With the finance function today mired in so much manual work, it should come as no surprise that CFOs are focused on making incremental improvements in efficiency. But new research indicates that CFOs today may be so busy perfecting their efficiency game that they’re missing opportunities to transform the way their function operates at a fundamental level.
Recent studies show that many CFOs are so caught up in the daily grind that they hardly have the bandwidth to innovate at all. And even when they move forward with new innovations, the technology they’re investing in often doesn’t address the biggest root causes that trigger manual effort in the first place—including the isolation and disconnection of data across finance and business systems.
Experts believe CFOs need to reorient their thinking toward finance transformation in much the same way that broader organizations are thinking about digital transformation.
“Finance departments must evolve to remain relevant and thrive,” says Adem Turgut, COO for SolveXia, which last week released its CFO Thought Leadership Survey 2019 based on interviews of 100 finance leaders from around the world.
The study showed that 49% of CFOs name disconnected data, spreadsheets, and manual processes as their greatest challenge to overcome in 2019. Approximately three in four CFOs reported that they’ve got data trapped in legacy systems.
This tracks with what experts at Deloitte say is happening within finance departments. They say that very few companies are doing the work needed to integrate finance and business data in order to get the most out of digital transformation across their entire businesses. Deloitte predicts that issues with disconnected data will linger at many organizations through 2025.
“Data problems hide beneath the surface for many CFOs, some of whom don’t fully appreciate the heavy lifting required to fulfill their requests,” Deloitte’s Finance 2025 report explained. “That’s partly because the problems involve technical issues, and partly because there’s little motivation for people to elevate the problems to the corner office.”
According to the more recent SolveXia survey, fewer than one in three CFOs say that increasing finance agility through digital transformation is a key objective for them. The report explained that many CFOs are so caught up with keeping up with business as usual tasks that they’re not able to get their heads above water to innovate or think strategically about problems.
Meanwhile another piece of research out from Gartner this month reports that those finance buyers that are investing in new technology are not doing so to solve tomorrow’s problems.
“The criteria on which financial applications are being selected today largely do not reflect the future needs of these departments,” said John Van Decker, vice president analyst at Gartner. “Buyers are putting an overemphasis on simply improving their system of record with their solution, while not accounting for differentiation and transformation opportunities.”
Van Decker contrasted the fact that while 79% of buyers of financial applications sought to improve efficiencies with technology, only 59% reported that they hoped to reap better business outcomes from their financial technology investments. More tellingly on the strategic front, only 9% of those buyers said they were purchasing new finance technology to help drive revenue growth.
