The Digital Transformation of the Finance Function: An Exploratory Analysis

Abstract

The aim of this master thesis is to explore how digitalization is transforming finance functions, thereby addressing an increasingly prominent area of focus, in which a significant gap in research exists. By using a mixed-methods approach, this paper places particular emphasis on investigating how digital tools alter the roles and responsibilities of finance professionals, how it affects financial decision-making and strategic involvement of the finance function, and finally which risks and challenges firms face when digitalizing their processes. Two individual in-depth interviews and a survey questionnaire that obtained in total 67 responses was used in order to gain primary data insights, facilitating a clearer understanding of the ramifications of digitalization in practical reality. The data collected in the survey was utilized to develop various cross-examination tables, enhancing the interpretability and usefulness of the findings. The insights gained from the interviews and survey was combined with reports and articles, facilitating further discussion and comparison with the primary data. Moreover, the thesis utilizes the contingency theory to help interpret and examine the findings. The findings in this thesis suggests that the roles of finance professionals are restructured to a greater extent in larger companies, and the extent to which roles are redefined depends largely on the firm’s digital maturity, the industry in which the company belongs, and the readiness of the finance professionals. Moreover, it was found that the adoption of digital tools in the finance function provides value at the strategic level and certain digital tools enable greater strategic involvement than others. The strategic involvement of the finance function is increasing with firm size. Lastly, challenges to digitalization was found to be present in all firms represented, but differ significantly depending on the industry and size of the firm.