RSM and DFCG publish results of the 3rd Observatory on the Digitalization of SMEs & Mid-Sized Companies

To Accelerate Transformation: 3 Opportunities to Seize Urgently!

For the third consecutive year, RSM, the 6th largest global network for audit, consulting, and accounting, and DFCG, the National Association of Financial Directors and Management Controllers, publish the results of the 2023 Observatory on the Digitalization of SMEs and Mid-Sized Companies (ETI-PME). This study aims to shed light on the evolving role of the CFO and the key challenges to anticipate in the context of rapidly accelerating digital transformation within companies.

Key Takeaways: Despite human resource shortages and the lack of attractiveness of certain roles, finance functions are eager to play a key role in their company’s transformation. However, they are hindered by an operationally-focused daily routine and limited resources, especially in terms of human capital, making it difficult to drive change. Even with the constraints of regulatory calendars, many companies struggle to anticipate the transitions needed, such as implementing electronic invoicing or meeting the requirements for extra-financial reporting.

The Proven Benefits of Digitalization…

The results of this third edition highlight the central role of CFOs in establishing a culture of change within companies.

Amaury de la Bouillerie, RSM Partner and Finance Consulting Specialist, explains:

"We aimed to distinguish what is more of a cyclical change from what constitutes a structural trend. The goal was to provide business leaders with a broader perspective, enabling them to build a medium- to long-term vision."

The results emphasize that digital transformation is not limited to the mere digitalization of processes. It also involves significant organizational and cultural changes. Financial Management Departments (DAFs) are therefore essential in supporting teams and driving change to ensure the success of digitalization projects. 74% of respondents say they are involved in defining the strategy and business model with the general management.

Thus, it is understood that digitalization within SMEs and mid-sized companies is essential for improving operational efficiency, optimizing financial processes, and providing more informed decision-making through reliable and relevant data. Moreover, companies are eager to evolve their organizations, viewing digitalization as a driver of growth, innovation, and even recruitment. 52% of respondents believe that the level or plan of digitalization is an asset for attracting talent.

An integrated approach to transformation allows for a comprehensive understanding of change as a transversal process impacting all aspects of the business. To illustrate this, Marine Cochard, SVP Controlling & Finance Transformation at Believe, interviewed for the study, shares:

"Believe implemented a very rapid transformation program where digitalization is just the vehicle. It’s a means. Transformation is not just digital."

The effectiveness of a well-managed digital transformation also highlights the level of outsourcing for certain finance and HR activities. To ensure unified automation of different data flows, it is crucial to manage these external collaborations effectively and maintain proper control over key processes.

…With Significant Challenges and Barriers to Overcome, According to CFOs

The challenges of digital transformation vary depending on the type of company.

For SMEs, it is essential to move away from production tasks and focus on higher-value tasks. However, the lack of resources and skills within teams can be a major barrier to this transition.

As for mid-sized companies (ETI), the key challenge lies in managing change, including the integration of "historical" employees. Internal collaboration and the swift implementation of new tools are vital for a smooth and successful transformation.

The Observatory confirms three priority levers to focus on:

1. Electronic invoicing: 38% of companies have not yet started this transition (compared to 44% in 2022);

2. Corporate Social Responsibility (CSR): 52% of respondents have implemented a CSR strategy in their company, but this is not yet integrated into digitalization processes;

3. Business Intelligence (BI) & Data Visualization: These tools help facilitate access to financial data, ensure its quality, and automate reporting to save considerable time.

Amaury de la Bouillerie comments:

"These findings highlight the importance of communicating the benefits of digitalization to stakeholders and reassuring them, while also showcasing project culture and the modernity of the tools."

By emphasizing the tangible benefits of digitalization, companies will be able to gain buy-in from their teams and attract the talent necessary to drive their transformation.

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