Today’s CFOs have navigated significant technology changes throughout their careers, but even some of the most seasoned finance executives dread the prospect of digital transformation. This is understandable, given the painful history of enterprise resource planning (ERP) system implementations, the need for widespread change management, and the potential to disrupt day-to-day operations.
CFOs must adopt a new frame of mind regarding digital transformation — one free of historical baggage and more attuned to what’s possible in today’s cloud-based world. If CFOs think of digital transformation as modular (rather than comprehensive) and nimble (rather than legacy-bound), they can help their organizations achieve a new and much-improved way of working.
Why do half of digital transformation projects fail to deliver the value leaders expect regardless of the industry? And what can finance professionals do to improve the odds of successfully transforming the way they do business?
Successful digital transformations start with a clearly articulated vision of the result. Examples of this include:
Those can vary from organization to organization. The focal point of a digital transformation vision may hinge on increased productivity, improved organizational insights, better controls, or all of the above.
Once the vision is agreed upon, set clear priorities. Start with one and expand from there. These priorities prove relevant to most organizations regardless of industry or size:
These are important goals but trying to achieve them all at once increases the project’s risk. Sequencing a digital transformation project with specific objectives and goals substantially improves success by allowing for precise alignment and focused effort. Teams learn from early wins, build confidence, and increase their probability of success for follow-on projects.
Another significant advantage of a modular, priority-by-priority approach is speed to value. The ability to deliver results quickly sustains digital transformation at the leadership level and inoculates it against the inevitable tides of executive and organizational change. Putting points on the board early is a sure way to gain the trust of peers, top executives, and the board.
Technology has evolved to allow for this more nimble, sequenced approach. Twenty years ago, a big-bang on-premises ERP solution would take years to implement and millions in investment, only to deliver mixed results. We learned the hard way that no single system can do everything on its own. Today, incremental technology improvements that focus on achieving a single priority result, along with a clear roadmap for updating the technology stack to cloud-native applications, significantly reduces risk and investment.
For CFOs and senior-ranking finance professionals, a successful digital transformation starts at the ground-level. Transactions are an excellent place to start. Here’s why:
Digital transformation is within reach. A modern, modular, and nimble approach to technology, combined with setting and executing against clear priorities, can establish finance professionals as high-impact change agents.
Kevin Herr is CFO and COO of intelligent document processing solutions provider KnowledgeLake.