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How finance functions are addressing the next steps towards digitalisation
The 2020 edition of the PwC Belgium Finance Executive Survey polled 85 chief financial officers (CFOs) and senior financial executives from various sectors across Belgium
are driven by technological evolution when considering improving their finance function
of respondents acknowledge limiting the use of data analytics to generating financial reports
of companies surveyed have moved part of their applications to the cloud
The survey aims to assess where CFOs and senior financial executives position themselves in an increasingly digitised world where transformation is rapid and ongoing. To what extent are finance executives able to adapt their finance function to the new technological trends to increase effectiveness, create insights and add value to their business?
Finance executives are struggling to keep up with the increasing pace of change within a continuously evolving finance function. Surprisingly, finance executives’ main objective, to turn digital goals into reality, remains unchanged over the past three years. While companies may have defined a digital vision and strategy, those that have translated it into a holistic roadmap for execution are one step ahead. They benefit from doing things right the first time, and minimise their people’s resistance to change.
61% of respondents admit their finance organisation took more time to complete transformations compared to three years ago
Results of the 2020 Finance Executive Survey show that finance executives have a strong willingness to become a digitally enabled business partner. However, we see that turning this vision into reality remains a key challenge for many finance organisations.
A clear trend emerging from this survey is that the majority of finance executives attempt to reach their digital goals by taking isolated steps driven by trends, rather than considering the journey as a whole and translating it into a clear and actionable roadmap. This fragmented approach impairs the speed of execution, which reinforces the feeling of being in a constant state of digital change that’s not delivering on its promises.
As a result, finance executives are confronted with frustration and resistance to change within their organisations. Nevertheless, it’s possible to make the changes required to become a digitally enabled business partner.
The key to success? A clear, holistic roadmap built around process, people and performance measurement, guided by the following questions: What business concerns are we trying to address? Who’s impacted by this change and how? What’s the scope and speed of achievement?
51% of respondents indicate that their main concern about their current finance organisation is their people’s digital fitness and how to cope with resistance to change
A constantly evolving environment where people are heavily confronted with change leads to a climate of change fatigue. The majority of digital transformations are heavily system- and data- related, which can create a barrier for non-digital natives who don’t clearly understand the direct benefits of technology and its impact on their work. This can lead to potentially strong but understandable fear, hence a reluctance to adopt these new technologies.
The first step in dealing with resistance to change is to understand the impact of these changes on people and, more importantly, where the resistance is rooted and take appropriate action.
Finance executives are increasingly aware of this issue, and are investing in upskilling programmes to help their people become more digitally savvy and create a future-proof skillset across their finance organisation. This approach is instrumental in optimising the engagement of their people and mitigating resistance to change.
71% of respondents are driven by technological evolution when considering improving the effectiveness of their finance function
Intelligent automation has proven its efficiency. Now it’s time for consistent implementation organisation-wide, including in compliance matters. In recent years, data volumes have increased drastically, overwhelming people and systems ill-equipped to meet current needs.
In this context, data management and quality should be a greater concern for finance executives. Mastering transactional excellence now requires a mind shift where driving efficiency and effectiveness in finance is not only a question of implementing lean, automated and compliant processes, but also comprehensive, consistent and accurate dataflows.
On top of this, successful finance organisations are delivering transactional excellence by applying a unique blend of the added value of technological enablement (self-service, automation, data visualisation and analytics, etc.) and of making the best use of human empathy in their shared service centres.
65% acknowledge limiting the use of data analytics to generating financial reports rather than generating insights that can steer business decisions
Finance executives clearly intend to evolve their role into a digitally enabled business partner. The success factor for this evolution is directly linked to their use of data analytics to turn financial information into valuable business insights.
The survey shows that finance organisations are still in the very early stages of data analytics, and confirms that its use is currently limited to producing reports.
Respondents attribute their challenges not only to limited system capabilities and lack of integration, but also to a lack of relevant skills across their finance team.
Data quality and data management, while still underestimated, are considered key success factors in kick-starting the data analytics journey. They require data accountability across the whole organisation, not only in finance and IT. However, both departments have a leading role to play.
56% of companies surveyed have moved part of their applications to the cloud, yet they're largely driven by IT and not sufficiently addressing the case for business value
Survey results show that cloud adoption is well on its way across the finance function. We see that moving to the cloud is more driven by its technical functionalities and efficient cost structure, rather than its functional capabilities.
While the IT function is driving the cloud journey, finance executives should take an active role in the discussion to fully leverage the business application benefits of the cloud, like driving process standardisation and being able to capture the right data and handle it securely. This way, the cloud not only brings value by doing more with less, but it becomes an accelerator of the finance digital roadmap.