Chief Financial Officers and finance teams are no longer the ‘folks who do the figures’. Advances in technology and changing expectations from other business areas mean their roles are now shaped by data’s function in a business – and finance teams can now use data to become soundboards for significant decisions.
Consequently, the way we analyse data is dramatically changing which skills matter the most to the modern finance team. Being able to collect data is a lot easier than in the past – and now the onus is on analysing that data effectively and quickly to stay as agile as possible in a changing macroeconomic and regulatory environment.
Agility comes in many forms and, surprisingly, can be helped or hindered by technology under certain circumstances. Here’s how the finance team gets tech right to stay agile.
Escaping the shackles
When it comes to creating one-off inquiries, monthly financial statements, or management reports and dashboards, time-consuming manual processes can still place a huge burden on finance teams and prevent them from fulfilling their broader business partnering remit.
This isn’t just a productivity issue. Manually dumping data from enterprise resource planning (ERP) systems into Excel spreadsheets and manipulating by hand leads to errors that erode trust and confidence in the numbers being reported.
However, the good news is, with the support of specialised software, we’re seeing more and more financial controllers escape the shackles of their data extraction responsibilities and upskill to more value-added, analytical roles. These new roles introduce an extra level of agility into the finance team, giving members what they need to react to events quickly.
Despite these advances, technology can also obstruct the agility of the finance team in some endeavours, especially when other teams pushing new financial technology come from a non-financial background. This dichotomy is most often played out between the finance and IT team.
Finance and IT – a perfect match?
The current case in point is the shift to the cloud. There’s a big drive by all vendors to push applications to the cloud, and many in-house IT departments are keen to embrace the cloud with its promise of lower total cost of ownership and simpler upgrades.
While the direction of travel is undoubtedly towards the cloud, this is a transformation that is going to play out over the next 10 to 15 years. So, the question is when is the right time to make that shift? For finance teams today, this isn’t clear cut.
Just like an on-premise ERP upgrade, moving core financials to the cloud is a huge, time-consuming migration project, which introduces risk and disruption. So for finance there needs to be a compelling reason to make the move and a clear return on investment. Otherwise the team’s agility is severely hindered.
The reality is finance teams just want access to data – where it sits doesn’t matter. So, while IT departments may enthusiastically proclaim, “We have a cloud strategy,” you rarely hear “My life would be better if my data were in the cloud,” from finance team members.
So, for most finance teams having easy access to real-time information from their ERP system, with the ability to quickly answer ad hoc inquiries, and automatically produce and share periodic reports and dashboards, is more important than whether their data lives on-premise or in the cloud.
We are certainly seeing reticence to move to the cloud for this reason. Without specific, smart, tech-based connectors that make running reports against cloud-based ERP systems as fast and easy as against on-premise systems, there is less incentive to move to cloud. But as time rolls on, these challenges are being fixed as new technology comes to market.
Starting the conversation now
Finance teams need to be agile as more regulations and reporting requirements come their way, such as General Data Protection Regulation (GDPR), gender pay gap reporting, and Brexit-based uncertainties. Reacting quickly to changes requires a team that can access and analyse data quickly without having to worry about where that data is sitting.
To reach a common consensus, finance and IT teams should work together to understand whether certain software and specific cloud platforms are necessary for what the finance team needs to achieve. Reviewing the scope of any cloud application is important to determine if the risks outweigh the overall benefits, to ensure the optimum level of agility is reached.