STEP 1 – ASSESS YOUR DIGITAL FINANCE MATURITY
To get started, perform a self-assessment that looks at specific measures of maturity in finance along four key dimensions: automation, data, cloud, and ways of working.
Understand your current state of automation. What functions are done manually versus performed by bots? How effective is your automation at driving cost improvements? How much time and money is spent maintaining and updating those technologies? Do you retrain humans who lose their positions to automation for higher-value work?
Insurance companies and finance are full of data; the question is whether it is in digital form, usable for forecasting trends, real-time analysis, and modeling tax effects? Controls must be in place so data is captured at the source and its integrity maintained. Also required is an understanding of how much finance resources are committed to performing manual reconciliation or going back to operations to request data. Understand how your data is obtained, cleaned, formatted, and stored. In other words, is it consistent and instantly accessible by everyone from the CEO to a salesperson on the road? Is there a common data dictionary? Is the data secure from attack?
To what extent is your finance operation in the cloud and benefitting? Many firms still split operations between on-premises and cloud components. This hybrid approach keeps outdated systems functioning on the on-prem side, sort of, but eventually can create more problems by holding back deep transformation. Finance executives must also assess the effectiveness of their backup and recovery strategy and the ability of their cybersecurity program to defend against threats like ransomware and denial of service. Are you up-to-date in upgrading your tools and security patches?
WAYS OF WORKING
Suddenly many of your employees work remotely, empowered by communications software and remote access to corporate networks. This requires new ways of thinking about change management, collaboration, and even HR functions, such as onboarding new hires. But “ways of working” has another connotation in the digital environment. The digital organization promotes dismantling silos, working across functions, and making organizational hierarchies flat, with decision-making authority pushed closer to whoever is serving the customer.
A few years ago, we talked about digital transformation in traditional financial services as a nice-to-have benefit driven by automation for reducing cost and improving accuracy. Now, that transformation must go much deeper than plugging in a few robotic process automation bots.
Finance transformation is now understood as the tip of the spear that will help insurance organizations drive product and process innovation, meet complex regulatory reform, and create value not just for a broad portfolio of stakeholders but for society in general.
Now is the time to create the finance transformation within your organization.