By Dee Houchen, Senior Marketing Director, ERP/EPM, Oracle
Many finance- and insurance-led businesses will claim that they’re “digital by default.” However, scratch just a little beneath the surface and it quickly becomes evident that many are a lot more behind the times than they realise.
It’s not necessarily their fault. A lot of the time businesses, and their CFOs, don’t know what they don’t know. But when you compare the way they do business today to what’s actually possible, it’s clear that digital transformation should be at the top of every CFO’s agenda.
Let’s consider where banks and insurers are with digital, and how they can up their game in a positive, proactive way.
Thought faxes disappeared without a trace years ago? Think again. Research shows that 68% of financial institutions and 66% of financial services companies still receive invoices by fax. And if those numbers weren’t staggering enough, 75% of all businesses surveyed still get invoices by mail.
The problem here is glaringly obvious: using these methods requires people to handle all this paper. And where there are people, there’s a delay in payment being made. In fact, nearly 45% of payments take over a week to process.
Could it be that this method works in many companies’ favours, enabling them to maintain steady cash flow and compensate suppliers at the last minute? Perhaps.
However, when you consider how much emphasis so many financial businesses put on enabling consumers to use their digital platforms, it can seem as though their reluctance to digitise the back end of their business is misaligned with the customer experience part.
To resolve this, companies must be willing to address the disparity between payments-in and -out and look at ways to migrate to digital technologies such as the cloud. This doesn’t have to be an overnight transformation; it can be gradual. In fact, it can often be better that way.
That said, CFOs need to bear in mind that many different business processes are involved in any technology change, so it’s important to keep a paper trail in place until all systems are up and running.
For many companies, the need to "digitally accelerate" can often appear at odds with core business needs. For example, access to real-time data and market intelligence is critical—but without a framework for how it can be leveraged to drive smart business decisions, the insight goes to waste.
CFOs can take the lead here, particularly in the financial services sector. Not only can they work closely with the CTO to identify the IT infrastructure needed for their business to thrive, they have the 360-degree oversight needed to ensure that all areas of the company will benefit.
In addition, CFOs understand the value of the data that their company holds. It can be a very lucrative asset, and one that shouldn’t be "owned" by data scientists. Part of the CFO’s job is balancing revenue generation with compliance—all the more reason for them to play a proactive part in understanding what can, can’t, and should be done with data, and how best to use and protect it, both now and in the future.
A large part of being a future-facing organisation is understanding what a company’s data architecture will look like when cloud technologies are firmly in pace. How will it impact day-to-day operations? How will users access data? How can the business ensure it remains secure? These are all questions CFOs should be asking, as part of their wider remit for risk management and fiscal responsibility.
Ultimately, a company’s priority should be to establish a holistic approach to digital transformation. It’s not designed to do any single thing; it should be regarded as an overall improvement process that impacts all areas of a business.
A CFO should play a prominent role in setting the strategic direction for the business, actively promoting operational efficiency across the board, and ensuring that transparency, compliance, and risk mitigation are prioritised at a functional level.
No-one said it was going to be easy.