Digital Transformation

3 Core Objectives of Digital Transformation of Finance Functions

on February 17, 2020

We’ve been talking a lot about financial digital transformation lately, so let’s take a high-level view of the objectives that drive this change.

As you may have read in the previous post -- “What is Digital Transformation?” -- true transformation is about creating a competitive advantage by shifting your thinking from reactive to proactive. It’s a philosophy or state of mind, not a business initiative with an end date. That being said, every philosophy has principles, and digital transformation in finance has three core objectives that ultimately drive it forward.

  1. Mitigate Program Risk

Left unaddressed risk can prove extremely costly, which is why risk mitigation is one of the most important expected outcomes of a financial transformation. After all, if there was zero risk involved in your processes, what’s the point in trying to improve or automate them?

However, when you are looking at solutions in automation, it’s important to realize that risk does not live in silos or on some remote island. There is exposure across the entire organization and many stakeholders that play a role in risk mitigation. If risk is not isolated, why would you allow your solution to be?

When considering solutions to risk mitigation look beyond siloed solutions that only solve one piece of the equation. Instead, explore solutions that meet the needs of all stakeholders that have a vested interest in risk mitigation.

  1. Influence Employee Behavior

A second objective of digital transformation is to positively impact employee behavior and create culture of compliance. According to Oversight data, 25% of employees are unintentionally acting outside of compliance. Very few individuals truly act in a malicious manner.

As such, most companies don’t want to create a culture of punishment, but rather design supportive programs that create opportunities for employees to learn and improve. The problem is that manual processes make it hard to identify patterns and learning opportunities.

The solution that you decide to implement within your organization should have the ability to find patterns and provide actionable feedback that will ultimately influence employees to adopt responsible behaviors.

  1. Increase Operational Efficiency

Despite the importance of the previous two objectives, their full impact on digital transformation should improve operations across the organization. If you manage to meet those objectives only to cause hang-ups elsewhere, you’ve done nothing more than relocate issues instead of solving them.

Your financial digital transformation needs to increase your operational efficiency down to the bottom line in order to really be effective. Look for a solution that provides this type of impact and measures it as well.

The Bottom Line

To find the best solution for your digital transformation worry less about the speeds and feeds of the technology; and start asking about the outcomes you can achieve with it—how will it give you a competitive edge?

Jessica Kirk

Jessica Kirk is Vice President of Marketing at Oversight.

Get Your Copy of An Action Plan for Finance Transformation