As we set resolutions, close out the previous year, finalize budgets, and kick off new transformational initiatives, the modern-day CFO naturally prioritizes tasks in January.
Some priorities remain constant for finance leaders: maximizing working capital, staying financially nimble to fund strategic growth, managing risk, ensuring compliance, optimizing the bottom line, and leveraging financial data to diagnose past and future issues. Instead of adding another item to the agenda, I suggest reframing the only panacea across all these priorities: Digital.
When applied with business-first, human-centered, and incremental methods, Digital offers a competitive edge within the office of the CFO. CFOs who embrace AI/ML technologies realize significant business benefits, such as improved financial reporting, proactive risk management, enhanced operational efficiency, and better decision-making.
Learn how to de-risk, simplify, and accelerate your digital efforts to drive bottom-line impact in 2025 with SD Digital’s best practices:
1. Find a SAFE Starting Point for AI/ML in the Finance Organization
We are now officially out of the hype cycle for AI/ML and into the acceleration cycle. Nearly every modern digital platform is embedding either generative, predictive, or both AI/ML capabilities into their tools. This is great news for finance professionals, as we can now leverage the power of AI/ML without implementing yet another set of technologies. I suggest using 2025 to do something—anything—with AI/ML. Of course, like with any investment, a solid strategy around usage is essential, but in the meantime, I recommend you…
Clean Up Your Data – Running AI on ill-defined, poor-quality, or incomplete data sets is like using a navigation system with outdated maps. However, fixing this doesn’t require Gerardus Mercator-level cartography skills. Start in 2025 to:
- Define and align core data elements such as customer demographics, product catalogs, chart of accounts, and vendor demographics to ensure they have the same level of fidelity and definition across all your systems, whether integrated or not.
- Take the core data of your organization and consolidate the most critical 20% into a single data store. Continue to populate this throughout the year. Embrace being a digital packrat (storage is cheap) and don’t worry about exactly how you’ll use the data—you will use it eventually, I promise.
Up Your Data Mastery – Remember when the concept of having process owners, experts, or SMEs was novel? Without delving into that debate, let’s agree that data mastery is the digital equivalent of process mastery. Promote everyone in your finance organization to become a data champion. Get really good at collecting data, putting it to use, and relying on it to make decisions, both large and small, in complex scenarios instead of relying on untested hypotheses. Amazing things can happen when you, as a leader, ask your teams to show you the data.
Assess What You Have – As mentioned above, you could probably throw a rock at your tech stack and be guaranteed to hit a platform with built-in AI/ML capabilities. Using internal data, load up Large Language Models and Large Data Models, and set your users free to explore what they can do. Some key wins we have seen this year include:
- Using PowerBI correlation analysis to do multi-variable predictions that learn over time
- Using PowerBI prompting to auto-create dashboards
- Using CoPilot in Business Central to ask questions like “what are my most profitable products”, “who are my best customers”
- Using PowerBI to do root cause analysis in FP&A misses and establish correlations in move forward restated financials
2. Raise Your Team’s Digital Quotient
In today’s digital world, understanding key digital concepts like System of Record and System of Truth is just as important as understanding GAAP.
A digitally aware Finance professional is uniquely positioned to add value to their team and enterprise by advocating for digital concepts. These concepts naturally lead to solutions that promote nimbleness, enhance user experience, and foster connectedness, unlike the large, monolithic systems of the past. I ask that you challenge your team to do even one of the three below things:
Know the Players in the Market – A prime example is AP automation technology. In recent years, there has been a proliferation of AP tools that assist with the PO side, invoice ingestion, matching, and offer end-to-end solutions. Some tools focus on touchless rates, others help reduce category spend through vendor consolidation, and some aim to get your teams out of Excel (more on that later). With so many options, challenge your team to spend time getting to know the leaders and up-and-comers, along with their relative strengths. Some other exciting emerging categories to explore include Audit analytics, FP&A and Financial Service Management workflow tools.
Work in an Agile Fashion – I know that Agile can quickly turn into a religious debate in an organization. So, let’s set the record straight (as a self-identified Agile anti-purist) any flavor of Agile is better than no flavors. Get your organization comfortable with the fact that when a digital effort is planned, not everything can be known and not every estimate/task is going to be accurate. So, adopt the parts of Agile that promote:
- Small and incremental releases of improvements
- Performing a small Research phase at the beginning of a project to derisk that the end solution will work to solve the right problem and can be technically de-risked
- Fail fast and small
- Fund the outcome, not the project – so calling audibles is encouraged
3. Future Proof Your Organization
As transactional level jobs become more automated; finally freeing your team up to focus on the strategic, and not the mundane is finally a tangible opportunity. But how many of us as leaders have a plan for what is next for those loyal and dedicated team members? It is more than fair to say that Digital will be the central nervous system of our Modern Finance Organizations – and not pushing paper. Which makes it absolutely critical that your teams focus on learning disciplines like:
- Data Science
- Agile and SCRUM
- Human Centered Design problem solving methods
4. Don’t Make Coming to Work a Digital Downgrade
Give your finance team consumer-grade technology and experiences similar to what they use personally. Imagine if Amazon added 12 steps between finding an item and finalizing the purchase, requiring you to copy text from another window multiple times, spend 5 minutes hand-keying and re-keying information, navigate through 7 different screens, and use workarounds because parts of the site are broken. Would you use Amazon again? This can be the experience of our finance teams when closing a period, developing annual/quarterly budgets, or processing AP. So why do we tolerate it at work if we wouldn’t after work? We owe it to our teams to be better, which means…
- Getting them out of Excel
- Shifting focus on driving better financial results by getting them out of the minutiae required by manually keying/re-keying data between systems
- Integrate systems to give them data at their fingertips – and not to copy/paste rows or columns into new pivot tables
- Connect, using workflow, across finance silos (this is where most tools create bad experiences)
5. Say Goodbye to Large, Monolithic Tools and Projects
Granted, this might be a bit of a stretch to accomplish in one year, mainly because it involves a cultural shift towards accepting some controlled risk of rework to achieve progress. As Finance professionals, the idea of progress over perfection can cause panic, but the alternative is never affecting change because we can’t get our systems perfect. I believe that proactive discussions about the right time to invest in new tools are crucial for progressive organizations. These new tools should be implemented for a small part of the business initially, in a matter of weeks, not months or years. One thing I’ve learned over my career is that no matter how many brilliant minds are in a conference room conceptualizing how a technology should work, production usage is ALWAYS the best teacher.
Gone are the days of huge ERP implementations that do everything for our companies. Modern tools and architectures focus on systems that handle core functions, different tools that differentiate, and separate tools that help you innovate. The ability to integrate and share data between systems means you can (and should) choose more point solutions that best meet your needs. This approach not only provides more bespoke features for your finance processes but also reduces risk when those micro systems need to be replaced or go offline. So, what does this mean? Here is what I recommend as a stretch goal for you in 2025:
- Spend more time on integrating and building bridges between great experiences for your team; extract the data layer as a separate asset
- Prioritize nimbleness – it is likely that your company could look significantly different by 2026; new markets, new customers, new products, M&A… so replacing a wholesale system over the course of 24 months is no longer an option.
- Don’t focus on managing systems (functionality), focus on governing data – that is the real asset
Make 2025 the year you focus on the Panacea of Priorities – your Digital Finance agenda. Don’t try to do it all but do at least one thing. Move from thinking to action so that you and your teams can learn from smaller projects that might fail and generate learnings or succeed and generate learnings – quickly and over time.
And know that you are not alone. If you need help putting any or all of this into a discrete set of measurable goals for you or your team, please reach out to me directly at [email protected] or contact the SD Digital team at [email protected]. As Finance and Digital professionals, we are here to help bring clarity and confidence and would be honored to help shape your 2025 digital agenda.
About SD Digital
SD Digital helps organizations translate technology to transformative change and realize the best version of themselves. With a forward-thinking cap and digital lens, we empower organizations to realize the art of the possible with the power of digital through business-focused and technology-enabled solutions, built on an unwavering commitment to practicality, speed to market and the user experience.
Learn more on our dedicated SD Digital page or contact the team directly at [email protected].
