Author: Laura Bulmer |
On: Tuesday Jun 04, 2024
There is an ongoing question about the best way to tackle process improvements in finance departments; is technology the most important factor? Or is it the people? Does one outweigh the other? Or is a good balance of both key?
In our role as document management experts, we have found that technology is often at the heart of business process innovations. But the ideas for these innovations need to be driven by someone internally. Here we will talk about the benefit of these projects being driven by tech-focused finance leaders, pushing finance departments to achieve more.
In our experience, the most successful process improvements for any department will always involve staff and / or leaders as they are personally invested in improvements.
In an era where technology plays a crucial role in driving efficiency, innovation, and strategic decision-making, there is heightening pressure on finance leaders to improve their technology knowledge.
Put simply, for most organisations, a technology focused finance leader is the future.
Finance leaders have the capability to combine their understanding of the businesses’ specific finance processes and needs with overall business strategy. They are involved in finance processes but not “too involved”, and will often seek data-driven insights.
Tech-savvy finance leaders can leverage advanced analytics and data science to gain deeper insights into financial performance, market trends, and operational efficiencies. Utilising tools like predictive analytics and AI, they can forecast future trends and make proactive decisions to steer the company in the right direction.
With economic struggles and consistently high costs putting pressure on businesses, finance leaders are looking at what factors they can control to make improvements which drive down costs. Operational efficiency, enhanced productivity and growth all top the list, and tech-focused finance leaders will be using technology to help them in specific areas:
By embracing automation technologies such as machine learning and RPA (Robotic Process Automation), finance leaders seek to streamline routine financial processes, reducing manual errors and freeing up time for strategic tasks.
They are invested in this change as it directly impacts their team and their ability to process high volumes of incoming documents.
Unlike the normal reactivity of IT staff or providers, tech-focused finance leaders will proactively drive efforts to optimise the way their ERP systems and financial management software can lead to more efficient financial operations and better resource management.
Software integration can often be key, linking separate business systems together, ensuring information is shared across processes and departments. Data silos are removed, and accuracy is improved, creating information that can be relied upon for future decision-making.
Tech-focused finance leaders are easily able to identify opportunities to reduce costs through technology. Optimising data capture to reduce data entry is one area that can have huge benefits.
Incorrect data entering any system through unintentional human error can have huge consequences and can often be time-consuming to trace. This puts a strain on processes and productivity suffers.
Other ways finance leaders explore cost reduction include finance system integration with other applications, procurement processes, improving supply chain management, and reducing waste.
Advanced financial software can provide real-time monitoring and control over budgets and expenditures. This type of software enables comprehensive analysis of financial statements to help identify risks, which is a key objective for finance leaders.
Once risks have been recognised, the potential impact of these risks can be assessed, and plans can be put in place to mitigate issues. With better insight, informed decisions can be made on strategy and investment options.
Tech-focused finance leaders can lead digital transformation initiatives. Assessing the market to see what technology can offer. Finding the right solution to fit with organisational values, business models, and staff.
Integrating the right technology across the organisation will first mean assessing problems and talking with colleagues to identify bottlenecks. This will help to drive innovation and maintain a competitive edge.
By leveraging technology, finance leaders can explore and implement new business models such as subscription services, digital platforms, or fintech (financial technology) innovations.
The use of AI is ever evolving and it’s likely that tech-focused finance leaders will want to embrace its use to stay competitive. AI tools which use machine learning can recognise patterns and trends in financial data to assist with decision making. Finance professionals can use this data, alongside their knowledge of market trends, world events, and legislation to make the most appropriate decisions.
Certain types of software mean that tech-savvy finance leaders can better collaborate with IT and other departments, ensuring that financial strategies are aligned with overall business goals and technological capabilities. The collaboration between invested finance staff and IT staff underpin the most successful process improvement projects.
Finance leaders should be very familiar with regulatory compliance. Leveraging technology to maintain compliance provides peace of mind that all is in order. The continuous tracking and monitoring of financial documents ensures accurate and timely reporting. This all reduces the risk of non-compliance and associated penalties without jeopardising efficiency.
Tech-focused finance leaders represent a strategic advantage for businesses aiming to thrive in a digital world where pressures are bigger than ever on businesses to reduce costs. Their ability to harness technology for financial management, decision-making, and strategic innovation can lead to significant competitive advantages.
However, businesses must also address the challenges associated with this approach, including continuous skill development, investment in technology, and effective change management. The rapid pace of technological change requires finance leaders to continuously update their skills and knowledge. This necessitates a commitment to ongoing education and professional development.
Overall, the trend towards tech-focused finance leadership is likely to continue as organisations seek to leverage technology for improved financial performance and strategic growth. If you'd like to discuss any aspect of digital transformation, or adopting better document management processes, get in touch.
