In December 2021, Michael Gale wrote a piece in Forbes arguing that the time for digital transformations has already come and gone.
But I'd argue this isn’t necessarily the case.
At this point, the vast majority of businesses have undergone at least a partial digital transformation in order to stay relevant and operational during the pandemic and to align with customer demands and preferences in the digital age.
For many business leaders, it can be tempting to focus a digital transformation strategy on the more ‘glamorous’ aspects of business, such as marketing and sales. And, at this point, if you are still using analog versions of these customer-facing functions, it may very well be too late, as Gale suggests.
This late in the game, it’s especially crucial to keep back-office financial operations in mind to drive a successful digital transformation—particularly in the B2B SaaS niche, which relies heavily on recurring billing.
In fact, Boston Consulting Group has shared research that indicates only about 30% of digital transformation initiatives are actually successful. That’s a daunting statistic when you're considering investing significant time, effort, and money into your digital transformation journey.
So, how do you minimize your chance of failure?
One of the key factors BCG identified for a successful digital transformation strategy is the adoption of a business-led modular technology and data platform. A prime example of this technology is a modern, agile subscription management platform that integrates seamlessly with your current tech stack, automates and streamlines your financial operations, and provides real-time data analytics.
In combination with other factors, implementing this type of digital technology can put your business's odds of a successful digital transformation at 80%.
Digital transformation is an ongoing reimagination.
Digital change is not a binary process—business models aren't simply either analog or digital. Rather, it’s an ongoing reimagination of how to do business.
Business owners who succeed with digital transformation projects embody a mindset of continuous improvement and embrace new technologies. The primary focus of a digital transformation initiative should not be on how you can speed up or digitize your existing processes. Rather, it should focus on how you can adapt your business processes by embracing new technology to maximize your potential.
So it’s difficult to make the argument that the time for digital transformations has passed.
If you haven’t made a concentrated effort to digitally optimize every aspect of your business, then yes, you may be behind the eight ball.
However, with the ethos of continuous improvement in mind, it’s never too late to work on your digital transformation journey. Nor is digital transformation a one-and-done event—it should remain front of mind as new technologies continue to emerge and disrupt industries.
Modern, automated FinOps is a key element of digital transformations.
This continuous improvement effort of digital transformations needs to be applied across the board in your business functions. Just as a B2B SaaS digital business will likely not succeed without a solid framework and data-based decisions, neither is a digital transformation effort likely to succeed without the strong backbone of a modern financial operations (FinOps) solution.
As Eric Lam and Daniel Pettibone, digital transformation leaders at Google, outline, “One of the critical factors foundational to success is Cloud FinOps (Cloud Financial Operations). Cloud FinOps is an operational framework and cultural shift that brings technology, finance, and business together to drive financial accountability and accelerate business value realization through cloud transformation.”
Lam and Pettibone suggest that with this type of enterprise-wide collaboration, “business priorities become more clear and the focus shifts to value creation, customer-centricity, and innovation.”
Failing to take FinOps into account in your digital transformation strategy can have profound consequences. Dapo Adekola, VP and CTIO for Cloud at Capgemini Group, elaborates on this, saying, “Without a clear focus on FinOps, organizations adopting public cloud may fail to achieve the desired digital transformation objectives due to cost escalation and business case-erosion, proving why cloud economics are so crucial.”
However, according to the same BCG research shared earlier, a successful digital transformation strategy can produce an earnings growth that is 1.8 times that of a business that has not embraced digital technologies, and more than double the total enterprise value growth.
So, while successful digital transformations can be difficult to pull off, the payoff can be spectacular.
Back-office functions are more likely to be overlooked.
Again, most businesses already have some kind of digital strategy in place. However, these digital strategies often focus on front office, customer-facing functions, like customer service, marketing, public relations, and sales.
While of course, it's important to modernize and adapt these functions, it’s also critical to include the often-overlooked back-office functions in your digital transformation efforts.
Particularly among subscription-based business models, it’s fairly common to see a tech-enabled front office while the back office muddles through with legacy billing software, spreadsheets, or other platforms that aren’t optimized for recurring billing.
Asked when business owners who are beginning a digital transformation should start thinking about FinOps, Adekola went on to say it should be on the roadmap from day one. “Whether you’re doing a big datacenter exit, or working on a transformation out of your on-premises systems, or going net new deploying new native applications in the cloud, FinOps should be considered from the get-go,” he says.
Switching to a modern FinOps digital technology solution not only increases your chances of a successful overall digital transformation as outlined above, but it also offers many benefits on a more day-to-day basis.
For example, an automated, integrated recurring billing system can help businesses provide a better customer experience through timely and accurate invoices that are not subject to manual errors.
Internally, it can save time by decreasing time spent on billing by up to 80%, as well as save money by plugging revenue leaks, commonly putting 2-4% of annual revenue back into your business’s bottom line.
It’s not too late for FinOps digital transformations.
The best time for a digital transformation–including your FinOps–was at the dawn of the digital age, approximately a decade ago.
The second best time is now.
All teams within your business will need to buy into the enterprise-wide digital transformation process and mindset. It will likely include re-training, education, new skill development, embracing emerging digital technologies, and potentially even hiring new team members specifically to contribute their skills to your digital transformation toolbox.
With the broad scope of digital transformation strategies, it can feel overwhelming to begin the process. But starting with an agile, scalable recurring billing solution will help set you up for success. It will:
- modernize your FinOps,
- provide data and reports to help you evaluate the success of your digital transformation efforts in real-time,
- save you time and money, and
- improve the customer experience.
The digital world is constantly changing and evolving, which means there are always new ways to optimize your business. Your competitors who were early adopters of digital technologies may be ahead of the game now, but it’s also possible that they will become complacent and fail to incorporate newer and better digital technologies as they emerge.
As you lean into a back-office digital transformation strategy, embrace digital technologies, and maintain a mindset of constant improvement and innovation, you may very well leapfrog over your competitors in the future.