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“Finance autonomy” and “digital transformation” are not merely fads; they are becoming essential functions for many businesses.
In the years ahead, cloud-based ERP, touchless back office automation, and cognitive innovation will continue apace, creating opportunities to streamline operations and free analysts’ time radically.
It is no surprise that finance teams have become leaner, primarily a headcount function in operational finance (order-to-cash, procure-to-pay, transactional accounting).
Meanwhile, expectations for support from business finance (reporting, planning, budgeting, forecasting) and specialized finance (record-to-report, treasury) will continue to grow.
According to the State of CFO’s Office Report 2022, “outdated technology stacks are one of the leading causes of business inefficiencies.” Workflow digitization is the new norm and a necessity for firms to sustain and flourish.
But how can a business determine the ideal time for a digital transformation, particularly in finance operations and back-office functions?
There are usually clear indicators that a business is ready for digitalization, and recognizing these indicators and their impact on your revenue and performance will help you determine the appropriate timing.
This article explores two universal indicators of transformation readiness. These criteria are evaluated based on potential optimization opportunities in your company’s financial operations.
Once you identify your business digitalization level, a CFO’s next steps are critical to determine the feasibility of an upgrade and set the stage for a successful transformation journey.
There are four main factors to determine whether the next solution enables more efficient finance processes compared to the current expenditures.
Understanding the current situation and the barrier to achieving the company’s transformation objectives is essential. A business should thoroughly assess all problem areas, pain points, and improvement opportunities.
Typically, this process answers concerns such as:
CFOs must evaluate transformation against other changes across the company, considering factors such as resource commitment, duration, risk, budget, and level of change, among others.
Every company is in a different position, and CFOs must align on the importance and extent of transformation to meet the overall company strategy.
Reassess how the solution required to transform your digitalization level impacts your cash flow and profitability. By building a nimble strategy, CFOs can create a framework that helps stakeholders make decisions, then track investment results in real time.
This process typically answers questions like:
Consider employing a modified version of zero-based budgeting wherein expenses are justified one by one, and budget owners must exemplify how spending is aligned with defined essential capabilities. The key is determining when and which cuts to make.
One approach is to create tiered forecasts that reflect cuts in response to revenue reductions of 10%, 20%, and 30%. Keep all line items on the table and provide sufficient detail to ensure you’ll achieve the desired ROI.
This process typically answers questions like:
Now is an opportune time to invest in technology that can automate manual tasks and free up analysts for upskilling and more strategic work.
When growth is slowing, your analysts are forced to work harder. Restructuring when everyone is paddling as hard as they can is painful.
Don’t wait until all you can do is slash spending and schedule layoffs. So start working to ensure your business is ready to ride out the storm.
Automate invoicing, collections, deduction, and credit risk management with our AI-powered AR suite and experience enhanced cash flow and lower DSO & bad debtTalk to our experts
HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.