Four key lessons from Covid-19 on starting your company’s digitisation journey
Lockdown accelerated the scaling of digital initiatives for greater visibility, control and management over financial processes
Cloud providers reported exponential increases in demand for cloud services in regions with enforced Covid-19 social distancing in place. McKinsey reports on how, as soon as the pandemic struck, Chinese banks significantly accelerated their shift to digital channels.
Establishing a blueprint for global financial services, Asian banks leant more heavily on existing digital channels to enable contactless customer engagement while accelerating the path to digitised core-banking processes such as online document submission. China Merchants Bank, for example, enhanced its app to become a one-stop shop for life and financial services.
While it’s unfortunate it took a pandemic for the scaling of digital transformation (and particularly digital payments), this offline-to-online move has been long in coming. A key theme highlighted in the Sage research report, “CFO 3.0 — Digital transformation beyond financial management”, is that Covid-19 accelerated a process of digitisation that for many companies was already under way. The Sage report looks at the evolution of finance leaders.
Watch the video below on the evolving role of CFOs:
Lesson 1: Need for accelerated transformation
While the process was inevitable, it took many by surprise as the sudden shift to working from home happened abruptly. One of the most important business lessons to emerge from the Covid-19 pandemic is the urgent needto accelerate their digital transformation, with financial processes top of the list.
The Sage research report says that 90% of senior financial decisionmakers have already adopted emerging technologies in some form; 44% say Covid-19 increased demand for their services; and 78% report that revenue grew in recent months.
Leading the rush to digital transformation during lockdown was the increased need for vital processes such as paying suppliers and getting paid on time to keep money flowing between trading partners.
Lesson 2: Cloud-based technologies improve cybersecurity
With remote working from diverse locations and devices came new identity-assurance problems. To reduce this risk, many cybersecurity advisers recommend businesses move their work applications to the cloud, so that data remains on company servers wherever staff are located.
The report also highlights newfound confidence in a remote workforce to ensuring compliance with cybersecurity. While the Sage report finds that 50% of respondents say managing risks such as fraud and cybersecurity are a challenge, 72% report that cloud-based financial management technologies have improved security and helped protect financial data.
The report shows that finance leaders of SA’s medium and large enterprises are already advanced in their digitisation plans, with 83% of respondents saying they already use cloud technologies to create more agile and cost-effective in-house finance functions. Furthermore, 82% of respondents say they use financial management technologies to automate and expedite compliance reporting.
Lesson 3: Clear line engagement
Notwithstanding such high adoption levels of digitisation, many companies realised they had been complacent regarding the urgency of developing a remote capability, which was now seen as an immediate must-have. Many companies during lockdown became painfully aware of their limitations in some areas — such as those still using manual or on-site legacy systems to process invoices, pay bills or handle other finance functions.
In this uncertain economic climate, it’s more important than ever for a company to know where it stands financially at any given time. Lockdown has been a wake-up call for organisations to accelerate their digitisation initiatives to gain greater visibility, control and management over their financial processes.
These include automation of accounts payable, invoicing, procurement, financial reporting and treasury. Many companies using manual or legacy systems, which are heavily dependent on desk-bound staffers to handle tasks, found they were not able to access this information either quickly enough or accurately.
In times of crisis, the finance departments need to be fully engaged with management and each business sector to understand operational expectations and deliver the information they require. Having instant access to accurate financial data is vital to informed business decision-making at all times.
Lesson 4: Steps to digital transformation
Any finance leader who has still not begun their business’s digital transformation strategy might want to start with this simple five-step plan:
- Identify the goal that digital transformation needs to solve, whether increasing accuracy or speed, reducing cost, improving reporting or reducing manual work by automation.
- Define the technical architecture needed to meet organisational goals starting with your current state of operations.
- Present the business case to management, using ROI metrics, to access the funding required funding and management support needed to make infrastructure and technology investments.
- Develop a long-term plan. When it comes to implementation, start with simple changes that can have a huge impact.
- Build the appropriate infrastructure. A cloud-based architecture is the best way to go in today’s mobile world.
This article was paid for by Sage.
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