Blog

15 February 2018, 10:15

Digital transformation - so what's this got to do with Finance?

Simon Hopkins, Chief Executive of Turn2Us and Trustee of Charity Finance Group explains why digital should be at the centre of thinking for finance professionals.  

Digital is everywhere. I'm writing this blog on a mobile digital device rather than on a piece of paper. Last week I filled in my tax return online. It's almost impossible to think of a time when we didn't live our lives online or through digital tech. And the voluntary sector is evolving its use of digital as well.

Everything from 'donate here' buttons on a website through to emerging use of artificial intelligence is more and more part of the way we work as charities. Like it or not, it's central to everything. Rather like charity finance in fact.

So how do these two foundation stones of the modern charity work together? Should Finance be the voice of caution asking the difficult questions about risk and GDPR whenever the digital whizz kids (the ones in t shirts) think up another funky app, or should finance people (the ones in suits) be in the vanguard of innovation in the use of digital to drive the sector forward? I want to argue for the latter. We don't have to abandon strategic risk management in order to do this either. So why do I think this?

Firstly, let's understand context. Over the last few years I believe that the sector has radically changed its understanding of the role of finance. The language of the back office has been replaced by the notion of the strategic business partner. So we can argue that finance needs to understand areas of innovation as a matter of course.

Digital is fashionable ('sexy and exotic', even) and so maybe these two things go together. Well, it's a red herring. Simply because digital is the zeitgeist 'thing' is not a good reason on its own for us to be engaged. That said, as I've mentioned above it's increasingly pervasive. Digital is relevant because it's the way we live our lives. The digital revolution is the biggest shift in human interaction our generation will ever see.

Many charities who don't have a digital strategy risk becoming irrelevant quite quickly. To be a true business partner to any charity with a strong digital strategy is going to be impossible without a true appreciation of what digital can achieve. So we have to understand it. The words 'don't panic' come in here. This doesn't mean we have to be right up with the technical experts and thought leaders, some of whom are thinking so laterally we will always be trying to catch up. But we do need to grasp the possibilities that digital transformation brings. So what are these? And why are they so relevant to finance?

There's a whole book to be written here so I'll focus on just three areas: Firstly, digital as a functional tool to finance brings opportunities in more dynamic reporting and analytics - using data in a way that is more real time, spotting trends and outcomes more systematically. This makes a lot of sense. But we shouldn't stop there...

Secondly, digital - in the right circumstances - allows for a level of scalability that would be unaffordable in an analogue world. At Turn2us we've doubled the reach of our core support services with negligible impact on ongoing costs. That has been made possible by extensive use of digital as a key component of our financial sustainability plan. Our unit costs have been reduced dramatically and that appeals to me as a finance professional.

But thirdly, we need to go further than that. Digital presents the opportunity to transform the quality of outcomes by linking personal data and broader systems of help in a way that historically would have needed an army of case workers. And GDPR is a massive opportunity for us to think about data sharing in a very different way here. Finance people have been in the vanguard of developing impact reporting and digital is a powerful tool in transforming impact. The connection is there already. Digital isn't a magic bullet but it can - and, I believe, will - transform outcomes for the vulnerable, excluded and oppressed. CFG's project to explore digital transformation is a great opportunity to reinforce the pivotal role finance people can play in releasing this potential. Simon Hopkins is Chief Executive of Turn2Us, and is a Trustee of Charity Finance Group.

Take part in our digital survey project

Together with charity IT services provider Eduserv, the CFG want to hear and learn from your views. Complete the survey for a chance to win an Amazon Echo: www.surveymonkey.co.uk/r/cfg-digital-2018 (deadline - Tuesday 27 February). Your views will help shape new resources and tools with which charity finance professionals will be able to maximise their contribution to the future of their organisations. For more information about this initiative and Eduserv’s Executive Briefing Programme, please contact Natasha Veenendaal at Eduserv: natasha.veenendaal@eduserv.org.uk