Digital transformation is changing: Where is finance going?

Digital transformation, the term has been with us for years. It is a term that is no longer new to many companies and professionals. However, the digital transformation itself also ends up being a transformation. Where before we immediately thought about switching from analogue to digital work, now we are talking about completely different changes. Today, transformation is all about the increasingly intelligent and data-intensive technologies that are propelling today's finance professionals into the future working in a data-driven business.

Shifting focus to innovation

Digital transformation is considered a new era. In the old days, the world depended on farmers who planted and harvested throughout the year. This continued for decades until the advent of the industrial revolution. Old jobs disappeared and new ones emerged. Think light bulbs, computers, and then cell phones and even smartphones. It changed the way we think and work. It is good to note that Australian companies are always on the lookout for new things and trends and this means that, especially now, these companies can innovate so quickly. But how does Australian business innovation work? And what are you doing to change the focus on innovation, also within finance? There are basically 3 ways to do this:

• Start small: from a small idea to finally making it big. Of course, improving the world cannot be done in one day, but taking small steps to achieve this big goal.

• Take the beaten path: Most innovation comes from things you already know. Innovation is often not about new ideas, but about how existing ideas are handled in new or different situations.

• Segment targeting: Don't market an innovative product or service to the majority, but make it irresistible to a small group of people.

By continually keeping pace and innovating with the changing world, Australian companies stand out. But how does this work in practice?

Data makes companies even more valuable

It is important to highlight that less than half of financial professionals in the world are not at all concerned about digital transformation. Therefore, the vast majority of global financial companies are working on digital transformation.

Digital transformation is no longer about digitizing processes, but about how we can work with all available data. There are countless possibilities in companies when data is brought together in a central location. Almost all departments collect data, such as Sales, Marketing, IT and Finance. These departments collect customer and market data. By connecting all this data, it is possible to make predictions based on the past.

Companies use data and marketing tools to collect paid invoices

The data is also highly relevant for the financial department of companies. With the data it is possible to know why certain debtors do not pay the invoices. As a financial professional, you must constantly work to ensure that the debtor always feels committed to repayment. Artificial intelligence and machine learning in companies play an important role in this, as all departments work together and data is available and reliable. As well as the correct use of marketing tools for the payment of invoices.

It is about stimulating the senses. Another practice that stands out from companies is not treating all customers the same way, but approaching them individually. After all, you shouldn't approach a satisfied customer the same way as an angry customer. Adapt the approach to the person. After all, this is a characteristic of the Marketing department.

Agile thinking to innovate

To realize all these types of innovations, such as the finance department, companies need to be agile and flexible. But how do they become an agile company? Agile thinking and agile working are two completely different aspects. Agile thinking is about how you see activities within the company, while agile work is about work processes. To be able to think this way, 03 aspects are very important: change, focus and collaboration.

Once these 03 pillars are in balance, your company can say that it thinks Agile. But what do these 03 aspects mean?

Change is the only constant in the world. Companies are starting to understand and accept what this means: they need to be in control of everything. Which brings you directly to the next aspect. We live in constant rush, both in business and in private life. We take on many things at the same time, but we forget that these too must be completed. First, make a list of priorities and focus on what you are doing now and complete it successfully. This refers to collaboration as the third and final aspect of an agile way of thinking. This is mainly due to diversity. This is extremely important to be able to innovate. Working together with different people who have different points of view and ways of thinking helps a lot.

Companies are not trapped by their own thought patterns and their own truth. Agile thinking is now required to solve complex problems. Simple problems have already been solved and automated. Simple things are solved with software, but you're left with the complex problems. Thinking agile and acting agile is the solution. As? Break the issues down, prioritize them first, wrap them up, then move on to the next step. So for sure, just like Australian companies, yours will also continue to work on innovation.

The article has been written by Lenildo Morais, Master in Computer Science, University Professor, Researcher and Project Manager