Fostering a Culture of Innovation: Enabling Digital Transformation to Make Informed Decisions for Financial Leaders

Financial leadership is and has always been important in business. Using financial insights and latterly advanced analysis to make informed decisions is crucial for Digital Transformation projects. Addressing the cost base and profitability to make better decisions is paramount before expanding the digital transformation into other lines of business.

Business processes have evolved since the industrial behemoths of the early 20th Century and continue to do so. As a good example Lean Manufacturing has helped immensely to lead the way into Six Sigma methodology (measure, analyze, improve and control); to the current “Machine Age” – now incorporating Big Data, Cloud, (AI) Artificial Intelligence, (ML) Machine Learning, Blockchain and IoT (Internet of Things).

Over the last 20 years many businesses and jobs have been disrupted. New business models and jobs have not just appeared by magic; but from analysing, exploiting and capitalising upon overlooked opportunities within departments, industries and the very technologies themselves.

“40% of companies in the FTSE 100 a decade ago are no longer there.” CBI analysis of constituent data, 2019

Great opportunity now exists, but so does great risk. You can disrupt or be disrupted by leaner, more agile and innovative competitors. Before you begin disrupting the market and your industry you must ensure that you can measure all of the moving parts effectively and to do this you need a top of the class Cloud ERP (Enterprise Resource Planning) system.

Integrating external technologies, data sources and new business functions into anis relatively straightforward. A bit like building another floor onto your house, if its foundations and construction are robust you can add many more floors, balconies and outside spaces successfully.

To ensure that maximum efficiency runs throughout the organisation a culture of continuous improvement (Kaizen) is crucial to minimise casualties from rapid market changes and the underlying technology that enables them.

“Accepting change is here to stay.” Charlie Landy, FD – GSK “Global spending on technologies and services enabling Digital Transformation will reach $2.1 trillion by 2021 – double the 2016 spend.” IDC

For a tangible example of Digital Transformation in 2015, Hitachi used robot warehouse managers to oversee the human workers and it increased productivity dramatically within a very short time.

“Work efficiency improved by 8% in warehouses with the new artificial intelligence program, compared to those without them,” a Hitachi spokeswoman said.

Nascent technologies are certainly able to make a powerful impression on the workplace. Understanding the existing business processes and the inherent culture of a business are a big part of the equation and the impending implementation of Digital Transformation.

Fostering a culture of innovation is fundamental to the success of any business, especially with the digital revolution being well underway. The back office systems and architecture need to be robust and flexible enough to integrate all the legacy data and to allow for the future demands of the market as a whole.

“If an ERP project fails it is normally because there is resistance to change within the business culture. This key issue of adaptation must be managed from the highest levels of the business”. Debbie Green, VP of Applications Oracle UKI

When the leadership team embarks on “future proofing” the company – education and this culture of innovation are key to success. The back office systems must be robust and able to be adapted fast enough for any external changes that may occur in security, regulation and advanced functionality.

We were promised long ago that we would work less and improve our standard of living. In some cases this has happened and we are now able to let computers complete some of the routine tasks that humans often hate. Algorithms deal with month-end routines, purchase orders, invoice payments, payroll, supply chain management, HR functions and many other data-driven business processes. All of this extra functionality enables business leaders and specifically finance leaders to have the to make informed decisions and plan strategically for the future of the company.

Ensuring that you have a robust ERP system at the core of the business enables the finance leadership team to actively lead or support the future growth of the business.

The beauty of a robust, best of breed, ERP system is that it gives you a clear picture of your organisation’s financial position and allows you to analyse all aspects of the business – market trends, assets, people, processes and supplier relationships.

Digital Transformation projects such as implementing a new ERP system do sometimes fail. Usually this is because the people culture does not support the change. The “Big Picture” thinking is often not encouraged by others within the company. In the absence of a best of breed ERP system the CFO, COO, CTO and other key board level executives cannot make many crucial informed decisions. The reason being they don’t have access to the right information and in some cases don’t even have the time to look at it.

An innovative culture doesn’t just develop overnight – it builds, grows, flexes and changes over time. All business leaders need to encourage and support sustainable continuous change within each department and job function – ensuring the longevity of the company, the health of the environment and all the people who work there.

A culture of innovation is needed for Digital Transformation to succeed and without the support from modern finance leaders from the top down, the project will most likely fail. Making sure that your business is working with the right ERP supplier in the first place is crucial. Ensuring that expectations are clearly set-out in the project plan will considerably assist a successful ERP implementation.

“Today, ERP systems are critical for managing thousands of businesses of all sizes and in all industries. To these companies, ERP is as indispensable as the electricity that keeps the lights on.” Oracle – What is ERP?