Digitalising the finance function: four potential quick wins

While a wholesale upgrade may have little appeal in these uncertain times, many CFOs have some far less drastic options open to them that offer plenty of bang for their buck
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For most finance chiefs, a recession won’t be the ideal period in which to attempt a full-blown digital transformation. They may be more inclined to go for some quick wins instead. For a business that may already have entered survival mode and isn’t looking to fund potentially disruptive IT upgrades, the ideal digitalisation project will offer a clear return on investment and won’t require key processes to be completely rewritten.

But where might such straightforward opportunities exist, especially among the many finance teams that have already adopted plenty of digital tech in recent years? Here are four varieties of low-hanging fruit that CFOs could pick with relative ease.

1. Get your head in the cloud

“Technology has been the cornerstone of our function since day one.” 

So says Sam Feller, director of finance and operations at Popcorn Shed, a London-based producer of gourmet popcorn. His team uses digital tools to “manage almost every financial process, from accounts and business reports to inventory and replenishment”.

Like many firms that rely on the food supply chain, Popcorn Shed runs on wafer-thin margins. With a recession looming, Feller and his colleagues are therefore seeking to “cut expenditure where we can. The reality is that some of our digitalisation projects will be paused or scaled back.”

The most straightforward way to obtain tangible improvements quickly is to implement digital solutions in manageable steps

At the same time, they must ensure that their processes are as smooth and cost-efficient as they can be, which means keeping the tech up to date. To this end, the firm has found a new model that reduces its initial outlay, keeps a lid on overheads and ensures that the business can continue operating as normal, even as the economy deteriorates. 

“We’ve found that cloud-based platforms with a subscription model can be a useful way to introduce technology without the need for sweeping change,” Fuller says. 

Popcorn Shed has adopted the accountancy platform Xero to manage cash flow, enabling it to make more informed choices about when and where costs can and should be reduced. 

As Fuller says: “You can’t put a price on having real-time access to accurate numbers.” 

2. Empower staff on the front line

In his capacity as BT’s chief procurement officer, Cyril Pourrat oversees £14bn-worth of purchasing activity. But, just like smaller businesses, even the telecoms giant must consider how to take smaller steps in pursuit of a broader goal. 

Pourat had been in post for a matter of days when he came up with the idea that would give birth to the BT Procurement Garage. Under this initiative, the company partners with innovative startups to come up with new solutions to some persistent procurement problems. The scheme enables BT’s front-line staff to work directly with these firms’ technical experts.

“The idea was to empower our team,” he says, adding that the rationale was clear: people on the front line of the business know what these problems are and which areas of the business are worst affected, so they’re best placed to help develop the solutions. This approach has worked so far, according to Pourat.

“The beauty of any digital tool we’re using on the procurement side is that it’s super-easy to plug into our existing systems and to get the maximum value out of it,” he says. “We want to try fast, fail fast, learn fast and digitise.”

3. Focus investment on persistent niggles

If there’s a chronic process bottleneck in your business that’s causing unnecessary disruption and inefficiency, it’s likely that there’s a digital solution somewhere out there for it.

The accounts payable team at Wessex Water used to have to phone the company’s suppliers to verify their details each time their invoices were ready for payment. Apart from the fact that this process was prone to transcription errors and even security breaches, it was hugely inefficient. Each phone conversation could take up to five minutes, while 20% of attempted calls either failed to connect at all or dropped before all the required information was exchanged. The shortcomings of the procedure meant that a significant number of payments didn’t get through to the intended recipient. 

To address this clear systemic problem, the company set up a straight-through processing service that has digitised a key part of its finance function, removing the laborious stage of phoning suppliers frequently to double-check their details. Now it’s all done automatically, with the aid of an outside partner. After approving a supplier’s invoice, Wessex Water sends a payment instruction to this automated system, which authorises the transfer of funds and executes the transaction. 

4. Start small and self-serve

Enigma Interactive is a consultancy with more than 25 years’ experience of helping organisations ranging from National Grid to the BBC through digital transformations. Its owner, Steve Grainger, would advise any firm embarking on this process not to get too ambitious too soon. 

We want to try fast, fail fast, learn fast and digitise

“Don’t overcomplicate things,” he says. “The most straightforward way to obtain tangible improvements quickly is to implement digital solutions in manageable steps that streamline business processes rather than reinventing them wholesale.”

One simple way to start? Develop digital applications that enable customers to serve themselves when they interact with your business. This can make a huge improvement to the efficiency of your finance function. 

He suggests installing a smart web or app interface that lets customers “input and manage the information you need from them, then connecting that solution to a back-office system that enables your team to manage responses and move the job through its various stages. This will immediately deliver a host of benefits. It’s quicker and more convenient for customers. Also, the intelligence built into such systems can take away much of the routine checking that may otherwise have to be done manually.” 

Implementing this kind of tech shouldn’t be hugely disruptive to the organisation or its customers. It can also be wound back quickly if it’s found not to work. 

“The net result is that services can be delivered up to 90% more efficiently,” Grainger says. “And that should free up your smart humans to focus on more complex issues where their skills will add greater value.”