“It’s not your fault, it’s mine. You’ve changed, I’ve changed, we’re both different.”
Breaking up is difficult. Whether you choose to suddenly and completely break it off, or gradually disappear, you’ll still have to walk away.
It’s not my day job to offer relationship advice, but I do end up discussing about handling breakups when you no longer love the financial sector. Since the turn of beginning of the new millennium, global finance enterprises have moved towards becoming strategic business partners. Many are quicker at closing the books, while others are considering how they can use tech to improve transaction processing, control processes, and compliance. However, most are away from where they must be or desire to be. What’s the main problem? It’s technology.
Most financial management systems are up to 30 years old now. Whether tech innovations are seen as risks or opportunities, finance leaders aren’t happy with how the old systems are performing.
A survey of senior finance executives performed by CFO Research shows that 41 percent of respondents believe their management teams can’t access the information they need when they need it. Almost two thirds of the data systems are complex and duplicative, and the financial data used in the decision-making process isn’t as helpful as it should be.
Considering that legacy finance systems reached an increased level of flexibility by providing a wide range to personalize systems, it’s not surprising. The price for the flexibility was infrastructure, which was resource and management-intensive, costly, and complex to operate. The systems were developed on relational database structures, which operated batch report processes that took a long time to complete. This made transaction processing, which is a main financial responsibility, unwieldly and slow.
The traditional finance systems were developed for accounting and not for financial management. So, as the finance departments have modified and evolved, they must add extra tools to their systems, increasing their complexity and offering extra opportunities for error and lower control over the information used to make business decisions.
Innovative technologies, including in-memory computing and cloud-computing, are becoming common and they offer finance the possibility to provide insights and data more efficiently and faster. They consolidate financial statements in real time without additional business intelligence tools or data warehouses. They also increase the flexibility and agility of finance, when businesses require changing processes and remaking services, products, and operations on the spot.
In the end, the finance intersection is risk averse. Traditional ERP systems performed an acceptable job in meeting the requirements of finance teams and a reduced number of business stakeholders. Only the game changed while we were in it. Finance must look at its Human Resources partners if it wants to check how tech can change the game.
To manage their workforce faster, smarter, and efficiently, HR leaders are using cloud systems. They’re using real-time big data to unlock and resolve challenges and opportunities, which were difficult to find and understand. HR freed itself from the expense and complexities of maintaining and upgrading traditional on-premise systems and can focus on finding new methods to push the business forward. This disproportion creates a gap in Finance’s capability and performance.
Increased and quicker access to data helps business and finance to closely and effectively collaborate. Less time is spent collecting data. Finance can focus on providing the business with the right support. It’s an essential capability for global business services enterprises and other companies which rely on their employees as revenue producers. Because all the users are working with the same information all the time, the businesses can rest assured that everyone is dealing with only one version of the truth.
Finance must step up its game. Cloud based management systems allow finance to work smarter and faster while becoming a strategic partner. Considering that, breaking up is quite easy.