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Individual Assignment #1 Angad Singh ( 2231089) University Canada West CMPT 641: Digital Transformation Prof. Afshin Doust February 3rd, 2024

Introduction The core of the economy in our province is made up of small companies. In British Columbia, 98% of all enterprises are small ones. With 510,700 small enterprises and a population of 5.2 million, one in ten British Columbians are entrepreneurs in some capacity. (Small Business Profile, 2022). As your committed consultants, we value the chance to learn more about digital transformation and how it might affect your prestigious family-run accounting and financial consulting firm in Vancouver, British Columbia. We are excited to make a strong case for embracing digital transformation as we appreciate your leadership and the success your company has had under your direction. Assumptions  Nu mber of employees & employee position : According to Small Business Profile data, small businesses have fewer than 50 employees. To reflect the variety of skill sets required for our range of services, we assume a committed team of twenty-five workers, including accountants, financial consultants, administrative personnel, and IT support specialists.  Current issues: The paper-based system presents several challenges, the most important ones being storage constraints, possibilities for data mistakes, and challenges with document retrieval.  Work process: The current work processes are primarily manual and paper-based, which might result in processing times that are longer than necessary, errors that are more likely to occur, and potential inefficiencies.  Inefficiencies: The company's reliance on paper-based systems causes accessibility issues, difficulties retrieving documents, and inefficiencies in manual data processing.

Adopting digital transformation can help address these problems and improve customer service, teamwork, and operational effectiveness.  Corporate culture: Major decision-making in the company is headed by the CEO under a hierarchical organizational culture. Our aim is of a culture that embraces innovation and progressive development while also placing a high emphasis on tradition.  Client Base: The company's main goal is to serve customers in British Columbia, which puts us in a leading position in the local market. Digital transformation, in our opinion, may further improve our capacity to meet and beyond client expectations.  Client expectations: It is assumed that customers' needs and expectations are changing, leading to a growing need for streamlined, cutting-edge solutions. It is imperative to adjust to these expectations to preserve customer pleasure and loyalty. What is Digital Transformation? The essential rewiring of an organization's operations is known as digital transformation. According to the new McKinsey book Rewired: A McKinsey Guide to Outcompeting in the Age of Digital and AI (Wiley, June 20, 2023), the objective of a digital transformation should be to create a competitive advantage by consistently deploying tech at scale to enhance customer experience and reduce expenses. Distinction between digital transformation and business transformation Table 1 Distinction between digital transformation and business transformation PARAMETERS DIGITAL TRANSFORMATION BUSINESS TRANSFORMATION DEFINITION A digital transformation The initiative to modify the

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platform aims to restructure business operations from the ground up using digital capabilities. company model in order to implement major organizational changes is known as business transformation. FOCUS Enhancing the organization's digital capabilities to meet its objectives, address problems, and take advantage of opportunities is the main objective. The main objective is to implement a new business model that will revolutionize the company. The offerings, values, and identity of a corporation are often radically changed. SPONSOR A program for the digital transformation journey should be sponsored by the CTO, or someone equal. A company transformation project should be sponsored by the CEO or a suitable leader. SCOPE Digital transformation could be a part of a corporate transformation effort. Ideally, the digital transformation plan should not affect the business model. TRIGGER The following are just a few possible catalysts for digital transformation services: 1. Make the most of technology as it is available to benefit your business. 2. Use digitization to solve problems in business. 3. Improving the experience of its stakeholders (suppliers, workers, and customers) 4. Strengthen openness 5. Boost productivity in the workplace The following are some of the few possible catalysts for corporate transformation: 1. Notable shifts in customer perception, demand, and trend. 2. Potential inapplicability of company offers. 3. Environmental (commercial, social, and political) modification. 4. Not being able to grow for a long enough period to keep things running. 5. Rivalry Tangible & intangible merits of digital transformation

In 2007, the international financial services corporation BBVA, based in Spain, started a digital transformation process with the aim of improving client connections by providing digital self- service choices. BBVA increased its transformation to develop and sell new digital banking products, prioritizing organic client development, given that almost two-thirds of total sales came from digital channels. Between November 2020 and the same month the following year, there was a notable 73% increase in engagements, from 11 million to 19 million, thanks to the incorporation of machine learning for individualized financial advice, which encouraged customer loyalty. Since 2012, BBVA and Google have worked together to integrate technology. This has reinforced cybersecurity, increased employee happiness, and resulted in a notable reduction of the product development timetable from two years to nine months. BBVA has evolved into a comprehensive digital company dedicated to constant innovation and leading the financial industry. Its Banking-as-a-Service (BaaS) offerings, exemplified by digital debit cards for Uber drivers, are the result of innovative partnerships with companies like Uber, Mastercard, and Accenture. The purpose behind the given example is to make the reader understand the importance and values, whether it be tangible or intangible, they add to a company and in whatever industry they are operating. Following are some of the points where digital transformation adds tangible values:  Improved cost efficiency and flexibility : Operational cost savings are achieved through the automation of workflows and procedures. Tasks are frequently streamlined, human errors are decreased, and resource usage is optimized through digital transformation, producing quantifiable cost savings. (Medium, 2017).

 Improved customer satisfaction : Better digital interfaces for document sharing, collaboration, and real-time reporting help to improve client experiences. Increased client retention, favorable reviews, and recommendations for new businesses are examples of tangible signs.  Billing and invoicing efficiency : Financial transactions, payment tracking, and invoicing are all made easier by automated billing systems. Reduced billing errors and quicker cash cycles are two results of this efficiency. Intangible values:  Reduced risks : There is less probability of failure in an IT environment. By automating daily updates, communications, workflows, internal and external processes, and collaborative feedback at the end of each sprint, an agile approach to digital transformation removes as many bottlenecks as possible and prepares the company for the future. Nothing is missed, and every issue can be resolved with ease (Medium, 2017). Furthermore, based on the data of China's listed commercial banks from Q3 2010 to Q1 2022, this article empirically investigates the influence mechanism, heterogeneity influence, and action channels of DT on bank systemic risk. This study concludes that DT lowers the systemic risk to banks. The systemic risk of banks decreases with increasing DT. The decrease of bank systemic risk by DT is mediated in different ways by the innovation effect and the cost effect (Ting Yao, 2023).  Employee satisfaction : Positivity in the workplace is enhanced by giving employees access to contemporary equipment and resources. Intangible value is reflected in enhanced employee morale, satisfaction, and perhaps decreased turnover rates.

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Risks associated with digital transformation. With the advent of digital transformation, our work and lives have become smooth and easy, but we can’t ignore the risks it poses and how it can impact your privacy and future. Having stated that, the following are some of the dangers businesses face when implementing digital transformation:  Data breaches : A data breach can occur for a variety of reasons. Nevertheless, the majority lead to information getting into the wrong hands and hurting the business or its customers. Companies using antiquated software that is incompatible with more modern security protocols or technologies is one instance that could result in a data breach (BoTree Technologies, 2023).  Cyber-attacks: One important digital strategy risk management tactic is cyber-security. Cybercriminals may utilize a variety of techniques to obtain firm data for their nefarious purposes. According to Statista, among other infractions, phishing, identity theft, and ransomware are a few instances. Therefore, by not having the newest in cyber security, businesses that fail to embrace digital transformation may leave themselves vulnerable to cyberattacks.  Loss of sensitive information: Any company's daily activities involve sensitive data such as trade secrets, customer or worker information, and others. Businesses may be sufficiently motivated to change their digital transformation processes to incorporate more rigorous security safeguards just by the prospect of any of them coming to light. Figure 1 Number of security incidents and breaches by victim industry

Note : Bar graph of industries that faced security incidents and breaches. From “ASSESSING THE RISKS AND STRENGTHENING CYBER SECURITY”, by C. Alexandru, 2023, The Annals of the University of Oradea. Economic Sciences, p.774 ( DIGITAL TRANSFORMATION VULNERABILITIES: ASSESSING THE RISKS AND STRENGTHENI...: EBSCOhost ) Impact of digital transformation on organizational culture and which is best for DT? Most executives understand that in the constantly evolving digital landscape, adaptability is essential for survival. They occasionally forget that an organization cannot change on its own; all its workers must be involved. Thus, culture bears equal importance to strategy. And each worker adds something to this culture. The following are how culture is impacted by digital transformation:  Adaptability : To succeed in this vein, it is essential to understand the distinctions between the following three fundamental ideas. They're: 1. Strategic agility: how a business chooses to change.

2. Organizational agility: how a company implements transformational processes. 3. Operational agility: how quickly the transformation happens. The goals and values of an organization can have a big impact on how these three agile approaches are used and utilized to accomplish digital transformation.  Consumer-oriented: By integrating "smart" technology, businesses can leverage precise insights into customer behavior for smooth, real-time interactions through advanced analytics. An advanced degree of personalization in the purchasing experience is ensured by personnel who strategically use these technologies to improve client interactions within a well-established company culture. To successfully implement digital transformation in the company, it is essential to consider a few organizational cultures that can benefit: 1. Cross-functional collaboration : A major objective of digital transformation is the dismantling of digital silos. Building down departmental barriers and fostering a collaborative company culture are necessary to achieve this. If there is a tendency toward hierarchy in your company, you might want to introduce structures such as virtual working groups to encourage cross-functional cooperation and guarantee accountability between colleagues in different departments. 2. Buy-in at every level of organization : Is improving your digital environment a top priority for everyone in your organization? IT personnel or management guidelines shouldn't be the only ones to acknowledge the significance of this project. Every level is impacted by digital modernization, therefore it's important to have a common

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knowledge of its advantages as well as how it affects people's duties and responsibilities. Kaplan and Norton’s Balanced Scorecard Table 2 Kaplan and Norton’s Balanced Scorecard (four key areas) Balanced scored perspective Challenges Mitigation Financial perspective  Reliance on the Lagged Measure.  Short-Term Focus.  Incorporate Leading Indicators.  Equilibrated Time Frames. Customer perspective  Subjectivity in Client Contentment.  Shifting Expectations of Customers/clients.  Employ objective metrics (such as CES and NPS).  Constant Feedback Loop. Internal business processes perspective  intricate process diagrams.  Opposition to Change.  Make Metrics Simpler.  Strategies for Change Management. Learning and growth perspective  Measuring Learning Is Hard.  Workplace Involvement.  KPI Utilization for Educational Programs.  Tailored Growth Strategies. Note : Kaplan and Norton’s Balanced Scorecard (four key areas) depicting challenges and how to mitigate, 1992. From the Conceptual Foundation of the Balanced Scorecard, Conceptual Foundations of the Balanced Scorecard: EBSCOhost Challenges under the UTAUT Model

 Perceived usefulness: Workers who are used to conventional, paper-based procedures could doubt the apparent value of digital tools in their everyday work. If they cannot see how the change would improve their efficiency or effectiveness, they may oppose it (Davis, 1989).  Behavioural intentions of use: The degree to which employees feel comfortable using technology may influence their aspirations to utilize digital tools. Employees who believe their present approaches are adequate or who lack understanding may become resistant (Venkatesh, 2003).  Technological anxiety: Digital tool adoption may be hampered by employees' fear or worry about utilizing new technology, particularly if they are not tech-savvy. It is imperative to tackle these issues by providing knowledge and assistance (Brosnan, 1998).  Social influence: Social influence may be impacted by the CEO's decision-making authority within a hierarchical organization. Resistance to the digital transformation process may surface if staff members do not feel empowered or supported (Chau, 2002).  Facilitating conditions: The current setup—both technologically and in terms of organizational support—may make the shift difficult. There must be sufficient training, support mechanisms, and resources available (Venkatesh, 2012). It's critical to foster an optimistic outlook on the digital transition by highlighting its advantages for each employee as well as the company's overall performance. Recommendations Based on the above discussion regarding the values that digital transformation adds to the firm along with the risks and challenges it poses, I would like to propose some

recommendations that will help you understand how to implement DT and what needs to be kept in mind. 1. Accounting software used by enterprises is not a recent development. Accounting software trends indicate that the industry was already valued at $12.01 billion in 2020. By 2026, it is expected to increase even further to $19.59 billion (Research and Markets, 2021). Below are some of the popular accounting software:  Sage Intacct: Accounting solutions including cash management, accounts payable and receivable, and spend management are provided by Sage Intacct. Our evaluation of Sage Intacct offers a more thorough examination of the program.  Sage Business Cloud Accounting: Accounting, cost control, and compliance management are all integrated into one platform by Sage Business Cloud Accounting.  Gusto: Gusto can handle payroll automatically, ensuring that human mistake is eliminated. 2. Being efficient data managers and collectors is a difficulty for today's accounting professionals and firms. They must adhere to security best practices to do this, which include encryption and backup procedures, appropriate access and protocols, and physical security measures. Security training for staff members and a backup plan if a data breach does occur should be included in these efforts (HostReview, 2016). 3. The trend is for accountants to deliver value to clients. 79% of accountants in the US say that client expectations have evolved to include business and finance consultancy (Sage, 2020). You can achieve this by knowing your client’s revenue streams and

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business models so that you can dispense sound financial advice. Firms must analyse internal and external data about customers, markets, distribution channels, and competitors so they can help businesses formulate their strategies and make decisions (Management Accounting, 1991). 4. Having all accounting and other critical data under one roof—your ERP—can provide a number of advantages for the business. In the first place, it saves the business money on employee training under disparate systems and spares staff members the time it would take to find misplaced information across multiple apps. Secondly, because teams share a single source of truth, collaboration is enhanced. Third, executives may easily access data for analytics and reporting, which facilitates decision-making (SelectHub, 2021). Conclusion In conclusion, your family-owned business in Vancouver, British Columbia, needs to embrace digital transformation to get past issues with paper-based methods. Drawing on BBVA's achievements, digital transformation provides both measurable and intangible advantages, such as reduced risk and improved workplace culture. Tangible benefits include increased customer satisfaction and cost-effectiveness. Strong cybersecurity measures are necessary to reduce potential dangers such as data breaches and cyber-attacks, even with the benefits. Digital transformation fosters an organizational culture that is flexible and focused on the needs of the customer by aligning with evolving customer expectations. Adopting effective accounting software, placing a high priority on data security, becoming financial consultants, and combining data under an ERP system to enhance collaboration are some of the recommendations.

To put it simply, digital transformation is a cultural shift as much as a technological one that will position your company for success in the digital age while also meeting client expectations, increasing productivity, and guaranteeing long-term competitiveness.

References Alexandru, C. (2023, July 1). Digital transformation vulnerabilities: assessing the risks and strengthening cyber security. Annals of the University of Oradea, Economic Science Series, Vol. 32 Issue 1, p771-781. DIGITAL TRANSFORMATION VULNERABILITIES: ASSESSING THE RISKS AND STRENGTHENI...: EBSCOhost B.C. Ministry of Jobs, Economic Recovery and Innovation. (2022). Small business profile 2022. sb_profile.pdf (gov.bc.ca) BoTree Technologies. (2023, February 1). Digital transformation risks and challenges. Digital Transformation Risks and Challenges (botreetechnologies.com) Brosnan, M. (1998). Technophobia: The psychological impact of information technology. Routledge Technophobia: The Psychological Impact of Information Technology (Book): EBSCOhost Chau, P. Y. K., & Hu, P. J. H. (2002). Investigating healthcare professionals’ decisions to accept telemedicine technology: An empirical test of competing theories. Information & Management, 39 (4), 297-311 . Investigating healthcare professionals' decisions to accept telemedicine te...: EBSCOhost Chheda, S. (2023, July 23). Rewired for value: Digital and AI transformation that work. McKinsey Insights, 1p. Rewired for value: Digital and AI transformations that work: EBSCOhost Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340 . Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Informa...: EBSCOhost

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Deb, A. (2016, September 15). 6 Practical Tips To Keep Your Accounting Firm’s Data Secure . HostReview . Hood, M. (2021, February 16). The role of organizational culture in digital transformation. Forum one. The Role of Organizational Culture in Digital Transformation | Forum One Kaplan, Robert, S. (1992). Conceptual Foundations of the Balanced Scorecard. Havard Business School, Harvard Business School Working papers: 10-074. Conceptual Foundations of the Balanced Scorecard: EBSCOhost Maldoff, J. (2023, June 8). 6 ways digital transformation can impact your company culture. Intellera. 6 Ways Digital Transformation Can Impact Your Company Culture - Intellera McKinsey & Company. (2023, July 14). What is digital transformation? What is digital transformation? | McKinsey Medium. (2017, October 3). 5 tangible benefits of digital transformation. 5 Tangible Benefits of Digital Transformation | by Digicor Australia | Medium Oliver, L. (June 1991). Accountants as Business Partners . Management Accounting . O’Shaughnessy, K. (2021, June 24). 8 Reasons Why ERP is Important . SelectHub Research and Markets. (2021, April 19). Global Accounting Software Market (2021 to 2026) – Growth, Trends, COVID-19 Impact, and Forecasts. Research and Markets . Ting, Y. (2023, December 1). Can digital transformation reduce bank systemic risk? Empirical evidence from listed banks in China. Vol. 56 Issue 6, p4445-4463. Can digital transformation reduce bank systemic risk? Empirical evidence fr...: EBSCOhost

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: Toward a unified view. MIS Quarterly, 27(3), 425-478 . USER ACCEPTANCE OF INFORMATION TECHNOLOGY: TOWARD A UNIFIED VIEW: EBSCOhost Venkatesh, V., Thong, J. Y., & Xu, X. (2012). Consumer acceptance and use of information technology: extending the unified theory of acceptance and use of technology. MIS Quarterly, 36(1), 157-178 . CONSUMER ACCEPTANCE AND USE OF INFORMATION TECHNOLOGY: EXTENDING THE UNIFIE...: EBSCOhost Veritis transcend. (n.d.). Business transformation vs digital transformation: A thin line of difference! Decoding Business Transformation Vs. Digital Transformation (veritis.com) Zwan, R. (2023, October 12). 19 examples of digital transformation companies. Yenlo. 19 Examples of Digital Transformation Companies - Yenlo

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