As finance chiefs take the reins on digitization, they’re beginning to shift their mindset and adjust the goal posts, as simply getting rid of paper or automating a workflow is no longer enough to define success.
“When I think about digitization, it’s not just paper to electronic,” he said in PYMNTS’ latest Voice Of The Digital First CFO discussion. “It’s now ‘How can we take an electronic process, and make it even better?’”
McLaughlin acknowledged that this is no easy feat — for any CFO — especially at a time when these professionals are tasked with wearing many more hats within their organizations. But he said approaching what can often be an overwhelming objective with a business intelligence mindset can help finance leaders establish a clearer strategy to adopt technology, deliver valuable, actionable results, and prove that digital transformation was worth the investment.
Checks and paper are a rarity in FortisPay’s back office, but McLaughlin noted there is plenty of space to improve upon existing digital workflows. Today, the agenda is focused on migrating to a new enterprise resource planning (ERP), and as he explained, the project isn’t just about shifting from one platform to another.
“We’re moving to a new ERP system, and along with that, we’re taking the opportunity to take a lot of our processes around AP [accounts payable], AR [accounts receivable], and utilizing more powerful tools to make them easier,” he said.
This transition aims to enhance automation and simplify key workflows, like supplier payments. At a deeper level, it also seeks to strengthen the back office’s data strategy, setting the stage for consolidated and unified information that traditionally enters the enterprise from various platforms and partners and in a range of formats.
This focus on data is paramount for McLaughlin, who emphasized his passion for data and business intelligence. Streamlining data within a general ledger establishes greater transparency for the CFO, other business leaders, board, auditors, and key stakeholders. While it may seem simple, it’s incredibly difficult to achieve.
Boiling The Ocean
One of the most troubling challenges for CFOs looking to establish a robust data strategy is the sheer volume of information that finance chiefs can access due to their digitization efforts. Understanding which data is useful and how to use it, can be an overwhelming task that, if not addressed properly, can cause digitization and optimization efforts to collapse.
“It’s very easy to talk about data strategy or business intelligence strategy,” noted McLaughlin. “Unfortunately, where a lot of them go awry is they try to boil the ocean … It becomes this behemoth … of an effort that never really gets completed, and never really makes any progress.”
At a time when CFOs already have their plates full — McLaughlin highlighted his need to wear many hats, from managing new employee training in a remote work environment to assessing the enterprise’s real estate investment strategy — approaching the data deluge is no easy task.
But McLaughlin said taking gradual steps with actionable results is key to tackling that deluge and displaying the value of these digitization investments.
Starting small with a tangible output could mean beginning with portfolio KPIs. For instance, a business may need to understand the number of merchants with which it works, their volumes, revenues and payments — basic metrics that can be easily extracted and presented visually. Information that is easy to consume visually — or, better yet, that can be interacted with within dashboards — can efficiently familiarize the C-suite with this information.
From there, McLaughlin said, CFOs can expand and deliver other kinds of insights. By presenting this information to CEOs and other business leaders, this data-driven material becomes integral to their day-to-day operations, creating a greater appetite for more insights and opening the door to further digitization investments.
It’s a process that is easier said than done. Indeed, the actionable insights that data can deliver, and the technology that can transform workflows, will ultimately require the people within an enterprise to change their workflows and behavior.
Yet McLaughlin noted that the CFO is uniquely positioned to take a more introspective role within the enterprise. While other business leaders are peering outward toward consumers, investments, and business partners, the CFO must focus internally on enhancing operations and driving growth. As such, he said, finance leaders are well-positioned to take on the challenging task of digital transformation.
“It’s the chair that we sit in, and where we look in the organization that is unique relatively to all of my colleagues,” he said. “I think that positions us best to implement these changes, and be the champion for them across the organization.”