Calls for digitalisation has been going on for some time now, across all industries, from government agencies through to the latest vaccination certifications as a result of the COVID-19 pandemic. There is an erroneous belief though that everyone is prepared to embrace all that digitalization has to offer.
Regrettably, one of the last miles of resistance may be the finance function. While other areas of the business are focused on new technologies to drive better insights that support their business – is the same true for the more conservative finance function?
IDC research suggests that only about half of the “best-run” midsize organizations have a finance function that appropriately understands how significant data quality and data, in general, is, in order to be timely, accurate and useful. Constellation research from 2018 suggests that “DX” projects are often led by the CIO in 60% of small and midsize companies, not by Finance despite Finance often being the final decision-maker.
Finance leaders in business appear to know that cool technologies like AI and ML can help in breaking traditional organizational data silos, that they can support information sharing and improve overall operational efficiency as well as reduce errors in handoffs and accelerate decision management all to the benefit of the customer but do their teams know?
The finance operations disposition seems to be one of “Why change what isn’t broken?” This perspective drives to the heart of the fundamental problem of data ownership and responsibility. The finance function is typically viewed as an operational overhead and not a strategic or competitive advantage or fuel for organization growth. While the business as a whole, favour the benefits associated with fast and easy access to real-time data to respond to a changing business landscape, those clinging to their monstrously complex, macro and formula laden spreadmarts.
For many, shared spreadsheets still remain the most ubiquitous method of fast and easy data distribution between departments despite all the inherent risks with using them as sources of record.
There is a valid argument on both sides of the fence. The short-term view is that the environment is so volatile and ever-changing, that heavy reliance on protracted big-bang projects will end with a half baked solution that will simply add more friction to analysis, insights and reporting. Big transformation projects are risky often with a poorly understood return on investment. Another argument is that finding the right technology to meet SMB needs is hard.
The flipside of the argument is that the ever-growing pile of electronic spreadsheets makes data management impossible. They’re disconnected from the original sources, get out of data and are easily manipulated in such a way that they can present entirely the wrong picture. In addition to the logistical nightmare, there is the potentially unnecessary reliance on IT support for critical business insights, slow and inefficient processes, and poor decision-making outcomes.
Adoption of technological advances, especially in the SMB and particularly by their finance teams must be the way to deliver timely actions, improve decision-making accuracy, and provide fully informed insights. It only takes a few innovations to deliver benefits that will speak for themselves.
Those innovations, once operationalised will help the finance function get ahead of the audit and compliance anxieties that often plague finance. A recent Forbes piece, suggests that having a DX strategy places your business in a much stronger position and show more resilience than those without one.
Deliver these without detracting from overall business efficiency, data quality and keep up with organizational and business growth and the resistance to adopt and embrace a new way of working will dissipate.
Publish Date: August 15, 2021 10:23 PM