The role of transformational leadership in finance department technology adoption

Finance transformation and challenges of transformational leaders to deliver more effective and efficient services based on leveraging new technologies and business models.

Informational Technology and Business

Implementation (The Role of the CFO)

Operations (Parallel between finance, marketing and Big Data)

The power and necessity of outsourcing

Finance transformation and challenges of transformational leaders to deliver more effective and efficient services based on leveraging new technologies and business models.

In today's challenging economic environment, it can be hard to justify an investment in the finance function. But financial leadership may be exactly what your company needs. Leading CFOs know that a strong finance function is vital to helping them guide their companies through difficult times. There is no doubt that the role of the financial executive is constantly evolving. This brings opportunities for the Finance Department as a whole to get a seat at the table when it comes to making important business decisions and it also results in new challenges that senior finance leaders must overcome in order to meet expectations of their organization. Workloads are increasing while staff levels stagnate, and the nature of the work is changing, too. However, there are new technologies that can help with these challenges.

For example, master data management systems are the new innovation to help with these challenges. This software is amazing because it is able to address critical business challenges such as high operational costs, undistinguishable customer service, high risk related with regulatory agreement, the need to introduce new products rapidly, and the incapability to cross-sell and up-sell, MDM make available a trusted outlook of critical entities typically stored and potentially duplicated in siloed applications - customers, suppliers, partners, products, materials, accounts, etc. MDM is a discipline that provides a consistent understanding of master data entities, and their relationships and chain of command. However implementing this technology has a lot to do with a leader that is considered to be transformational. The role that transformational leaders play in an organization -- which is effecting organization wide change. They can engender these results best via the usage of many of the aforementioned new technologies.

Few researchers address the link between information technology and leadership, and even fewer address the relationship between transformational leadership and knowledge management. According to Klenke (1994), information technology and the actions of leaders create new organizational forms. The relationship between innovation and leadership is difficult to articulate given the variety of functional leadership behaviors and the range of information technologies. Technology and leadership have reciprocal effects on each other; a change in one necessitates a change in the other. Brown (1994) speculated that transformational leadership is needed in an evolving technological society. Societally, we are moving from controlled change to accelerated change nearly beyond control. Transformational leaders must meet market demands faster and better than before, given the increasingly interdependent economy

With that said, this paper will show that widespread deployment of analytics throughout the financial department can help transformational leaders revamp and improve their respective financial departments, and in doing so, their respective organizations as well by implementing these forms of new technology.

Informational Technology and Business

One thing that needs to be understood is that the major transformation that transformational leaders are tasked with is to revolutionize the concept of IT and relate it to the business. Transformational leaders are generally energetic, passionate, and fanatical. Not only are these select few concerned and tangled in the development; they are likewise the type of leader that you will find focused on helping every associate of the group prosper additionally. It is clear that specifically, the consumerization of IT is occurring and the business is tasked with utilizing various IT technologies to better accomplish its business objectives.

Research shows that transformational leadership style is the type that depicts positive effect on leader revolution. Understandably, goals can contribute to level-based accomplishment. According to Bharadwaj (2013) they discovered that transformational leadership style has a good affect when it comes to leader innovation. This was confirmed in development to affect workers permitted they appreciate and decide to become effective in assisting the accomplishment of a common goal effort. His research shows that the transformational leadership style is crucial for design innovation by equating the positive remunerations of a collective idea to achieve the task. Bharadwaj established that transformational leadership flair has optimistic effect on leader invention that has the influence to construct a positive personal power. It has even been suggested that transformational leadership style was completely connected with leader innovations in technology. These type of leaders will always do things such as give the model and instructions to workers in regards to the work behavior of leadership in agreement with rules and donate to an association.

According to Bharadwaj (2013) this transformation will require a collaborative effort on the part of both IT and business units (most saliently finance). Throughout the past three decades, the dominant interpretation of IT strategy has been that of a functional-level policy that must be allied with the company's selected business approach. Even within this supposed alliance view, business strategy absorbed IT strategy in spite of calls for identifying the prominence of IT strategy shaping business strategy and converting commercial procedures and business opportunity

Information technology has a relationship that was positive with leader innovation. Furthermore, it was demonstrated to be rationally to define the leader proficiency in institute. The research shows that the information technology is able to donate positive advantage for leader innovation to get truthful material to communicate correctly. Some have even made the suggestion that the situation of information technology has a positive relative to leader innovations in IT. It is able to give material to reply to the challenge and opposition of knowledge in globalization era, in addition to understand good authority in public sector. The company would really need a leader who is truthfully knowledgeable and have a competitive edge. It can be explains that positive effect of information technology on leader innovation in government system can inspire unanimity and high quality solution relative to each significance (Bharadwaj, 2013). In accepting organizational leaders, experts understand that work needs to be coordinated diagonally, horizontally, vertically, territorial practical, consultative, instructive, and coordinative. Bharadwaj suggested that information technology has positive effect on leaders that want to take technology to the next level. Existence of local government leaders was extremely vital as a rational significance of efforts when it comes to the public service.

With that being said, IT is no longer simply a functional aspect of a company, but should be aligned with its core business objectives as a means of best achieving them. Getting the business to buy into this concept, from C. level executives down to those in the back offices, is the initial and principle job of transformational leadership attempting to utilize new technologies for improved services in finance and other aspects of the organization.

Implementation (The Role of the CFO)

The most suitable leader for the sort of financial transformation that hinges upon utilizing new technologies and business models in order to deliver more advantageous services and products is the Chief Financial Officer (CFO). However, in the past so many years, it has not been what many would call a walk in the park for the CFO. Bad markets and technologies that were just plain no good forced the finance function to go back and just do a complete makeover of everything. In other words, they had to redefine their role in the organization. The days of collecting, reporting and paying are gone forever. There was a time when the CFO was having difficulties with their processes and models in an effort to deliver faster and more insightful and analysis reporting while at the same time being able to manage some of the risk and reduce the cost.

According to KPMG (2011) leaders should be seeking to transform their functions in order to deliver not just services that are good but services that are effective. From supplying more and more insightful business intelligence and forecasting to forestalling and responding to sudden marketplace disturbances, the CFO of today is looked at as being the person that has all of the business strategyor being the financial expert. It is clear that many of the effective transformation strategies put the empasis on raising the overall effectiveness on the function of the finance by bring down the cost and the complication of everything. However, the challenges that are facing the CFOs are being able to define their objectives in a way that is proper and also find a way for them to include both effeciency outcomes and value creation.

In some cases, this may mean for the CFO to invest in the function over the medium term rather than putting all of their attention on what is looked at as being the shorter term cost cutting orv more practically redirecting savings that come from the effiency gains to fund investments that are needed in order to make things much more succesful. In order for this process to take place, it is obvious that the CFO will need to be able to understand that services provide the most value to their customers and deliberately capitalize in bringing some strength to those capabilities. This will also require the CFO's to be able to communicate the true value of certain advantages that have been made around efficiency gains in order to construct a business case to secure the suitable budget people and rsources needed for there transformational strategy. Of course long after the transformation has been completed, the finace department will still be able to pursue business as normal with no loss of service quality or distruption.

The position of the CFO is clearly best suited for all of these tasks because they are able to wear two different hats in this role. Also, on the other hand, they create and enforce the rules and also the controls of the business. On the other the CFO must also find a way to work with their internal customers. To discover a way to turn those same rules into instruments that are able to bring some kind of growth to the company and also bring the organization a good advantage. This creates a natural and healthy tension among the controllership activities that are among the purpose and the financial analytical support activities that must be balanced and recognized the right way. What actually constitutes the proper balance of strategic services and calculated execution has a lot to do with the internal capacity, organization and industry. In each situation, the job of the CFO is to sit back and take a long-term point-of-view of their sevice models and make sure that their people, technology, structures and processes are suitable to meey the evolving needs of their organization.

Instead of always running towards transformation, the CFO will sometimes be the ones that are better served just by starting a continous and methodolgical change process that manages all of the disturbances with a controlled environment taking giant leaps or small steps in the direction of getting to their visionor transformation. The CFO are well aware that the long-term accolade of finance transformation must be balanced against the short-term risks that are essential to the dangers and recompenses that are inherent in the change process.

When it comes to accommodations in regards to Big Data for operations and transactional data, visual analytics is used. Owing to the complexities and incomprehensibilities in large-scale datasets ("big data"), interest has improved in visual analytics on account of humans' gift to rapidly gain awareness through visual analysis and decision processes. Regrettably, most state-of-the-art visual analytics tools or methods don't appropriately help big data. The important difficulties of visual analytics with big data have two main reasons. The first is associated to human awareness. When the quantity of visualized objects (features data or items) turn out to be large, humans often have exertion extracting information that is meaningful. The second cause is the limited screen space, which often leads to important visual clutter when an imagining shows too numerous data features or items.

To make visual scalability, computational methods are able to give compact, expressive information in regards to the raw data. These kinds of methods consist of dimension decline, gathering, and ways and means that exploit data mining and machine learning. These approaches' natural fit and application for visual analytics for big data have led to their addition into visual analytics. Nevertheless, by themselves they don't efficiently support real time interactive visual analytics for big data.

The advantages of a semantic standards based approach is that it is effective use of standards can make all the difference to the wealth of a business, an industry, or even a nation. It is very beneficial because in the modern world, semantic standards based approach is able to help businesses move past significant challenges and then be able to reach out to a far wider range of marketplace participants than ever before. When it comes to the core, semantic standards are what define the importance of business notions and their associations in a way that makes them understandable universally, both by machines and humans, in that way aiding automation and interoperability. At their best, semantic standards are able to act as a model of the world, authorizing the user to be able to map everything out and gain larger understandings into how procedures and actions need to be prearranged (Feeny, 2012).

Operations (Parallel between finance, marketing and Big Data)

Depending on what particular vertical industry an organization is operating in, it can utilize analytics in finance to enhance customer experience. This is done in many ways, one way is because it helps the customer at the right time and place. For instance, particular software called the SAS combines the customer insight which is derived from real-time data collection with the advanced analytics and business logic of enterprise decision management. So this tool helps by empowering to deliver exactly what the customer wants -- precisely when they need it. Rather than looking at the past and responding to issues as they come up, predictive analytics uses all of the data accessible in order to be able to predict how consumers are expected to answer. As soon as the data has been composed across internal, social, and regulatory sources, companies start putting the data to conclude where the most valuable information is at.

Ultimately, enhanced customer experience is one of the advantages of utilizing transformational leadership to leverage new technologies in the realm of finance. Provide examples of doing so such as fraud detection for credit card companies, or the ability to find real-time investment opportunities for companies involved in hedge funds, etc. Again, stress a strategic approach to doing so, since most companies fail in utilizing new technologies because of a lack of oversight about what such a process entails (Fitzgerald, Kruschwitz, Bonnet, & Welch, 2013, p. 6).Close out the paragraph by referring back to the thesis and the role that analytics and Big Data can play in transforming operations.

The power and necessity of outsourcing

Outsourcing analytics is a viable option due to the skills shortage revolving about Big Data and the fact that certain organizations can even provide data analysis for the enterprise. Not surprisingly, instead of addressing these challenges themselves, a lot of businesses are picking to outsource some areas and functions -- in some situations, even their whole worldwide back offices -- to business-development outsourcing earners. One example of outsourcing is the call centers; rising amounts of businesses are outsourcing their service support function to either local or offshore providers that can handle it more efficiently and at lower cost. More recently, companies including BP Plc and Bank of America NA have decided to outsource the transactional side of their human resources activity (Feeny, 2012). This trend in the direction of outsourcing of business developments continues to collect steam as companies seek alternative and improved ways of leveraging their possessions.

According to McIvor (2012) as the services sectors of emerging economies have grown in position, the inclination in the direction of services outsourcing, both domestically and internationally, has become more noticeable. Services outsourcing can be either task-preoccupied with or business process-leaning. Task-oriented outsourcing consist of the vendor finishing tasks such as data entry and technical support for the client. Process-oriented outsourcing includes the vendor taking responsibility for executing a business process for instance customer contact, and delivering it to the client as a service, frequently referred to as business procedure outsourcing (BPO) (McIvor, 2013).

The research shows that when it comes to outsourcing, BPO often includes outsourcing the organization supporting the business process, as well as the IT infrastructure. BPO focuses on how the general procedure methodology or function is operational, from manager to end user, more willingly than on the technology that supports the procedure. Services outsourcing furthermore consist of IT outsourcing, which encompasses the IT component of business operations, for example data centre and desktop processes. For instance, outsourcing the data center may consist of back-office support to an amount of business functions, for instance human resources and finance and accounting. In addition to outsourcing routine procedures, for instance data entry and transaction processing, to decrease costs organizations have increasingly been outsourcing procedures that impact competitive benefit (McIvor, 2013).