“Why Do Chief Data Officers Fail?”
This was the headline of an article I read during the week and got me thinking since finance professionals rely so much on data too are there any signals or traps we need to be aware of so we don’t make the same mistakes.
Andrew: [00:00:00] hi everyone. And welcome to this week’s Monday memo. And for this week, I think it might be a good question to consider. What’s the difference between digitalization and digital transformation. Because that was a question I was asked recently, and also given that recent Gartner research suggests that 85% of finance teams are currently undergoing some sort of transformation.
[00:00:27] And that digital is a key element of that delivering the expected outcomes from such activities. Could be worthwhile exploring this question because I do think so people don’t get necessarily the difference between digitalization or even digitized.
[00:00:41]And the reason why I think a lot of these finance teams are exploring this digital transformation is because it allows us to be a bit more. Predictive proactive better able to anticipate the needs of our stakeholders and maybe outline a path that might not have perhaps existed to help us get there using more traditional tools.
[00:01:03] So to truly understand the digital revolution that’s upon us I guess a first stopping point would be. To maybe on the sound, the more macro elements. So the global and industry drivers behind this change in our finance teams, because the emergence of these new technologies and these re-engineered processes that we’re seeing, getting transformed are actually built upon the foundation.
[00:01:31] Of the first three industrial revolutions. And you might’ve heard us talk about this on prime on the memos, but where now Fastly acceleration through the fourth industrial revolution on the cusp of the next one, the fifth revolution. And it’s been blurring the traditional physical boundaries, more into the digital world of things.
[00:01:54] And it brings together advances in artificial intelligence, robotics internet of things, 3d printing genetic engineering, quantum computing, you name it, a lot of technologies there, and it’s all making digital, becoming fairly indispensable to our modern lives. And given on the pay, given the pace of change being brought on by these technological advances.
[00:02:21]Functions like ours and accounting and finance also must be able to exceed in the digitalization era to just simply to survive, let alone remain to be relevant in the future. And with these trends, I’ve just outlined, this increasing data availability it’s fueling not only changes in how our existing stakeholders are forming expectations about.
[00:02:46] What they expect from finance and accounting teams, but it does also mean that we’re now faced with more unique and interesting challenges to help overcome in this digital era and our stakeholders internally and externally. They’re constantly expecting us to do better. Because we’ve now got the help of this data and analysis tools and these technological advances.
[00:03:13] And if we were to put ourselves in their shoes let’s say we all probably do some sort of form of banking where a customer of a bank, but how many of us nowadays would actually consider having a bank account without. The necessary digital capabilities to allow us to transact and do what we need to do.
[00:03:29]Or even for some of us that are a bit older having a telephone service nowadays that required us to install in our homes and unlike rotary phone. I remember dialling those when I was seven, eight years of age. Like really far from where we are now. So our stakeholders given out that they have higher expectations of us.
[00:03:49] Thanks to digital. They now want more personalized services from us more Customized reporting and dashboards. They want us three more accessible like the best business partners are meant to be. And we they expect us to know more about their environment end to end provide them quicker results, like closing the books or shorter budget cycles and provide faster resolutions to their issues when we’re troubleshooting problems for them.
[00:04:16] And in fairness, most finance teams, whether we’re in small or medium or even larger organizations. We are trying to stay relevant. We’re continuously striving to find solutions to meet our ever changing stakeholders demands. But you then thinking if I’m not on that transformation or if I’m thinking digital, how do I even get started on the right digital transformation journey?
[00:04:41]Let alone ultimately transform successfully. And the words, digitization digitalization, and digital transformation, they all sound very similar and often use interchangeably, but it’s really important that we understand the distinct differences between these phases on that digital journey.
[00:05:00] So think about today, is the act of converting analog. Inflammation or, think about it like physical stuff. So like receipts you get in a supermarket or invoices you might get in the post turning that into digital data. So since the introduction of computers businesses around the world have been quickly begin with probably more quickly now digitizing processes and information.
[00:05:26] So when I started in finance, we used to scan invoices. Into dearly workflow file imaging system. So scanners they’ve completely revolutionized our P2P teams. And even when we were in audit when we started moving over to a digital audit checklist so much easier than having to manually copy information year over year really sped up.
[00:05:48]Our time. So, so would each wave of these digital capabilities? We’ve now got a better opportunity to solve some of the older problems we had or didn’t even know we had with the new technology and think about digitization as the connection between the physical world and the digital world. So it’s the first step.
[00:06:07] So once I think a lot of finance teams take some big steps on that one, then we get into digitalization and that’s the application of. Digital capabilities largely provided nowadays by software to processes and products that we produce in our finance teams. They’re going to enhance the value we deliver for our stakeholders, but also to uncover new opportunities to do things like, and it’s been used an awful lot to do this, which is reduced the cost of.
[00:06:36] Finance teams think about how easy it is now to go more global, location, better costs, locations as organizations call it. But that’s on the cost side. There’s also on the opportunity side, the value side to add more value to our stakeholders, and this is the difference of utilizing the power of data to transform a process, simply just digitalizing them and leaving them there.
[00:06:58] So digitalization helps us to enable. Better processes by, as I said, leveraging those digital technologies and the data we’ve now digitized. And I mentioned software providers. Most of them we’re familiar with already think about Microsoft and the Excel spreadsheets. Microsoft teams is becoming much more popular now.
[00:07:20] And then you’ve got the deal, the ERP systems like SAP, Oracle, the traditional players, as well as some new newer players in accounting, like Sage and zero. And. Black line. And then finally you move from digitalization to digital transformation and that’s more a coordinated change effort at scale around digitalization.
[00:07:42] It’s infuse not just in our. Accounting and finance teams, it’s through all aspects of our organizations. So even impacting our stakeholders process as well, which might involve them changing some things. So, hence we’re getting into the realms of change management, expectation management using advanced tools like artificial intelligence, which helps us identify where the best transformation opportunities and risks are.
[00:08:12] So we can be B be more engaged, focused be more agile as finance teams and meeting those customer expectations and ultimately doing more with less. I go to example of those are the three phases. Is actually how we use maps. And how our use of maps, those those charts, ancient sailors used to use to navigate the seas, right?
[00:08:33]How they’ve changed over time. So when I was much younger I used to use something called an A to Z guide with the destinations. I was looking for paper with an index and we’d go search that and it really required a bit of application of I’ll thinking, we actually did put some thinking in behind you got from one point to another and as technology became more available, those maps became digitized.
[00:08:58] And then we started having a GPS systems in our cars. Tom was a big name back in the day. Garments started sprouting up and then a lot of those maps ended up online with the likes of Google maps, Apple maps, and so on. And those navigation requirements became from that physical analog and a book eight is ed guide form to digital online version.
[00:09:19] And not only now, but the whole digital landscape of maps has been transformed because you can now have fed to you.
[00:09:27]I saw that it impacts your processes. No. Predictive. Analytics about your sort of next best movement, best way to get somewhere. If there’s delays or traffic blocking things or even if let’s say you’re a user of the underground or the Metro maps in whatever city you’re in or wherever you are, it gives you the latest timetable and might give you a better recommendation than your original route or route to to get where you want to get to faster because a services has been delayed or something along those lines.
[00:09:59] So we can then start to thank the artificial intelligence that I was mentioned. That’s been built into these new digital platforms that have transformed our processes and given us those predictive capabilities. And that’s the thing. The world is changing to keep up with this evolution around digital, and it’s actually important for each of us and and finance individually as well as our teams.
[00:10:24] To continuously think about how we can optimize our processes and embrace digital at the various different phases and those technologies that it’s going to help us with. And, most finance teams have identified those opportunities. I was mentioning about. And also are trying to transform further to finance functions to generate that new value for stakeholders.
[00:10:47] I’d like to think we’ve moved beyond most of the cost conversations now towards value, because at least with you can maximize that recast. You can only ever really minimize. So it’s a game with boundaries, the cost one word value. It’s boundary-less. And in that way we’ve become more innovative.
[00:11:04]We come more integrator within our organizations, more relevant. We end up probably delivering a more personalized memorable, maybe more meaningful experience for our stakeholders. I continue. Building even more efficient and world-class solutions. For those we work with and, as part of that journey, as much as they’re probably good. Considerations to think about in the weekend ahead, your data is why we bring on gas mentors to strengthen the number show, do those interviews with you so that they can share their lessons on how they’ve moved from the digitized to the digitalized and altered.
[00:11:39] How would their digital transformations are going so that, maybe not it straightens the curve for you a bit in terms of that learning journey, maybe accelerates it a bit, particularly it’s the hard one lessons, or maybe even the areas where you should perhaps avoid that could be rattles, that you could go down and not really get much of a return on for the investment of your time, but also, but ultimately.
[00:12:02] All this advice helps us become more influential than actually feel like we’re a bit more engaged and a bit more involved with the future direction of where not just our company is going, but also our own careers. So look, I hope you enjoyed this week’s episode. If you did, please remember to share it with your friends and colleagues.
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