Digital Transformation of Finance with ERP. The backbone and fuel of Indonesian economies are family businesses, that are defined as businesses managed by more than one member of a family.

Some of the more successful family businesses have grown into multibillion-dollar corporations.

The quickly growing digital economy, technological innovations, and globalisation factors are expected to have far-reaching implications for the ordinary family business in Indonesia.

According to a KPMG survey, two of the top three problems keeping family companies awake at night are digitization and innovation.

Emerging technologies such as virtual/augmented reality, robotics, 3D printing, and the internet of things are bringing new problems to family businesses, in addition to the well-known ones like succession planning and governance.

This development of technology is also speeding; it will continue to reshape industries and create new ones from the ground up. Business model transitions that used to take 10 to 20 years are now taking two to five years.

Many family businesses are trying to keep up with the competition. The potential of digitalisation as a strategy of transforming existing business models was unknown to the family businesses surveyed. Traditionally, digitalisation was restricted to the deployment of information systems and manufacturing processes, as well as e-commerce.

Whereas digitalization can also be started from within the company, digital finance is one of them.

How can digital transformation in the financial sector be carried out by family business practitioners? Find the full answer in the article below!

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Read: 10 Questions CEOs need to ask before finalizing an ERP application

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Finance Transformation

Digital transformation is helping businesses to design and deploy new business models to keep their competitive edge in the modern cloud era.

The traditional finance department, which concentrated on report development and budget creation, needs to change into something more modern that can face the demands of the modern corporate landscape, which is continuously evolving.

Finance departments must move beyond bean-counting and collaborate with other internal stakeholders to provide value across the organization. They must be able to prepare quickly and recognize and capitalize on potential new business prospects.

This is a huge change for some, certainly compared to what happened before. If this is the case, it will require a very major change in long-term mindsets — not just within the financial department, but across the board.

If this adjustment in mindset can be achieved, the finance office can begin to employ modern data analytics solutions, allowing businesses to adapt to these new models and gain significant benefits.

The Covid-19 epidemic has shed new light on organizations' current capabilities and identified flaws in processes, systems, and business models.

Larger, more traditional organizations, for example, have been demonstrated to be less agile, particularly when using sophisticated legacy ERP systems and fragmented business processes.

As a result, this has functioned as a catalyst for digital transformation, hastening the implementation of digital initiatives.

You've probably realized by now that financial management in a firm must progress in lockstep with the digital transformation.

As a result, spreadsheets and accounting systems are being phased out in favor of more efficient ERP solutions. You must upgrade your administrative administration if you do not want your company to fall behind.

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Read: ERP as the Foundation for Digital Family Business Transformation

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Administrative Advantages of ERP for Digital Transformation

ERP software includes management capabilities with a lot of flexibility that can help you achieve operational balance.

Allowing control over assets, revenues, and expenses also aids in the protection of sensitive financial data, encourages profitability initiatives, and adapts to scalability requirements.

The following are some of the natural advantages:

• Protected data: This solution ensures the database's integrity and protects the most sensitive financial transactions.
• Precise data: In addition to basic accounting, this method avoids duplicate entries, making forecasting and budgeting easier. It also allows for expense classification, bank connectivity, and audits with zero errors.
• Regulatory Compliance: As financial rules change, prompt modifications are required. This system is capable of fast adjusting to regulatory changes by incorporating statutes such as ASC 606 and IFRS 15.
• Operational interconnection: Integration of departments and operational areas reduces the complexity of process management. This is meant to unify financial data while also improving the divisions' communications.
• Stricter controls: This management style enables the deployment of more stringent internal regulations. You can avoid fraud and felonies by assigning risk management and business compliance functions in this way.

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Why Choose ERP for The Digital Transformation of Your Company

SAP employs open-source and cutting-edge technologies to enable organizations to build a more customized and powerful software ecosystem on top of a secure and comprehensive ERP solution.

Example:

Improved data processing speed, forecasting prowess, and analytical reporting can all help businesses.

Oracle ERP is defined by characteristics such as:

• Integrated webpage to improve communication with partners, clients, and service providers.
• Complex pricing allocation duties, such as tax computation, rates, promotions, sales tax, and more, are made easier.
• Database management is simple thanks to a solid IT infrastructure.
• Excellent functional capacity in the areas of manufacturing, administration, and communication.
• Intuitive interface, digital worksheet, social network connection, and more features

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Read: Is It The Right Time to Invest in ERP Software?

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Conclusion

Financial management can benefit from ERP systems since they provide improved visibility. Because of timely and effective inventory procedures, you obtain greater asset responsibility and lower the risk of loss, eliminating hidden costs and inefficiencies.

You can prevent wasting money on unnecessary capital expenditures for resources you already possess and can redistribute by having better visibility and control over your assets.

For your organization, modern ERP systems provide better access and security. The flow of control is accessible to all components of the finance department.

ERP features make life easier in finance by allowing operators to keep on top of their game at all times and increasing the return on their day-to-day operations.

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