A major challenge nowadays for all organizations is digitalising finance functions. A survey reveals that one in 50 companies the CEO’s top five priorities will definitely rank the term ‘digital’ in the early 2000s, according to Gartner. Gartner confirms that the proportion of businesses that have a digital strategy rose from 62 to 82% in 2018 to 2019. This considers that 90% of today’s companies have been confronted in their business models by different types of disruption.
Do accounting need digitising? If yes, why so? Corporate entities are faced with the need to digitalise their accounting to simultaneously adapt manual processes and are all now concerned by digitalization. But in addition to their concerns it also helps to accomplish many things like leveraging electronic solutions, which in turn increases productivity as well as performance. It also helps to improve relation with clients and increases people’s digital skills by making them to rethink human resource management.
In 2020 a study on finance departments by the human resource consulting firm Robert Half said that, 80% of CEOs can already see the difficulties they will have recruiting and retaining skilled teams of co-workers, among that particularly people with digital skills. Finance departments have these performance requirements in a complex and uncertain environment as a recurring factor. The PricewaterhouseCoopers (PwC) survey on priorities for financial directors reveals that, the leading consideration since 2018 and so on for further three years is the need for digital skills. Therefore, a major opportunity for financial decision makers is the digital transformation and its assortment of new technologies. This includes digitisation and also artificial intelligence, Robotic process automation, big data analytics, virtual assistants etc., The transversal and universal goal for these technologies is to extract, assess and realise the value of data.
The status of financial professionals would, in extension, also be valued if the companies can understand the value of their data. Finance professionals can change their positioning within their organizations with the digital transformation. They are seen less as occupying back-office roles and more as people who support wider business efforts. Data volumes are increasing at a dizzying rate and so being successful with this evolution is a critical thing. The size of the global “datasphere”, which represented around 10 zettabytes in 2012, is expected to reach 175 zettabytes by 2025 according to International Data Corporation (IDC).
This trend of information overproduction also includes financial data. Because business intelligence and visualization tools incite organizations to increase their use of dashboards, and also regulatory obligations require more information to be stored for longer periods of time. Data remains at the heart of the process, such as invoices in electronic solutions, structured data in predictive models, labels for classifying accounting entries, and product references in ERP systems. The volume of digital data is increased by the digital transformation and also helps to speed up electronic processing. PwC says that people in the most efficient finance departments are already spending 75% of their time analyzing data. As a notable way to benefit from information in real time, to align work with management needs and to make data more reliable, 40% of finance departments intend to acquire Big Data solutions in this year. This was a report by Dresner Advisory Services published in 2019.
$271 billion from European companies alone in 2020, as estimated by IDC have been invested in digital technologies. The four different roles to face this issue by accountants, finance decision makers and auditors today are, Sprinters (as digital marketing is accelerating), marathon runners (to keep pace with the multiple projects arising), coaches (to guide business units and staffs) and referees (securing and confirming decisions). CFOs move from a support function towards that of a value creator with predominantly technical expertise to optimize more assertive leadership within the value chain. Performance, innovate, connect, communicate, and, ultimately, create value are the other new five principles in addition to the previously said four roles for the CFOs.
On the innovation side, artificial intelligence is already making headway into the finance function and organizational performance leverages an increasing number of Cloud applications and, of course, digitalization technologies. 58% of finance departments have increased their budgets for acquiring data visualization solutions, 56% have invested more in analytical solutions and 50% of CFOs invested in robotic process automation (RPA), according to Protiviti consulting firm. The benefits of these investments will definitely show its worth in 2021.