The world of finance is undergoing significant change, driven by innovative technologies and an increasing emphasis on efficiency and value creation.
The term ‘finance transformation’ encapsulates this shift, involving streamlined finance functions, new technologies, and improved decision-making capabilities. However, many finance transformations fail to achieve their full potential. Current estimates suggest that 70% of digital transformations fail, a statistic that has remained consistent over the years.
According to AICPA and CIMA, one key reason for this failure is the "lack of buy-in and inadequate capability due to scarce training across the organisation.” It's clear that true finance transformation extends beyond technology adoption; the role of people and the role of training is essential for success.
Finance transformation is a strategic initiative embraced by CFOs to reshape their departments and generate more value for their organisations. It involves comprehensively re-engineering finance processes to enhance efficiency, reduce workloads, and improve decision-making capabilities.
Technology plays a central role in this transformation, with artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), and advanced analytics revolutionising finance operations. Manual processes and reliance on spreadsheets are giving way to ERP systems and automation, streamlining core processes, enhancing accuracy, and ensuring regulatory compliance.
However, finance transformation is not solely about technology; it involves redefining the finance operating model, evolving business processes, and reimagining the finance team's role. This holistic approach is essential for successful transformation.
A traditional finance function is often transactional, insular, passive, backward-looking, and risk averse. At the end of a finance transformation project, the finance function should be more collaborative, strategic, forward-planning, play a leadership role, and actively seek out opportunities. Simply put, they will be adding more value to the organisation.
While new technology can help achieve this, it is only effective if team members are properly upskilled. Without competent team members who can effectively utilise advanced technologies and analytics, even the most sophisticated tools would be ineffective. Personnel in transactional roles could be made redundant at the end of a finance transformation project, but a more ambitious organisation would look to upskill these team members to help add more value. It is also necessary to change the mindset of the team, enabling them to become more proactive and influential members of the organisation.
Yet, training is often overlooked. Some finance transformation projects do not include a budget for training, dooming them from the start. Some organisations start with a training budget, but it is usually the first item to get squeezed if other project costs increase. There is little point in transforming your technology if you are not prepared to transform your finance team as well.
Resistance from the workforce poses a significant challenge during transformation. Effective change management strategies should address both technological and human aspects, acknowledging emotions, fears, and apprehensions associated with change. Strong leadership is necessary to inspire teams to embrace change, learn new skills, and adapt to new ways of working.
Training addresses all the human aspects of finance transformation: learning to effectively use new technologies, becoming better leaders, upskilling in key areas (e.g. financial planning), and running a finance transformation project successfully. Having a clear career development path with continuous training support helps staff buy into the changes ahead.
Training is indispensable for successful finance transformation. With the rise of automation, AI, ML, and analytics, teams must acquire the skills to leverage these technologies effectively. Inadequate training leads to errors, inefficient technology use, and resistance to change, undermining the benefits of technology adoption. To fully harness the potential of digital finance, organisations must heavily invest in training their teams on new technologies and ways of working.
Specifically, training should not be limited to the transformation project alone; it should become a core part of the finance function’s ongoing strategy. To thrive in the evolving finance landscape, organisations must cultivate a culture of continuous learning and adaptation. This involves regularly updating the team's skillset, promoting learning about new technologies and industry best practices, and fostering adaptability to navigate regulatory changes and evolving business practices.
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