Why is Finance Not Taking Advantage of Emerging Technologies?

With the growth in business and opportunities widespread across the region, Asian-based businesses are poised on the threshold of immense activity. The Finance function holds an increasingly strategic, as well as operational, role in managing and supporting the enterprise in its quest for growth and profitability. Today’s technology applications provide the support needed to make the most of the opportunities – but Finance’s inherent risk aversion means it has lagged in moving forwards. Here is why it’s time to reassess this attitude. 10 Reasons Finance is Lagging in New Technology Applications, and How This is Hurting Your Business. Operational Finance departments could take a tip from the front-facing end of the business, which has been quick to embrace social media, mobile technology, and innovation in its quest for growth. The Association of Chartered Certified Accountants (ACCA), in its January 2014 Accountants for Business report, went as far as to accuse finance leaders of being "followers" as opposed to " innovators" when it came to adopting new technologies. With Finance still focusing first and foremost on delivering process excellence as opposed to driving growth and insight, the function is in danger of falling short of the expectations now being placed on it by business leaders. The survey asked: is Finance & Accounting keeping up with the changing world of technology? Asked differently, it could also be: is the power of technology being deployed to its maximum potential within financial services? The answer seems to be: No. While technology has the ability to act as a catalyst for finance – driving efficiency, lowering costs, forcing standardization, and improving controls – Finance leaders across the board are still hesitant about taking a big step forward when it comes to adopting new technologies. While this may be a "play it safe" strategy, the costs of lagging loom large on the horizon, especially when you consider that technology today also accesses the data and manages the analytics that are so important in driving business decisions, and that corporate leadership is looking to Finance to drive this growth. While the promise of "lights out" financial services has been dangled for decades, there are still few, if any, real examples of this in practice. Recent developments in technology – like robotic process automation, which promises a human-like "robot" to manage a screen interface – continue to drive Finance in this direction, however. So what are the main barriers to embracing new technologies? Here’s what – according to ACCA’s report – stands in the way, and a few valuable tips on moving forward: 1. Finance needs to take a lead in making technology decisions – not leave it to IT When it comes to selecting and implementing technology that promotes business intelligence, the decision too often rests with the IT department and the CIO, who are often still consumed with ERP issues. Finance leaders need to take the lead on this. No one understands the power of financial data like the CFO and his or her team. Only they are in the position to make the right technology choices. A recent survey by Gartner2 indicated that 39% of IT organizations today report to the CFO (compare 35% reporting to the CEO). It also cites CFOs authorizing technology investments in a quarter of cases. The trend is widely expected to increase, which would bode well for aligning technology to Finance’s changing role. 2. Traditionally risk-averse, Finance folk need to evaluate what an overly careful approach is costing them Traditional financial thinking, which is based on rules and risk elimination, may be hampering a more innovative approach that would benefit technology selection. While it may sound harsh to accuse Finance leaders as "lacking in imagination", as one practitioner insinuates in ACCA’s report, it may be time to knock down a few fences. If the Sales function has seen fit to take on some risk by adopting Salesforce.com in droves, then maybe – just maybe – Finance can embrace the Cloud, too. 3. Still hooked on transactions, most Finance leaders see "driving growth" as a secondary priority Finance has traditionally focused on transactions, taking cost, speed, and quality as its measures of success. It is the foundation, in fact, on which shared services has been traditionally built. With today’s business leaders emphasizing business insights that drive growth and innovation, however, Finance has an important role to play. It’s a role, however, that requires assessing technologies in terms of their impact on business development, versus transactional expertise, and being confident enough to push out the boundaries. Most Finance leaders are not there yet. 4. Technology has been focused inside Finance – now it needs to reach outside Until now, the technologies that have been deployed within Finance have impacted what goes on within the function’s "four walls". As process scope expands to end-to-end, however, and the focus shifts to delivering "value" as opposed to "efficiency and control", Finance will need to start assessing technology that transforms what it does, not just makes its processes faster and cheaper. 5. It’s tough to compete against "Sales" for investment dollars The challenge is to get the business to recognize that technology investment for supporting functions is just as important as customer-facing functions. With most growth, to date, hinging on Sales & Marketing, however, Executive Boards are having a hard time persuading themselves that scarce investment resources should be channeled towards Finance – despite the fact that business insights and intelligence thus obtained would drive more profitable business strategies. 6. Finance leaders don’t understand what social media and "mobile" could do for their service Social and mobile technologies – which are proving so successful in front office functions – could turn the way finance communicates with the business and its employees on its head. And yet there is a definite lack of understanding as to "how". In their private lives, Finance leaders are embracing the flexibility granted through smart phones and apps. But when it comes to work, this same expectation and thinking is notable by its absence – to the detriment of the business. Lagging in social media also has other, not immediately obvious but very costly implications: the inability to attract top talent from the millennial generation, for whom communicating online is natural. 7. Take a tip from your colleagues in HR, who have shown more confidence when it comes to self-service technologies While F&A was the first to implement shared services models to drive more efficient process delivery, HR has led in the adoption of self-service technology, and with tremendous success. It’s true, Finance may be hampered by non-standard ERP platforms and diverse systems, but that alone is not the whole story. More could be done to leverage the benefits of pull instead of push technologies, across F&A as well. Why not pick up the phone and start asking some questions? 8. Don’t have the scope to manage technology yourself? Then leverage someone else’s resources Finance teams that have recognized technology as a core differentiator, but don’t have the means or resources to invest in it themselves, often choose to partner with a BPO provider, and thereby leverage the provider’s technology investments. The benefits of this strategy – apart from spreading out the cost of access to new technology – include the assurance that implementation is managed by experts, who can apply best practices and learnings from other customers. Although many providers may have become overly-reliant on the offshore FTE model, a few are differentiating themselves by leading with technology, particularly in social media, where they are now deploying technologies that monitor online chat forums to identify valuable trends for their clients. 9. Aversion to disruption Nothing is more stressful than a change in service delivery model – for example a shift to shared services. For many Finance leaders, the stability of business-as-usual may be preferred over the upheaval associated with implementing new technology – however lucrative. It’s a matter of sticking with the devil you know rather than stretching to test new technologies, given the transformation and other risks they may entail. 10. Technology providers are still targeting the CIO, not the CFO Old habits die hard, and so many technology providers are still pitching the CIO with their offerings, rather than the CFO. With the CFO gradually taking on more responsibility for technology decisions, however, providers will need to reassess their marketing strategies so that they are messaging Finance directly. [eventpdf] Source: Accountants for Business: is finance function technology delivering on its promise? ACCA Report January 2014 References: 1. Accountants for Business: is finance function technology delivering on its promise? ACCA Report January 2014 2. The CFO’s Six Technology Imperatives: Results of the 2013 technology issues for financial executives survey [Gartner] – the Financial Executives Research Foundation

Why is Finance Not Taking Advantage of Emerging Technologies?

Upcoming Events

Unlock Hidden Cash: Turn Spend Data into Working Capital Wins

From Excel to Control: How Finance Teams Build a Structured, Audit-Ready Close with AI-Ready Foundations

AP Automation Virtual Summit

Future of Finance & CFO Exchange

Shared Services & GBS Select Executive Leadership Summit

Shared Services & Outsourcing Week

Follow Us

Latest Webinars

The R2R Efficiency Mirage: Is Your Close Actually Automated?

Today’s AI for Tomorrow’s Finance: The Future of Accounts Payable

How to Scale Agentic AI Without Failing: From Pilot to Production

Recommended

SSON Podcast with the Producer of Rainman, Batman and Easy Rider

Podcast with Credit Suisse's Gary Carter: Rethinking offshoring's value proposit...

Winter is Coming…

Why is the Nordics region so "special"?

Nearshore plays well to Trinidad & Tobago's strengths

Successful SSO 'Micro-Learnings' from Monsanto and PepsiCo

Change leaves National Grid at a Pivot Point with regards to emerging services

Navigating the transition from low-cost labour to analytics and robotics service...

CEE Market Report: The Perfect Storm of Automation + Millennials = A New Deliver...

SSON Report: Understanding and Implementing Shared Services in Africa

Malaysia: Robotics and the New World View of Shared Services

Malaysia's Talent Challenge – Why it's Becoming Less Worrisome

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY

Why is Finance Not Taking Advantage of Emerging Technologies?

Upcoming Events

Follow Us

Subscribe to our Free Newsletter

Latest Webinars

Recommended

FIND CONTENT BY TYPE

SSON COMMUNITY

ADVERTISE WITH US

JOIN THE SSON COMMUNITY