DigitalTransformationTalk: From cost reduction to value creation

On 19 November 2024, Digital Transformation host Kevin Crane was joined by Mike Todasco, Ex-Senior Director of Innovation, PayPal; Yemi Oluseun, Programme Director - Business Transformation Strategist, The Change Hive; and Phil Tomlinson, SVP, Global Offerings, TaskUs

 

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The report, 6 Power Moves CFOs Must Make, called digital transformation an essential part of the CFO role, as "72% of leading CFOs identify their CFO as highly important or critical to their success." To drive innovation in their organisations, according to the report, finance leaders should avoid using technology as a problem-solving means and instead implement it as a tool to create new opportunities.

 

Finance leaders need to evolve from evaluating tech investments via traditional business cases to using a holistic value assessment that includes strategic, operational, customer, and financial impacts. It’s especially in the case of customer-facing innovation  where CFOs should focus on value rather than cost. As a result, business cases for digital transformation should be put forward differently with a focus on how it’s going to reposition the company strategically.

 

To understand the extent of changes that DT is bringing about in the finance function, think back to the change Lotus 1,2,3 and spreadsheets. To get the transformation right, upskilling must be part of the strategy too. 

 

Metrics of DT beyond cost

The complete automation of processes without a human in the loop is highly risky. In customer service there should be humans to escalate or answer complex queries or finetune models to accommodate changes in the customer base. When choosing a technology, you should consider other aspects too than just cost, such as how its deployment aligns with company values, the cost of ownership, whether it’s a vendor that you can trust or if the vendor offers an opportunity to test the technology in a pilot project.

 

The right approach is experimenting in pockets and iterate to see what works and then scale up. Consider what your value proposition as a company is – a cost or a value player – and have a review of your customer journeys from start to finish and identify areas for automation. The headcount saved with automation can be leveraged for more innovation. 

Cyber security professionals probably have the hardest time to explain the value of investments as ROI takes the longest in this area to materialise. To see DT strategically, cross-functional thinking is key. Data analytics must play a central role in driving innovation, and if you focus on customer experience, cost cutting and efficiencies will arrive by themselves. A business always must establish what the three steps are that can move the needle in the next 18-24 months.

 

As often is the case, if one of these moves turns out to be right, it will pay for the other two as well. GenAI is revolutionary, you can start a conversation with GenAI even about company strategy to get some new ideas by uploading some documents and giving it the right prompts. It’s also a good idea to let innovation bubble up.

 

Buy a GenAI account for each of your employees and then ask them how they use it for getting more efficient at their jobs. It’s also a good idea to form a customer board from your most loyal customers and listen to them every time you make a major change to your customer experience – and make adjustments accordingly.

 
The panel’s advice

• Technology should be seen as a proactive tool rather than a problem solver.  
• To have one breakthrough innovation, you need to have a lot of failures.
• Innovation, most often than not, comes from constraints.
• Your employees are likely to  use GenAI at the workplace without you knowing about it, so why don’t you just keep it under control and introduce a policy for them to use it.