As the role of the CFO has evolved, finance leaders have a key role to play in their companies’ digital transformation as well. Tom Strunk (pictured), CFO at US-headquartered tech solutions provider World Wide Technology (WWT) shares with CFO Innovation his role in the company’s digital transformation journey which started in June 2017, how his 110-strong finance team has changed since then, and the challenges facing him.
Organizations in Asia differ but CFOs here in the region might still be able to find some of Strunk’s experience and insights applicable to their situations.
What has been your experience as CFO with digital transformation at WWT in reference to the finance function? I’m assuming your company isn’t a digital native, as it was founded in 1990 as a product reseller.
TS: WWT did not start out as a digital native company, but we are well on our way in our digital transformation journey. From a finance perspective, the integration between finance and other functions in the business is becoming more critical than ever.
Understanding how finance fits into every part of the business cycle is becoming increasingly important. The integration of analytics and finance produces much-needed insights for every aspect of the business, from lead-generation in marketing, to sales, procurement and the supply chain.
The cycle repeats itself as we analyse the generated figures and this data is fed back into the business to better inform our business strategy. The alignment between business and IT has become much more collaborative as we advance on our digital transformation journey.Tom Strunk, CFO, World Wide Technology
How’d you compare pre-digital WWT with fully digital WWT in terms of the finance function’s operation? Are there fewer finance team members, for example?
TS: The role of finance is changing as companies embark on their digital transformation. We’re moving from mostly doing back-end processing and adding up numbers to more front-end analysis and real-time business intelligence.
About half of the finance team remain dedicated to traditional roles such as accounts receivable, accounts payable and the general processing associated with finance. The other half is focused on the more digital and transformative aspects of the role, including analytics, forecasting and providing business intelligence.
As we progress further in our digital transformation, I expect more of the finance function to be focused on things like analytics, forecasting and so on, rather than the traditional ones.
We have also started automating some of our finance processes by integrating parts of our finance function with that of our closest customers in order to simplify processes such as accounts receivable and accounts payable. Our supply chain is also more deeply integrated with our business partners.
Which finance processes are automated and integrated with that of your closest customers so that AR and AP are simplified? Was that a painful process?
TS: One example would be the creation of our custom invoice application for our customers.
We needed the ability to invoice our customers in multiple different ways, without having to create thousands of manual invoices annually to meet this requirement.
We are still in the process of rolling this out, however the end state will be a completely integrated process that still allows for customization by customer.
It has a been a painful process due to the complexity, however the benefits will be significant including improved invoice delivery time and quality and a significant reduction in manual effort.
How much faster is monthly closing now after digital transformation?
TS: Our closing still takes several days to process, but we expect to cut our closing process in half as a result of our transformation efforts.
Much of this is due to better integration of our processes and systems globally versus the manual efforts of the past. In our ideal end state, we should close our books globally in two to three business days.
"The digital transformation journey is much bigger than just the finance function. The CFO needs to lead the digital transformation journey from an operational perspective"
And what about forecasting? Is it done in real time now?
TS: Our forecasting now takes place much closer to real time. We are able to conduct a financial forecast on our entire global business on a weekly basis.
We are now able to draw up parts of the data with the click of a button, though there are parts which still need to be manually drawn up as we are still in the midst of our digital transformation.
What are the other benefits ?
TS: Digital transformation has helped us become a more integrated and agile organisation.
One example would be how analytics is helping us generate business intelligence and forecasts, and how this then feeds back into different parts of the business cycle.
Greater digitalization has helped transform the company by fostering closer inter-departmental collaboration, allowing the business to move forward and grow at a faster pace, seamlessly.
What training did the company provide to your team so that it can be more focused on the digital and transformative aspects of the finance role? How much did it cost to do so?
TS: We’re still in the middle of our transformation process so pinpointing the final cost on these efforts is impossible at this stage.
Whether it is the finance function or other areas where jobs are disrupted due to the transformation, we are already working on training our team members for their future roles.
We’ve invested in internal and external training efforts to prepare talent for the transformation of the function and its impact on the way they contribute on a daily basis.
As important as it is to train our next generation workforce, it is equally important to manage them through the change. Articulating the timelines and the rationale behind the change is critical.
"You need a culture on the transformation project that business and IT have to be aligned in order to deliver the expected outcomes"
What's the next step in WWT’s digital transformation journey?
TS: We recognize that digital transformation is an ongoing process that will continue to impact the way we do business in new ways.
In the near term, we expect to relegate more of the repetitive tasks to automation and free up our team’s time for higher-level, analytical tasks.
As new technologies emerge and evolve over time, we remain committed to evaluating business applications and enabling implementations that will drive value.
How did you work with the CTO in this digital transformation journey? How did you ensure your team has enough skills and confidence in their communications with tech team?
TS: This has been one of the biggest benefits to date as part of our digital transformation journey.
The alignment between me and our CTO has never been stronger. More importantly, the alignment between business executive owners with their IT counterparts has never been greater.
For us, it was not a matter of finance and operations having the confidence to communicate with IT. Rather, it was making sure we created a culture on the transformation project that business and IT have to be aligned in order to deliver the outcomes we expect.
It is important that our employees and leadership understand the business from a more holistic perspective as we move towards greater integration and cross-departmental collaboration within WWT to drive innovation and growth.
What advice can you give to Asian organizations that are embarking on the digital transformation journey? Any advice to the CFO, specifically in terms of getting buy-in, costing, measuring return on investment, ensuring cybersecurity, change management and other aspects?
TS: The digital transformation journey is much bigger than just the finance function. The CFO needs to lead the digital transformation journey from an operational perspective.
This needs to be done with a cross-platform approach, with an eye to every aspect of the business, from marketing, to sales, procurement, supply chain and so on. CFOs need to look at how these digital platforms are adding value to the business through applications like analytics, while also bringing positive impact to our customers.
Ultimately, our digital transformation success will be measured by our growth, our profitability and how well we are impacting our customers.