IMA report showed a strong focus on digital transformation in finance & accounting in the Middle East and India. According to an IMA (Institute of Management Accountants) report, companies of all sizes in the Middle East and India have undergone a significant digital transformation in finance and accounting. The report shows that the COVID-19 pandemic has significantly accelerated the digital transformation, which had already been accelerated by normal business competition.
“Digital transformation leads to fundamental changes in how a business operates, how it makes and implements decisions, how it values its people, and, ultimately, how it delivers value to customers,” said Hanadi Khalife, Senior Director Middle East African, and India Operations.
Also said, “To remain relevant and to help their companies compete, finance and accounting functions of organizations need to be part of this transformation. The report shows that the engagement of finance in this transformation varies considerably from company to company, especially when viewed by company size.”
Regarding the overall digital transformation of finance, it has already occurred to a large extent for slightly more than half of the large companies (1,000 or more employees). This is significantly higher (by close to 50 percent) than the digital transformation within the finance function of small companies (less than 50 employees). The percentage of finance functions at large companies that reported extensive digital transformations between 2019 and 2020 increased by nearly half. The change was even more dramatic among medium-sized companies, which struggle with tighter margins and more limited resources, with their percentages more than doubling.
Starting with financial planning and budgeting—the number one “pain point” for CFOs—the pandemic has exacerbated the impact of technology on financial processes. All businesses use technology to improve their planning and budgeting processes, but larger organizations (59%) are more likely to do so than smaller ones. As a result of larger companies’ greater need for integrated, strategic planning and greater resources to devote to it, this result is not surprising across all countries.
Automating routine, repetitive tasks will be the most impacted by the Digital Revolution. As a result, many financial processes could benefit from digital transformation. This survey confirms a previous IMA study: Larger companies’ processes were impacted the most, and smaller companies’ processes were impacted the least.
Many companies are turning to robotic process automation (RPA) to aid in organizational and financial process transformation to enhance their value proposition and reduce operating costs. During the study period, the use of RPA increased dramatically. A 2019 survey found that 57 percent of companies hadn’t yet implemented RPA. Only 28 percent of respondents had not yet started their RPA journey a year later. Finance is leading the implementation of RPA in nearly a quarter of organizations (22%). In another 43 percent of cases, it is collaborating with IT to move the project forward. Financing plays a limited role in only 26 percent of organizations (where IT is leading the implementation and finance is only being consulted), and it plays no role in only 9 percent of organizations. In all countries studied, this result was the same.
RPA combined with artificial intelligence (AI) is now used by 32 percent of large companies, up from 18 percent in 2019 and 2 percent in 2020. There is a significant gap between smaller and larger companies when it comes to adopting new technologies.
However, despite the benefits of adopting enhanced technological and analytical capabilities, the vast majority of companies (95 percent) face at least some difficulties in developing these capabilities. Investment in new technologies costs most (30.3 percent), followed closely by developing necessary skills in existing staff (29.4 percent), limited staff resources/focus on competing for initiatives (29.2 percent), and the difficulty in hiring staff with the necessary skills set (29.2 percent) (28.6 percent ).Finance and other organizational functions have changed as a result of new technologies and the increased use of advanced analytics tools and techniques, according to the study. Financial management is now viewed as a business partner by the vast majority of organizations (78 percent) of all sizes, helping to improve decision-making and performance management.
Raef Lawson, Ph.D., CMA, CPA, IMA vice president of research and policy, said, “Finance and accounting professionals in the Middle East and India, like their counterparts around the world, are responding to the challenges and opportunities presented by leading-edge technology to digitally transform the finance function. The digital revolution is impacting many financial processes for organizations, both large and small, and significant advances have been made during the study period and will continue to be made. By combining its traditional core expertise with enhanced digital and analytics skills, finance can become a true business partner, supporting organizations in making insight-driven decisions, thereby enhancing organizational value.”
