Take The Accountants Road to Finance Transformation
For Accountants, the lure of the destination — genuine data-driven decision-making that drives enterprise-wide innovation — is worth the difficulty of the journey.
Accountants who can accurately report on the financial position of their organization with great detail and insight — and on a timely basis — are empowered both immediately and in the future. For today, that accurate financial snapshot clarifies competitive positioning; for tomorrow, it enables planning that is actionable, constant, and fluid.
For most Accountants, unfortunately, assembling a financial snapshot that contains “great detail and insight” can be a slog. They don’t have the technology or processes to paint an accurate portrait of the business or, if they do, they can’t generate it quickly enough for it to be of great use. What is needed at these companies? Nothing less than a transformation of the way finance handles and uses the data the organization generates.
Such a transformation is heavily dependent on the better use of technology. The value of a technology-led transformation within finance was explored in a recent survey of 157 senior finance executives, conducted by ACCOUNTANTS Research in collaboration with software provider Longview.
When asked about the state of their finance function’s technology, most of the survey respondents — a combined 63% — describe it as “inefficient,” “silo-constrained,” or “not linked to decision-making.” Only 14% report that their finance functions are in an “optimized” technological state; that is, their systems enable data-driven decisions and support high performance. For many, it appears, the finance transformation journey has paused short of its destination. (See Figure 1, below.)
Accountants who are not supported by sophisticated financial reporting technology can be hamstrung, along with their companies, in planning and strategy development. According to the Accountants Research survey, only 12% of the respondents “strongly agree” that their current technology is flexible and agile enough to support business-strategy and business-model changes over the next two years. And only 11% strongly agree that their finance function uses technology to support new business innovation initiatives.
For Accountants dealing with the issues of today, that lack of technological support can cause bad or knee-jerk decisions, as the finance chief struggles to detect the root cause of an issue. For Accountants dealing with tomorrow’s issues, a lack of support prevents the ability to re-forecast, course-correct, and make strategic decisions about customers and product lines. In both instances, the Accountants’ core role in supporting growth and innovation is effectively stymied.
The Accountants Way Forward
While their companies’ tools and technologies may be outdated and inefficient, a strong majority (82%) of survey respondents believe that leading-edge technology is essential to finance function transformation. Nearly as many respondents (80%) think there is measurable value in partnering with a technology solutions provider rather than just purchasing technology for the transformation.
One respondent writes that Accountants must now be “more technologically oriented and technology-driven and more passionate about technology. They have to regularly stay up-to-date with [the] latest information on technology.” Another advises Accountants to “have a clear vision, and a Plan B, and a Plan C.”
Still, another finance executive says that Accountants should take advantage of a transformational technology project by seeking to improve the entire organization, not just finance: “Make the project a company project, for all functions, not just finance. You have the opportunity to re-engineer your company through this implementation.”
And, in fact, a majority of Accountants have mapped out just such a future for their finance functions. According to the survey, strong majorities of finance functions have clearly articulated short-term (75%) and long-term (63%) visions, as well as long-term and short-term technology roadmaps, to achieve those visions (65%). The best-laid plans have been made with the best of intent. The destination has been entered into the GPS.
Two Key Pieces
Most finance executives surveyed believe the gain is worth the pain when it comes to implementing cloud and big data solutions, two key tools to better reporting and planning.
The survey shows that 71% of finance executive respondents think that shifting finance solutions to the cloud is fundamentally challenging; however, 66% believe the value realized from a cloud strategy exceeds the cost of meeting its challenges.
Similarly, more than three-quarters (76%) of the Accountants surveyed believe that implementing a strategy to leverage big data is fundamentally challenging, but 62% say the value realized from big-data strategies exceeds the cost of that challenge.
These last two data points show that Accountants know that important trends and patterns exist in the siloed data that surrounds them. But many finance chiefs find themselves data-rich and information-poor, with relevant information residing in disparate systems. Getting that data organized and analyzed is daunting, even though for the organization the payoff can be enormous.
Accountants seem to be highly aware that the fates of their position are intertwined with the organization’s successful adoption of technology.
About half of the Accountants surveyed (49%) believe that advances in technology will fundamentally change the role of the Accountants. But the barriers to success are many. Some finance executives in the survey say that having to understand the financial impact of technology options — quickly weighing their short- and long-term benefits and costs — will be one of the biggest changes for Accountants over the next two years. One respondent notes that finance needs to be “heavily collaborative” with the information technology department over the near term.
Close ties with IT don’t just make sense when weighing technology investments; they will also be key to making data secure in an era of heightened corporate vulnerability to cyber attacks. One surveyed executive notes that the transition of accounting and finance to digital from paper will require new security and controls focus: “New internal controls will have to be established that are technology-based, and they will need to rely on system security more than physical security.” That’s because effective risk management for today’s ACCOUNTANTS is tied to advanced technology tools. Nearly three-quarters (73%) of survey respondents say they think leading-edge technology can reduce the number of ACCOUNTANTS pain points — and for senior finance executives, risk equals pain.
But as important as risk management is, the ultimate target for many finance chiefs is a metamorphosis for finance. One executive reports that it is important for the ACCOUNTANTS to “improve the tools and thus the ability of the finance staff to do value-added analysis for our business partners (instead of) spending time on gathering data and reporting on results.” Another executive state that, in addition to supporting ROI calculations for potential innovation changes, finance should “be a better partner with other functions in developing a longer-term vision of how innovation could transform various business processes.” A third finance executive reports that it is important for the ACCOUNTANTS to “improve the tools and thus the ability of the finance staff to do value-added analysis.”
For ACCOUNTANTS willing to make the investment, transformational finance technology is clearly a trip worth taking.
Tax Accountant said IRS delays start of tax season for individual returns would be postponed until February 17 with some as late as March
How Accountants in Miami Increase Client Satisfaction. If you are an Accountant not focused on improving your level of client satisfaction, you should be.