a shift in strategy or an expansion into a new space.
As a finance leader, you’re naturally suited to lead your company’s digital transformation because of your insights into different parts of the organization. You know what’s needed to build a tight revenue operation with seamless handoffs between marketing, sales, and finance. With your finance savvy, you can also play a big role in vendor negotiations to secure the best pricing for your organization.
4. Build up business scalability
Take digital transformation into account for your next round of headcount planning. Modernizing your organization’s processes and FinOps tools enables you to grow the business efficiently without swelling up your team size.
Consider this: Your team might be able to get by with manual processes for now to manage your current customer base—but what happens when the number of customers doubles or triples? Will those processes allow your team to maintain the same level of customer service or will you need to expand your staff to keep up with customer needs? The reality is, when processes are manual, they aren’t scalable. To create sustainable business growth, you need systems that scale the output of your team, not your headcount.
Continuous change management
Digital transformation isn’t something that happens in a day or even a year. It’s also not as simple as making the right tech purchases.
Savvy CFOs (and CIOs) know digital transformation is an ongoing process. Change can be uncomfortable. So you need to not only usher in new solutions, but also help teams understand the need for change, develop new skills, and sustain change. It’s all about continuous change management of people, processes, and technology. That's how you'll make sure your organization stays on the path for long term financial success.