Where Should the Finance Function Focus Their Digital Transformation Efforts?

4 mins read

22 February 2023

Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine

As 2023 officially begins, CFOs that are facing economic challenges are maintaining their cost-cutting efforts as a potential recession looms. Yet, this does not imply that efforts like digital transformation have lost priority because CFOs still see it as strategically significant for their companies. Regardless of what is happening, it must be done and is still a top priority. However, leaders in finance are still having trouble getting their digital transformation initiatives forward. Some may not necessarily know how to move forward in their digital transformation journey hence why DigitalCFO Asia decided to speak with Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine to get his perspective on the topic. 

Finance Function’s Present Digital Transformation Efforts

“The pandemic has taught us that digitalization is key for companies to stay competitive and thrive,” says Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine.

These sentiments seem to be echoed still as the finance function contemplates what lies ahead in their digital transformation efforts. BlackLine’s latest survey with Censuswide showed that 51% of C-suite executives and finance and accounting (F&A) professionals in Singapore indicated that they will invest more in digital transformation initiatives this year. 49% of them are considering implementing or scaling automation solutions to increase and optimize working capital in 2023, proving that digital transformation is still key in the corporate agenda.

Challenges That Are Holding Finance Teams Back In Their Digital Transformation Journey

The present economic climate has inevitably presented many challenges across various functions and industries. BlackLine’s survey with Censuswide highlighted the three biggest obstacles C-suite and F&A respondents in Singapore highlighted they will face in the coming year: 

  • Reduced budget for their department
  • Increasing regulations and scrutiny
  • Being able to provide accurate data quickly enough to help the organization respond to market changes

It’s understandable when companies hold back on making new changes amid ongoing financial challenges such as crippling supply chains and unprecedented high interest rates. Organizations would choose to prioritize understanding their cash flow in real time and optimizing their operations to minimize the impact of external disruptions. Moreover, the F&A profession is struggling with an unprecedented labor shortage like many other functions, forcing them to look at solutions which aren’t dependent on staff expansion. 

“This is also why it’s critical to replace any labor-intensive processes such as conventional Accounts Receivable (AR) processes with automated solutions to free up resources which can be allocated to strategic decision-making.”

Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine

Companies which are still hesitant can weigh the benefits and costs with a simple question: How much time and money can we save if we automate a certain process? A follow-up to that would be to weigh the benefits and evaluate what would be best for the organization at that time. 

Key Priorities That Organizations Hope To Achieve With Digital Transformation

With the ongoing shortage of talent in F&A functions, organizations are looking at how they can use digital technologies to improve operational efficiencies, and manage the workload of existing employees. With legacy technology and processes, F&A professionals may spend the best part of their work week dealing with repetitive transactional tasks. Not only is this inefficient, F&A professionals are also unlikely to feel challenged, valued or fulfilled in their roles. Digital technologies such as intelligent automation take over the repetitive and tedious work, allowing F&A professionals to focus their attention on more strategic tasks.

“Ensuring compliance is another key priority, especially as businesses manage data from across different systems, business units and stakeholders, amid increasing regulations and scrutiny,” emphasized Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine.

Traditional compliance processes can typically be quite manual, fragmented and siloed, which is why organizations are turning to integrated, cloud-based solutions like BlackLine to help with compliance management.

Southeast Asia’s leading on-demand multi-service platform, Gojek, is one such example. The company deals with massive amounts of data – related to logistics, bookings, transactions and financial movements – from various sources. With the high data volume, Gojek needed a tool that would help them quickly, accurately and effectively reconcile payment data across multiple formats to match transactions with bank statements. With BlackLine, Gojek was able to generate critical reports and meet the highest governance standards through their compliance across finance and accounting operations. 

Steps CFOs Should Take To Either Begin Or Enhance Their Digital Transformation Efforts

The digital transformation process looks different for each organization, depending on their industry, company size and scale, existing technological maturity and so on. However, what is common among those who have had success in introducing digital initiatives in their organizations, is having a clear understanding of what the organization hopes to achieve with digital transformation. 

“As a first step, CFOs will need to determine the organization’s objectives, and what success would look like for their organization,” says Mike Polaha, Senior Vice President, Finance Solutions and Technology, BlackLine.

They can then set goals by benchmarking their organization against others of similar size and scale, which have already undergone transformation. 

CFOs will also need to get CIOs closely involved in the digital transformation initiative. According to Gartner, success in digital investments is highly dependent on strong CFO-CIO partnerships. Just as how financial operations management is not solely the CFO’s responsibility, managing data too is not the duty of the CIO alone. These are shared responsibilities, which would require CFOs and CIOs to speak the same language, to have a productive discussion on how to turn investments on digital technologies into real digital capabilities for the organization.

CFOs In Ensuring That Digital Transformation Efforts Cause Minimal Disruption To Their Workflow

CFOs should learn from others who have had experience implementing a finance transformation program, and adopt any learnings to minimize disruption to their existing workflows. Here are some tips:

  • Plan ahead, and set clear, quantifiable goals as a benchmark for progress
  • Lean on the expertise of reputable, experienced software providers, rather than dedicating significant resources to building, maintaining and upgrading a solution from scratch
  • Equip teams with the necessary tools and skill sets to run a digitalised finance function 

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