Keys to Successful Digital Transformation

October 21, 2020

By Caroline Keane and Greg Fritsky

Digital transformation has been getting more and more attention each year for the sole reason that companies are seeing greater returns on investment from implementing and fully utilizing technology that is available to them and of value. If you look at any company today, you will most likely see them using multiple applications. Some may interface with one another and others might not. One of the outcomes of a successful digital transformation venture is having all your applications working together and collecting and sharing valuable data. This can be a difficult achievement, but with the right team, it is certainly obtainable.

Greg Fritsky is a Director within Process, Risk, and Technology Solutions at EisnerAmper with over 25 years of consulting, technology, and internal audit experience. He specializes in robotics process automation, data analytics, and cognitive and artificial intelligence among many other areas. We sat down with Greg to get his perspective on data transformation and all that it encompasses.     

Caroline Keane: What is Digital transformation?

Greg Fritsky: Digital transformation is more than simply implementing technology. Digital transformation is leveraging technology to make meaningful change. This means adding new technology or enhancing existing technology to add value to your organization as a whole. The one thing to keep in mind is that the value you are gaining is not always monetary. Digital transformation builds efficiency, but it also provides you with greater amounts of clean data.

Digital transformation does not need to be a large-scale, invasive undertaking. You can start the journey with a small straightforward process, and often times, this is the best place to start. With that said, digital transformation can and should be pursued by all companies regardless of their size or industry.  

CK: Why should a company start their digital transformation process with robotic process automation?

GF: Robotic process automation or RPA is simply configuring a computer to emulate the actions of a human. By starting the digital transformation process by transferring the monotonous work that was being performed by a human to RPA ‘bots’, you are accessing the potential of achieving a significant return on your investment. Bots can work with greater efficiency and accuracy than any human and without the need to stop working.

RPA also provides companies with the ability to start harvesting data, especially for those companies that have messy manual processes. As the bot performs its tasks, it can compile data that is clean and meaningful. From there, it can transfer the data to a database so that it can be analyzed. One of the best parts is that it can do all of this in real-time which gives you the ability to make business decisions with the most current data.

Lastly, implementing RPA gives the company an insight into how to build technology out further. Digital transformation is a team pursuit. It involves inputs from people spanning across the entire company and, in some cases, help from consultants. Therefore, when you go through the exercise of identifying a use case, selecting the best design model, developing the technology, implementing a pilot, and rolling it out to its fullest capabilities, you will become better at introducing other technologies and will be able to see how you can build on what you have. Ultimately, all your technologies should be working with each other, and RPA is a great way to link your various technologies together. 

CK: How does a company determine which software is best for their company?

GF: Finding the best software is always a challenge. Technology is meant to support the way you do business. Therefore, it is nearly impossible to effectively evaluate what software best compliments your company if you do not know your processes. Not only does not understanding your processes lead to potentially selecting the wrong software, but it could also lead to you not getting the most out of the software you have selected.

In order to achieve the greatest success out of your software selection, you need to look at your future state and identify the potential gaps. This is often where business and IT have a difference of opinion because they approach the selection process from a different point of view. This is not to say that one vantage point is better than another; rather stating that you cannot rely on only one. Communication is key in ensuring the best result.

CK: How has RPA allowed companies to better capture data?

GF: If you have processes that requires tasks to be performed in different systems, databases, or manually, it is difficult to collect and consolidate your data. This is where RPA comes in. Bots run continuously, performing mundane tasks. Therefore, they are able to easily acquire a mass amount of data, validate it and then consolidate it into a single aggregated data source. As stated before, this gives you the ability to analyze your data in real time.

CK: How have data analytics tools helped companies better analyze and visualize their data?

GF: Data analytics tools have been around for a long time. For example, tools like Excel give you the ability to present your data in charts and graphs. But these older tools are limited because it is hard to manage the large quantities of data from various data sources. While newer tools built for end users help with common tasks such as forecasting and budgeting, they can also help manage your data and present more accurate projections.  However, they do still require the understanding of some minor coding skills like using visual basic, but the prerequisites are minimal compared to the older tools.

The real advantage of a visualization tool is being able to see the data in a meaningful way. This seems like a simple reflexive statement, but if you consider how complex your data can be, it becomes something much more. Many people have a hard time comprehending big data because they have never really been exposed to it. When you start to capture real data, you will quickly realize tools like Excel cannot manage it. Furthermore, you will not be able to comprehend it just by looking at the numbers simply because there is an excessive amount of data points to look at. This is where graphs, charts, and diagrams become a powerful visual tool of comprehension.

CK: Do you see RPA transforming the accounting world? If so, how?

GF: RPA is definitely transforming the accounting world, and we are even seeing it at EisnerAmper. I predict that in the next 5-to-10 years there will be digital auditors being leveraged for audit and tax preparation. The rationale for this is that accounting is a highly ‘rules-based’ profession which lends itself well to RPA. By having the bots focus on the manual activities, auditors can be more focused on things like tax code compliance and audit analytics – and that’s just a few examples.

While introducing RPA more into the accounting world, we will need to bring in more technology experts to ensure the bots are programed correctly and that they are operating as intended. This will cause our information and technology auditors to play more of a role in the business side of the audit.

As technology continues to grow to play a larger role in the accounting profession, there will have to be a merging of expertise. In-house technology experts will be one of the backbones of future accounting firms. Members of this group will help manage the vast array of technology that companies will use as well as providing general expertise for client work.   

CK: What are the biggest hurdles when starting the digital transformation process?

GF: The biggest hurdle is culture. If the company is not willing to adapt their culture and accept the path of digital transformation, the process will be short lived. Digital transformation can be scary. We have all heard horror stories of it not working and in order to succeed, the culture needs to be aligned with the process.

One of the major upsides of having culture aligned with digital transformation is that you are more likely to approach it correctly. When your company’s culture embraces digital transformation, you are more likely to have the involvement of all the necessary parties, and they are more willing to listen to each other. Basically, if your culture embraces digital transformation, your success in pursuing digital transformation will be much higher.

CK: What are the biggest mistakes you see companies make with the digital transformation process?

GF: The key to making a large impact with digital transformation is to clearly define goals and assign the right people to the project teams. Goals and project milestones are key to keeping these large projects on task. Having a clear idea of what your company wants to gain from this project and how you and your team can get to that point keeps a team oriented and moving towards a successful implementation.

Remember: No matter how much time and money you throw at a digital transformation, if you don’t have the correct stakeholders at the helm and driving the project forward, you won’t get very much out of it. People are quick to want to implement any technology they see but without the right people, they fall short of their goal. The right people who know the process will make all the difference; without them these digital projects will inevitably come to a halt. I have seen projects stall and grind to a stop because they did not have the right stakeholders backing their processes and helping align the programs with their company’s goals. 

CK: What should you say to a company if they don’t see the ROI when implementing technology?

GF: How are you measuring ROI? What are you looking for? Most of us understand it in simple, straightforward terms: “When spending X dollars we expect to see Y dollars in return where Y is greater than X.” But these projects are not always that simple. It is important to remember that digital projects don’t have to be used solely for lowering costs; though they are clearly capable of that, they have many other usages. Companies may be looking for better transparency, controls enhancements, or new innovations. There are countless reasons why a company may be failing at realizing ROI when implementing these technologies.

The biggest recommendation is start small, or maybe not implement the new technology everywhere. This may delay the company recognizing the grand-scale ROI they are aiming for, but by starting smaller, finding one or two areas and implementing the technology, you can see how it affects the company. Once you understand how the technology impacts the group and what the best usage cases are, then you can accelerate the project.

CK: What would you say to companies that believe they are too small to start the digital transformation process?

GF: No one is too small to start the digital transformation process. People assume that because digital transformation is such a large and expansive concept these newer technologies must be too expensive, but actually that is not necessarily true. For example, smaller project and use cases such as simply upgrading current programs that are used to record transactions or balance the books can be applied at a minimum expense. In addition, using technology to allow one to work remotely more effectively, or a third-party application in the cloud can present much more manageable use cases.  No organization is too small to make changes and implement new or upgrade current technology. Budgets can play a part in what your company is capable of doing, but there is nearly always an application with an acceptable price range that can make a net positive change. 

CK: Why should companies consider working with consultants to help with the digital transformation process?

GF: While a consultant might not always have the answers, they can help you get to the solution. They bring expertise that includes best practices, new ideas, and sometimes even a new point of view. Transformation projects work best when you have a collaboration of client and consultant. By working together on digital transformation, you get a blend of the expertise of a consultant with the experience and knowledge of vital information that is provided by client. Even once a project is over the lasting impression of the consultant will remain. The knowledge transfer as you work with the consultant is critically important, as it can change how you look at and approach projects in the future.    

CK: What can a company do to continue to get more out of their technology?

GF: When you’re using technologies, the first question is always ‘how much of your process is manual.’ Technology is supposed to make your life easier, and by leveraging technology you can accomplish this.  Manual processes, not leveraging data out of your existing system, no real-time information, inability to scale and grow -- all of these are signs that you are ineffectively utilizing what technology you currently have, or that there is room to implement new technology. If you see issues but are unsure of how to measure what is missing from the technology, don’t be afraid to bring someone to investigate. These assessments can benchmark applications against processes against the controls, identify gaps, and help measure what the system is actually delivering.

CK: What are some best practices you’ve seen surrounding digital transformation?

GF: One of the best practices we often recommend is begin the journey with the creation of a center of excellence (CoE). The CoEs we help create generally consist of four specific roles. The first is the process owners, who are those folks who the new technology will be serving. Secondly, members of the company’s technology and security team should be included as they’re most likely the people who will be implementing parts of the technology. A third group is the internal auditors and control/risk process owners. These members are key in adapting technology by helping to bake in the company’s risk monitoring and controls. Finally, if available, a data expert is required to ensure that data stewardship is established. No matter how impressive the technology that is being implemented is, it is not possible without good, clean, and accessible data.

The CoE should be set up at the beginning of the engagement. The members of the CoE team help to keep everyone task-oriented and focused on the implementation of the new technology. Now these centers of excellence may not be as well suited for smaller projects, but it is always important to understand who has a hand in the implementation and what people within the company can help make the project go as smoothly as possible.

With all of this insight into digital transformations the ground work for where to begin your data journey as well as how to start has been set. Technology can be implemented in many different ways no matter the size of the company; it’s just important to understand where to start and what the end goal of your implementation is. Digital transformation can be scalable to fit with your company; as better technology solutions get introduced to the market, you will be able to find the right solution for your company to accomplish your technology goals.

Greg Fritsky will be speaking at the upcoming NJCPA Emerging Technologies Conference to be held virtually on October 27.

About Caroline Keane

Caroline Keane has experience in Sarbanes Oxley Section 404 compliance, Internal Audit, IT Audit and SSAE 16 compliance engagements.