86% of finance execs expect digital transformation to have high impact

Dive Brief:

Digital transformation can enable savings of up to 42% quarterly for most finance organizations by driving "world-class" levels of efficiency, a study by research firm The Hackett Group found.
Because technological advancement serves a cost-saving purpose, the onus is on finance leadership to lead implementation efforts, the study said.
"Through digital transformation, [companies] can improve efficiency by nearly 20%, making them 60% more efficient than typical finance," the study said. Putting digital changes in place as they are developed can forge the path toward "further digital transformation initiatives, engage in more value-added activity, or fuel company growth."

Dive Insight:

In the study, 86% of finance executives said they anticipate digital transformation to have "a high or very high impact on finance's performance over the next two years." A similar percentage said digital transformation will have a "substantial influence on their operating model."

The Hackett Group's research emphasized that, in part due to changes driven by digital transformation, new finance organizations are able to surpass "inward-focused" metrics of efficiency and effectiveness, which allows them to translate their internal tech use and optimization into positive client-facing endeavors.

Businesses can expedite their digital transformation programs by using robotic process automation (RPA) and similar technologies. Embracing smart automation can "reduce manual work and redirect capacity to more pursuits like leveraging advanced analytics to provide management with informed insights for decision-making," the study said.

The research includes a list of company issues. One assertion is that "over half of typical finance organizations" will fall short in "effectively anticipating and responding to business demands."

Stakeholders’ perceptions of finance’s ability to effectively anticipate and respond to business needs.

The Hackett Group, 2019

Additionally, world-class finance organizations tend to spend more time considering possible future actions than reviewing historical data, making them more of a strategic partner with the organizational leadership.

Digitization is imperative, and the competition to digitize will "shape the business model of the future," the study concluded.