Digital Transformation Enabled by Cloud Financials

Digital transformation impacts all areas of a business from interactions with customers and partners to how employees function. Digital transformation vastly reduces friction across all parts of an organisation. By digitising its processes, a company can be in a better position to manage cash flow, inventory, budgets, accounts payable, accounts receivables, days sales outstanding and order metrics while lowering operating expenses. It makes processes and tasks cheaper and faster, giving the business more time to focus on innovation and growth. When a business simplifies how it operates and reduces friction, the organisation also creates more value for its employees and customers.

Cloud-native financial management systems help enable digital transformation. These play a critical role in driving business growth and help a company take steps toward implementing more digital solutions. Digitising core financials can drive digital transformation throughout the organisation, reducing business friction and improving customer experiences, business relationships and financial results.

Before implementing digital solutions, companies need to consider the impact of technology on their supply chain, partners, customers and employees.

A recent study, conducted by Deloitte, found that organisations with mature digital transformation initiatives have better financial performance than others. Deloitte reported “higher-maturity organisations surveyed were far more likely than lower-maturity ones to significantly outperform their industry average on key financial metrics…Digital maturity’s impact on financial performance comes from enabling improvements in efficiency, revenue growth, product/service quality, customer satisfaction, and employee engagement—as well as by prompting a greater focus on growth and innovation.” Forty-five percent of organisations with higher digital maturity reported net revenue growth as compared with 15% of those with lower digital transformation maturation, and 43% reported higher net profit margins, again as compared with 15% of those with lower digital transformation maturation.

How to Build your Digital Transformation Plan

Companies need to focus on technology, data, process, and organisational structure, including:

1. Technology: The key is understanding how to effectively solve challenges that may prevent a business from driving change. Cloud-native financial management systems improve information quality and efficiency at measurable rates.
2. Data: This is the basic standard to evaluate large numbers and use them to communicate what improvements are needed. Integrating cloud-native financial management systems increases data visibility.
3. Process: A well-planned strategy is crucial to creating a system that focuses on improving operational processes and engaging customer experiences.
4. Organisational Structure: There needs to be a balance between welcoming technology advances and how leaders and employees are managing the pace of change.

To facilitate successful digital transformation, a business needs to support change and evaluate what solutions solve the company’s biggest needs and challenges. Deploying a cloud-native financial management system allows the finance team to adapt to digital change and set up the business for future success.

According to McKinsey and Company, CFOs are taking on a bigger role in executing digital transformations, beyond just traditional financial tasks, since they control most of the key business levers that determine a transformation’s success. As McKinsey reports:

“A transformation initiated by the CFO is just as likely to succeed as one started by the CEO, even though it is much more common for the CEO to initiate such an effort. What’s more, finance leaders view their own role and contribution in a transformation more expansively than do their fellow executives. CFOs say that their time on transformations would be best spent on role-modelling new mindsets and behaviours, setting high-level goals, and communicating the transformation’s results—when, in practice, they are most often charged with traditional finance-oriented responsibilities.”

As a business grows, it’s critical to invest in innovative technology that offers a seamless flow of business information with customers and trading partners. A cloud-native financial management system thrusts the business forward so it can stay ahead. It helps unlock the ability to adopt digital transformation across the organization. Modern data exchange also helps increase revenue and optimises the business’s capabilities. Deploying a cloud-native financial management system prepares a business for the future by giving finance leaders more control and visibility into the operations and the ability to meet new demands.

To learn more about digital transformation and cloud-native financial management platforms, read our eBook entitled How Cloud-Native Financial Management Systems Power Growth and Digital Transformation.

The Akuna Solutions Team