Digitization and Finance – What Should Executives Keep in Mind?

Although COVID-19 brought substantial obstacles for most companies around the world, executives of Anaplan were already prepared to make drastic adjustments in their operations. We spoke with Nadine Pichelot, Vice President of Finance at Anaplan EMEA, who understands why financial sector digitization is critical for business performance.

1. What are the factors behind the slow digital transformation of finance and why has it so far been proven to be a “slow evolution”? What makes finance a more difficult sector to digitize in comparison to other industries? 

In the era of digital transformation, it is important to note that the digitization of the finance sector is time-consuming and increasingly risky. Although digitization improves productivity and helps planning processes, CFOs risk making mistakes in financial reports. Presumably, the main reason for the slow evolution of the digitalization of finance lies behind the risk factors. On the other side of the spectrum, most industries have already adapted to sudden changes and digitized their businesses due to the competitive pressure within the sector, which forced them to adopt new technologies and agile methodology of project management. At the same time, managers need to make sure that all business processes meet the sales plan and revenue predictions. 

2. What are the key metrics that should be considered when it comes to digitizing the finance sector? What factors should be taken as a priority by CFOs?

As we know, the decision-making process in every progressive company is guided by KPIs, which assist in cost control, profitability measurement, investment flow tracking, and making products and services affordable to potential customers. Digital transformation is a long journey, which must address key business issues along the way. Basic processes, including invoices, need to be digitized first in order to solve the biggest pain points. Then finance teams can start to look at what other areas would benefit from automation.

3. Is the digitalization of finance beneficial for the companies within this sector? 

Definitely, yes. But there are some important things to keep in mind digitizing finance. First of all, it is a continuous process that requires constant updating, support, and software development. By adopting an agile methodology of project management, executives should always be prepared for abrupt changes in the future, with no exceptions. Otherwise, the whole workplace suffers from disruptions. 

To make digitization beneficial for the company, executives should keep track of the data inflow and outflow and conduct detailed market analysis on a regular basis. If both finance-related and non-financial KPIs are set correctly, such actions will help with modeling and forecasting. What’s more, CEOs should take direct governance of KPIs, onboard the necessary talent, and embark on the main business functions, such as sales, logistics, supply-chain management, and HR.

4. Is digitization becoming a crucial factor for profitability? If businesses don’t digitize, will they survive the digital revolution?

Of course, digitization is not the only indicator of success and profitability. Digitizing core business processes is already a big step forward for many companies. It is more important to adopt ‘intelligent digitization’ – anticipating the market changes beforehand and avoiding failing, reacting to these changes wisely. When the world was hit by COVID-19, many of the small and medium enterprises could not withstand the pressure and were forced to close. Those who survived did a good job by adapting to sudden changes. Implementing innovative technologies beforehand is a key to thriving! 

5. What do you do to stay current on the latest trends in the sphere of fintech? Would you advise CFOs to do the same?

I would advise being vigilant. Remember that sudden changes keep happening every day, so our job is to accept this fact. It is necessary to train the team members, keep them updated on the latest news and trends and build a solid foundation for future success. There are three levels of planning – keeping the long-term plan, midterm recaps and short-term planning. Businesses need to have the agility to alter their course of action in case of fluctuations within the market and regulations. 

In conclusion, I would like to point out that the digitization of finance is a worthy topic to be discussed. Although bringing changes to your company sounds scary, digitalization, undoubtedly, brings convenience, cost-efficiency, and effectiveness! 

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