Digital Transformation: A Comprehensive Guide For Success

Today, we live in a hyperconnected world where technology is at the forefront of everything we do. Artificial Intelligence and technological advancements have entered workplaces at pace, revolutionising how organisations and employees operate daily. It begs the question for businesses are you moving with the times and reviewing your current systems and processes to analyse what can be optimised or automated? Are you running away scared? Or have you never even heard of a digital transformation?

Due to the busy working week, it can feel like there’s not enough time to review current processes and finance systems to test their effectiveness. While there’s all this exciting technology in existence ready to support and help make working more effective, time is still spent trying to complete the “day job” and finish month end before the deadline which can be challenging if automation isn’t utilised and there is a lot of manual work required.

Making the time to invest now, is important so you can reap the benefits of having the right technology and processes in place to help your business to grow. Having accurate data insights will enable you to produce meaningful reports to help the strategic decisions that are being made across your business.

That’s all fine and well saying that you need to review your processes but what does that look like? How do you break down the processes to highlight small changes with big impacts to make such improvements less daunting?  What do you need to look out for during that review? In our guide to digital transformation, we’ll be discussing how you know if it’s time to take that step, what to look for when conducting a review and the benefits that can be gained from undertaking a digital transformation.

HOW DO I know if it’s time FOR A DIGITAL TRANSFORMATION?

There is always room for improvement. Reviewing current systems and processes isn’t always about implementing a completely new system. Why? Because sometimes that can be a huge cost without knowing if you’ll see a return on that cost. Instead, reviewing systems, current workflows and processes can help you to identify pain point areas that can be improved upon without completely reinventing the wheel. It might show you that there’s no need for improvement or it might show you where you can use integrated technology to link to the current systems you have to solve a time-consuming task.

• Manually entering invoices without any automation.
• Not using bank and supplier rule capabilities.
• Having varying levels of how invoices are being initially received and stored.
• Manually ticking through a supplier statement reconciliation to determine missing invoices.
• Lack of integrated BACS payment runs and to avoid duplication of payments to suppliers.
• Not keeping track of profitability in specific areas of your business as profitability is only reported at a combined view.

There are basic solutions to the above pain points that could be integrated into your current workflows which could solve an issue you’re having at a fraction of the cost.

What am I looking for when conducting a review?

Reviews aren’t only about identifying what’s wrong with the current systems but also opportunities for improvement and ensuring systems align with the business’s current and future needs.  The goal is to identify gaps, inefficiencies and potential risks while exploring opportunities for optimisation.

1. System functionality and usability

Simply assessing whether the current systems meet all functional needs and if it is user-friendly. With older systems, you find there is the risk of having constant delays with saving files, opening large reports and navigating around an old system, which could be improved upon to reduce the time spent on day-to-day tasks. Furthermore, keeping on top of new feature updates is vital when the technology marketplace is constantly growing and technology providers are trying to separate themselves from their competitors.

2. Process efficiency and automation

Your systems across the business must communicate. You might have good functional systems in place across your business but if they don’t work in tandem and are not linked in any way, manual data entry opens the door for human error. It also means that your data is only up to date when the process of converting all information from one system to another is undertaken.

Furthermore, as noted above, manual tasks including inputting invoices, looking for expense receipts, having no structured approval process, and preparing management reports in Excel, just to name a few, are tasks that in silos might not seem time-consuming however, when you add them all up your team might be spending an obscene amount of time on them when it’s likely that there’s technology available to free up this time. Spending the time to bring your processes into the digital age might benefit more than just your organisation, it might also benefit the development of your people at the same time.

3. Compliance and security

Ensuring systems comply with relevant regulations and robust security measures are in place is a vital check.

4. System Vs Process

Identifying the need for a nice new shiny financial system that has a vast list of features, which probably isn’t all used, doesn’t always solve the problem at hand.  Focussing on the process as well as the system is essential.  Therefore, concentrating on where the individual involvement is and how they use the system rather than the system choice itself should also be considered.

What are the benefits of Undertaking a digital transformation?

Technology can reduce the time spent on day-to-day tasks, utilising automation to increase efficiencies and gain greater productivity. However, those aren’t the only benefits of bringing technology into your business. Some others are:

• Enhanced data accuracy and real-time insights can lead to increased cash flow as you will have more awareness of your financial performance and allow you to predict more easily the best time to invest in capital expenditure for example.
• Improvement of customer experience. For example, if you have a more structured process of preparing and issuing quotes promptly could allow the acceptance rate to be increased allowing increased revenue.
• Scalability and flexibility– Having the transparency of data through effective management reports allows granular data to be analysed, and focuses the mind on operational areas that may need to be improved on, for example, if a certain branch isn’t achieving its targets.
• Better collaboration and remote accessibility have certainly evolved over the past few years and now more so than ever being able to access data anytime, anywhere is essential.
• Reducing debtor days – Having automated processes in place surrounding credit control can allow invoices to be converted to cash quickly.
• Reduction of cash held in stock – Instead of just relying heavily on stock takes at year-end and checking what is in the warehouse, having a sophisticated stock management tool integrated into sales and purchases allows the reduction of purchasing of items that aren’t needed.
• Cost savings in the long term – investment of time and resources at the initial implementation stage can lead to bigger and more significant long-term savings.

Our team have a wealth of experience supporting businesses with their digital transformation so they are one step closer to adopting AI more frequently in the workplace. Our approach to facilitate the review process and recommend potential improvements can highlight key areas that may not have been considered when being too involved in the day-to-day running of the business.

Discussing with both bookkeepers to business owners allows interpretation of what is important for different individuals and having third-party advice on this can be valuable. Implementing new financial systems without conducting a full and thought-out review can be costly and can cause disruption in the running of the business.

If you have any queries on entering a digital transformation please do not hesitate to get in contact with Lisa Smith, a member of our digital advisory team, or your usual AAB contact.

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