# Digital transformation, finance, and world-class performance in 2017 and beyond Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2018-01-31 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: World-Class Finance Organisations: Achieving Superior Meta Description: Discover how world-class finance organisations achieve efficiency levels 45% above peers with digital transformation. Learn more from The Hackett Group. Tags: featured Tag URLs: featured (https://financedigest.com/tag/featured) URL: https://financedigest.com/digital-transformation-finance-and-world-class-performance-in-2017-and-beyondhtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/fd310118-7-1736843023055-compressed.jpg) _By **Gilles Bonelli**, Associate Principal,_ [The Hackett Group](http://www.thehackettgroup.com/) ![Gilles Bonelli, Associate Principal, The Hackett Group](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/gilles-bonelli-1736843022991-compressed.jpg) Gilles Bonelli, Associate Principal, The Hackett Group World-class finance organisations – according to “ [Raising the World-class Bar in Finance Through Digital Transformation](https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fbit.ly%2F2sxPKVm&data=01%7C01%7Cgbaker%40thehackettgroup.com%7C76b528baa6ac45de5c9708d4dff11b99%7C9a21f1283011452ca6829b884467518d%7C0&sdata=%2BrWhXsz3azLlnL8QM2OJQ81w74ErEVbQQfujkM8fWpw%3D&reserved=0)”, a new research report from The Hackett Group –  demonstrate efficiency and effectiveness levels far superior to their peers. At the highest level, they operate at 45% lower overall cost than their peers. They also spend 24% less time collecting and collating data, enabling them to spend 75% more time on analytics.  They enjoy error rates that are 66% lower and they pay invoices within terms 95% more often than the rest. In addition, they are much more likely to emphasise financial and non-financial KPIs in their performance scorecards, with 85% using a more [mature performance](https://www.financedigest.com/strong-performance-of-investec-lowes-structured-product-maturities.html "Strong performance of Investec / Lowes structured product maturities") scorecard that incorporates talent development. In achieving these results, technology plays a key role, Yet world-class finance organizations actually spend 61% less on technology than their peers. This is because world-class finance organisations use fewer systems, which are better integrated. In addition, these [finance organizations are leading the way in implementing digital transformation](https://www.financedigest.com/digital-transformation-for-the-world-of-finance-the-rise-in-collaboration-tools-and-saas-applications.html "Digital transformation for the world of finance: The rise in collaboration tools and SaaS applications "), implementing integrated cloud-based applications, advanced analytics, robotic process automation, and other next-generation technology. [Digital transformation is a high priority for all finance leaders today](https://www.financedigest.com/evolution-not-revolution-digital-transformation-today.html "EVOLUTION, NOT REVOLUTION: Digital transformation today"). The Hackett Group’s 2017 Key Issues Study showed that 97% of [finance leaders surveyed think digital transformation](https://www.financedigest.com/why-digital-transformation-in-finance-is-crucial-for-post-lockdown-success.html "Why digital transformation in finance is crucial for post lockdown success") will have a step-change impact on organisational performance; 91% believe it will significantly affect their service delivery model. The potential for [digital transformation](https://www.financedigest.com/apis-are-powering-the-acceleration-in-digital-transformation.html "APIs are powering the acceleration in digital transformation") to improve efficiency and business effectiveness is significant. The Hackett Group’s research has found that typical finance organisations can lower process costs by 35% through [digital transformation](https://www.financedigest.com/digital-transformation-in-banking.html "Digital transformation in banking"), enabling them to bring process cost to levels close to that of world-class finance organisations. To successfully implement this strategy, The Hackett Group recommends that [finance organizations focus on digital transformation in these five key](https://www.financedigest.com/world-class-finance-digital-transformation-and-analytics-based-decision-making-among-key-imperatives-for-creating-finance-agility.html "World-Class Finance: Digital Transformation and Analytics-Based Decision Making Among Key Imperatives for Creating Finance Agility") areas. 1. **Modern digital architecture** Modern digital architecture relates to the integration of information flows, [software applications and infrastructure within a business](https://www.financedigest.com/how-to-choose-the-right-software-architecture-for-your-business.html "How to choose the right software architecture for your business"). Where finance is concerned, this is largely about transactional systems, linking to the ERP layer, [data warehouse layer](https://www.financedigest.com/three-layers-of-hybrid-workforce-data-for-financial-institutions.html "Three Layers of Hybrid Workforce Data for financial institutions"), and data marts layer (including, planning & consolidation software), and finally any data presentation layer (i.e. analytics layer). Where new software are being implemented, cloud-based [options are being considered](https://www.financedigest.com/cryptoverse-is-bitcoin-out-of-the-woods-consider-the-options.html "Cryptoverse: Is bitcoin out of the woods? Consider the options") as they are often more cost-effective, and easier to implement Managing data quality emerges as the [critical success](https://www.financedigest.com/five-critical-tips-to-create-a-successful-start-up.html "Five Critical Tips To Create A Successful Start-up") factor of modern digital architecture, and therefore should be addressed thoroughly by any modern digital architecture. 1. **Smart automation** Increasingly we also observe that resource-constrained organizations may turn to smart automation, specifically robotic process automation (RPA) tools to undertake routine, repetitive activities, and specialist [applications to manage non transactional finance](https://www.financedigest.com/how-application-management-can-help-tackle-the-finance-industrys-carbon-emissions.html "How application management can help tackle the finance industry’s carbon emissions") processes. [Robotic process automation replaces time-consuming human](https://www.financedigest.com/human-robotics-will-robots-replace-bankers.html "Human Robotics: Will Robots replace Bankers?") labour with machine labour. The [finance team sets](https://www.financedigest.com/uks-finance-minister-sets-out-new-economic-approach-to-finance-bosses.html "UK’s finance minister sets out new economic approach to finance bosses") predetermined rules for a task, and through RPA, the computer follows these rules to perform it, as a human being would through a logical sequence. Cash application, for example, can now be conducted automatically: the robot identifies remittance advices according to specific keywords and reformats them according to requirements before posting them to the general cash ledger. The finance team can then focus on more [important activities](https://www.financedigest.com/tissue-cultured-date-palm-market-pegged-at-us-4-5-bn-value-pool-in-2027-import-export-activities-take-a-downturn-amid-coronavirus-outbreak-future-market-insights.html "Tissue Cultured Date Palm Market Pegged at US$ 4.5 Bn Value Pool in 2027; Import & Export Activities Take a Downturn Amid Coronavirus Outbreak: Future Market Insights") that require human intervention. 1. **Analytics-driven insight** The decision-making capacity of the [finance function is being enhanced by big data and advanced analytics](https://www.financedigest.com/the-future-of-fintech-robo-advisers-analytics-and-diy-finance.html "The Future of Fintech: Robo-advisers, Analytics and DIY Finance"). The combination of [data](https://www.financedigest.com/how-to-drive-a-data-culture-in-the-finance-industry.html "How to drive a data culture in the finance industry") and the right tools makes it possible to create more accurate predictive models, and can also automate the gathering of historical data, segmented external data, and publicly-available operational and financial data, which can all be factored into the analytical process. The application of advanced [analytics to credit management,  for example, can provide companies with better information regarding the likelihood of customer default](https://www.financedigest.com/enhancing-credit-exposure-management-through-graph-analytics.html "Enhancing Credit Exposure Management Through Graph Analytics"). Using this capability in tandem with recovery rate and exposure assumptions, creditworthiness can be established easily – allowing finance teams to make more informed lending decisions. 1. **Cognitive computing** Cognitive computing relates to self-learning [systems that employ data](https://www.financedigest.com/interoperability-of-data-to-accelerate-the-whole-slide-imaging-systems-market.html "Interoperability of data to accelerate the Whole Slide Imaging Systems Market") mining, natural language processing, and pattern recognition to imitate human behavioural processes. The use of cognitive computing in connection with the work of finance functions is limited, but is [gaining traction](https://www.financedigest.com/carmine-color-market-will-gain-traction-at-7-9-amid-growing-preference-for-natural-food-ingredients-fmi.html "Carmine Color Market Will Gain Traction at 7.9% amid Growing Preference for Natural Food Ingredients: FMI"). For instance the ability to detect correlation between potential business drivers and outcomes, is already being used by some advance organizations in order to improve the quality of their financial [forecast](https://www.financedigest.com/forecast-based-financing-for-smes.html "Forecast-based financing for SMEs"), with the dual benefit of removing human bias and driving a more efficient process. 1. **Digital workforce enablement** [Digital workforce enablement encompasses tools and platforms that boost knowledge creation and distribution – as well as the transfer of knowledge required to use those tools and platforms effectively](https://www.financedigest.com/cost-effective-digitized-innovation-to-drive-the-immune-thrombocytopenia-treatment-market.html "Cost-effective Digitized Innovation to drive the Immune Thrombocytopenia Treatment Market"). Using [social media](https://www.financedigest.com/elon-musk-goes-viral-on-chinese-social-media-with-ancient-poem-post.html "Elon Musk goes viral on Chinese social media with ancient poem post") and other communication tools, the organisation can foster cross-functional global collaboration which transcends hierarchies. The use of these tools is often related to the emergence of “tribes,” groups of engaged individuals across teams, tasked to contribute to solving both strategic and tactical challenges that impact the enterprise. Creating a nurturing, open, environment that is conducive to teamwork and aligned to company priorities is also the priority of crowdsourcing tools, for example, which make it simple to gain rapid insights when [urgent questions need](https://www.financedigest.com/ftx-collapse-shows-urgent-need-to-finalise-eu-crypto-rules-says-european-commission.html "FTX collapse shows urgent need to finalise EU crypto rules, says European Commission") to be raised. These five considerations should be prioritised carefully as part of any digital transformation roadmap for finance, and readers should feel free to contact the authors of this article to discuss them further. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---