Business Processes Ripe for Digitalization in 2021
As technology rapidly and constantly evolves, most businesses find it difficult to keep up with the latest tech advancements.The truth is that digitalization can change how businesses operate. It brings new opportunities, expands production, and improves processes.
But what exactly is digitalization? The term refers to the conversion of existing paper-based and manual processes from their analog format to a digital one.When visualizing digitalization in light of your business, avoid focusing on the most appealing new systems or tools.
Instead, consider how you can use the right technology to enhance the customer experience and add value to your entire business operations.
The current business environment requires organizations to focus on essential digital technologies, such as artificial intelligence, the Internet of Things, advanced analytics, and virtual or augmented reality.
With that in mind, let’s look at three areas of doing business that would benefit from digitalization.
Research by IMA reveals that most accounting controllers spend almost 70% of their time doing mundane, low-value tasks, although they’d like to focus on strategist and catalyst tasks.
On the other hand, executives (vice presidents and CFOs) spend 59% of their time on low-value duties.
In other words, while technology has developed tremendously, accounting workers are yet to adopt it fully. They still work at an inefficient pace, particularly when managing important financial processes.
Most accountants still love and use Excel and spreadsheets, but according to Accounting Today, CFOs don’t list Excel as a key skill when hiring new accountants.
On the contrary, they need people who can adapt to new technology, have strong communication and collaboration skills, and are excellent in KPIs and modeling.
Available Opportunities in the Digitalization of Accounting
- Procurement and purchasing – Businesses can use automation (mostly through machine learning) to make their purchasing and procurement paperless.
- Account processing – Organizations can stream their invoice processing through AI-powered invoice management applications.
- Audit – Digitalizing audit enhances accuracy and efficiency. Instead of relying on paperwork, auditors may access digital files comprising a traceable and detailed digital trail.
- Managing expenses – AI-powered machines can audit expenses, read reports and receipts, as well as notify the management after detecting any error.
- Closing process – Digitalized machines can crunch numbers speedily and more accurately than humans, thus helping accountants effectively manage closing entries.
By switching to digital modes, accountants can accelerate and increase the accuracy of their business processes.
Asset management refers to the collection, analysis, and leveraging of data on an organization’s assets to deliver a quality service level at a reduced cost. It helps businesses optimize decision-making and make better predictions on cash flow.
Moreover, it also entails gathering important data on the items in use, whether in a centralized area or in several different locations.
The digitalization of asset management entails all aspects of the process of managing assets, such as:
- scheduling work
- ensuring the availability of ample supplies to facilitate work completion
- capturing timely and accurate data
- detecting imminent failures
- analyzing data as it’s computed
- identifying the behavioral trends and patterns of the devices and machines used.
As you can see, asset management goes beyond merely counting the assets a business has.
The Importance of Digitalizing Asset Management
Digitalizing the process of managing assets has numerous benefits.
- Proactive maintenance – Digitalizing the information related to various assets and their use triggers maintenance. Asset managers receive proactive emails and alerts so they can schedule it. This step minimizes downtimes in asset usage.
- Enhanced asset performance – Predictive maintenance significantly improves how assets perform. The outcome is an extended life cycle.
- Optimum procurement – A real-time inventory status of your assets makes procurement efficient. It’s also possible to track and utilize unused inventory before new procurement, which reduces operational costs. Additionally, when the quantity of a product reduces, you can procure it without delays.
- International regulatory standards compliance – By digitalizing your company’s asset management, you’ll be complying with international accounting standards, such as IFRS, IAS, and ISO 55000 standards.
Therefore, increased data accuracy results in optimum inventory, reduced downtime thanks to timely maintenance, and improved regulatory compliance.
Best Practices in Digitalizing Asset Management
Verdantix, a renowned independent industry analyst company, interviewed and surveyed about 300 managers in maintenance, operations, engineering, and asset performance at service-oriented and technology companies globally on the best practices in the digitalization of asset management.
The research concluded that there is no universal approach to the digitalization of asset management.
Instead, each company’s asset management strategies should match the financial significance of product reliability for each firm and the latest state of technology.
An organization’s digital strategy should go through three phases: integrating, unifying, and optimizing.
Ultimately, the success of digitizing asset management depends on adopting a mindset on what best practice to use.
Communication Within a Company
Not only is the digitalization of communication essential during uncertain times, such as a pandemic that limits face-to-face communication, but it’s also crucial for a company’s daily operations.
Digital communication offers a seamless experience to both stakeholders and customers.
It eliminates the need for face-to-face interactions that consume a lot of time. The use of chatbots, AI, and automation allows customers to reach an organization momentarily.
Employees are the face of your organization, which is why employee engagement is critical. However, engagement can be expensive due to employee turnover.
That’s where digital communication comes in handy.
You can leverage digital communication to help employees feature their goals, create a sense of connection within the company, and make onboarding new hires effortless.
It’s possible to achieve all this through your company’s social media pages and intranet.
Digitalization is essential at all fonts of an organization. Stay ahead of the competition by going digital in your accounting, communication, and asset management departments. This worthwhile investment will offer long-term benefits to your business.
Jen McKenzie is an independent business consultant from New York. She writes extensively on business, education and human resource topics. When Jennifer is not at her desk working, you can usually find her hiking or taking a road trip with her two dogs. You can reach Jennifer @jenmcknzie