Business Study Notes
Digitalization in business consists of combining digital technologies that join together to improve business performance. All trades and processes are impacted. What about financial departments?
The consequences of digitalisation for the company
It’s a continuous revolution that:
- Opens on new channels, new products, new working methods. This changes the hierarchy of values in the company. We must anticipate more and adapt quickly.
- Increases productivity through the use of instant data management tools, big data tools … These tools increase quality (especially by reducing processing times) and reduce costs.
- Changes the value chain in relation to know-how: new business processes allow more fluidity, specialization, cooperation with customers.
New tools at the service of financial departments
The financial departments equip themselves with digital tools internally:
- Data management tool for cross-referencing accounting data with management data
- Mobility tool to provide managers with dashboard on tablet or mobile.
- Collaborative work tool to make several services work on the annual reference document or on the budget.
- Robot to automate the preparation of management control statements by going as far as explaining with a narrative.
- Artificial intelligence to identify rules to better forecast turnover or, to identify weak signals to anticipate a delay or failure to pay
- Cyber security tool to perform multiple tests when entering a password
When they do not find the tools on the market, they resort to the competition of start-up, for example for:
- Aggregate accounting, management control, and cash flow data to gain real-time insight
- Develop predictive analytics to increase turnover and reduce costs
The consequences of digitalization for financial departments
The digitization of the financial department increases the added value of the functions, because a certain number of tasks without added value can be deported on an external platform. The financial department then becomes a data center. It can strengthen the proximity with the general management to validate the alignment of the company with the strategy.
This is not simpler to decide because it is more complex. All the tools at his disposal help to prepare the decisions, to turn towards the anticipation of scenarios. It is still necessary to choose the right tools and invest.
Investing in new information technologies (NTI) requires reallocating financial resources, without stopping investing in the rest. This complicates the financial forecasts.
Rental, which gives access to an external platform, is inexpensive, and the company pays for the use. An ROI can be calculated against the investment in an in-house solution.
The finance department will always need an accountant, management controller and treasurer, but also a specialist in big data. The desired profiles could evolve towards people capable of realizing the fundamentals of the profession, but also to lead the digital transformation by accompanying people in the company on these mutations. Learn more about such business financial terms by visiting Business Study Notes here http://www.businessstudynotes.com/. Business Study Notes is all about business terms, business education, and tips and tricks, especially for entrepreneurs it is a great platform.