10 tips to help digitally transform your finance
Digital transformation can yield big benefits for businesses but, with some research suggesting failure rates as high as 84%, how can you make sure your digital transformation is a success?
James Hunt, business advisory services partner at Sagars, an AAB Group company, offers his advice.
While failure doesn’t always mean a project is completely abandoned, there are costly delays and wasted opportunities that can be avoided by getting good advice before you start. Here are my top ten tips to help you make a success of digitally transforming your finance function:
1. Be clear on your scope
Scope creep is a common issue, so make sure you start your project with clear aims and outcomes and resist the urge to add on ‘just one more thing’. We help clients to scope aims around things like achieving efficiencies, improving the accuracy of their data, and generating real-time financial information to power better decision making.
2. Take a ‘goldilocks’ approach to choosing your tech
You need the right tech to meet your needs. Too big and you’ll only use half the functionality you’re paying for, too small and you’ll end up repeating the exercise in a couple of years. I work with a lot of manufacturing companies who need integrated stock management and purchase order systems, as well as the usual accounting functions. This can make choosing the right tech a challenge but getting it right at the start is a game-changer.
3. Future proof your system
Choose a system that has the functionality and upgrade options to grow with your business. In a worst-case scenario, a system can become obsolete quickly, so make sure you leave your options open and check the continuing availability of updates and support.
4. Choose the right implementation partner
If you need someone to project manage the implementation for you, do your research, check they have the right credentials and sector experience, and always ask for references.
5. Bring your team with you
Don’t underestimate the impact of digital transformation on your team. Make it a priority to keep them informed. Better still, involve them in the transformation from the start so they can
contribute their knowledge and buy-in early.
6. Consider additional integrations
Think about how your other core systems can be integrated with your finance function. For example, most modern accounting systems can integrate with a customer relationship management (CRM) system – this might provide an opportunity to synchronise marketing and customer support with job management and finance.
7. Set a realistic budget
Base your budget on market research, be realistic and build-in contingency. Importantly, don’t overlook the cost savings you stand to gain from the transformation when you’re appraising the project. Larger businesses can routinely spend six figure sums on implementing bespoke digital accounting systems but technological advances over the past decade have brought advanced systems within reach of small and medium sized businesses too.
8. Timing is everything – choose the right implementation date
Most system implementations will work best either at a year-end or a VAT quarter end because you can easily check that existing data and balances have converted accurately.
9. Protect your data
It’s good practice to run your new system alongside your existing one during testing, providing a useful safety net and helping you ensure your new system is working. You should also consider how data is secured and backed-up to minimise the risk of data loss during the transformation process.
10. Prepare for the unexpected
Problems often arise during transformations. If you embark on your project with this in mind, you’re more likely to be able to overcome any issues, rather than getting bogged down by them.
Professional support for your transformation
The magnitude of digitally transforming your finance function, together with the time and cost involved, can make it tempting to try and make do with what you already have. But, in my experience, this usually results in outdated systems, workarounds, and poor efficiency.
One good way to start your transformation is to talk to your accountant. They should be able to advise you on industry specific technology, best practice, and appropriate controls for your business.
Another good option is to have your accountant conduct a systems and process review to highlight any issues with your existing finance function and suggest worthwhile improvements. Even if you’ve already changed your finance function, an independent review of your new system, through sample checks and system interrogation, can be a good way to identify further improvements and ensure you’re getting the best from your investment.
By planning ahead and seeking professional advice, digitally transforming your finance function can enhance your operational capabilities, add significant value to your business and help you to achieve your wider goals.
James Hunt is a Business Advisory Services Partner at Sagars, an AAB Group company.