Finance heads who are bold enough to invest in technology and transform their working culture are reaping rewards, according to research by one of the world’s top professional services corporations.
In a survey of 1,000 CFOs and other senior finance leaders, EY found half were meeting short-term earnings targets by cutting funding for long-term priorities.
But it said 14% of respondents were pursuing a “bold transformation agenda” which included an overhaul of culture and technology – and those bold leaders were seeing the benefits.
The research, for the recent EY Global DNA of the CFO Survey, found CFOs and other senior finance leaders were facing “the challenge of meeting contradictory demands amidst market shifts, competition and cost pressures”.
Two thirds reported “tensions and disagreements within our leadership team on how to balance short-term and long-term priorities”.
Only 16% believed their finance function currently delivered best-in-class performance.
However, the 14% who were planning to pursue a bold transformation agenda over the next three years were more upbeat.
Those finance leaders were 1.4 times more likely to believe they already had an above-average or best-in-class finance function (73% vs 52%). They were also 1.7 times more likely to believe they would be best-in-class in future (47% vs 27%).
Although 55% strongly agreed that change in the finance culture was a major priority, 72% said “traditional back-office behaviours and mindsets” were slowing the modernisation of the finance function.
EY reported: “The research shows that CFOs driving bold and innovative change agendas in their finance function can unlock greater value today and are poised to unlock more in the future. They are prioritising the intersection of people and technology, focusing on cultural transformation, digitisation, advanced analytics and nurturing the next generation of CFOs.”
EY found the top 14% of bold finance leaders were more likely to see technological change as a key part of transforming the finance function. It was cited as a priority by 44% of those bold leaders, compared with 36% generally.
However, many finance heads generally cited “technology, innovation and transformation” as an area where spending was being cut or paused in order to meet short-term earnings targets.
This is despite the fact that investment in tech can often liberate finance staff from laborious tasks and allow them to focus on higher-value activities.
Dave Helmer, EY Global Tax and Finance Operate Leader, says in the report: “Finance functions are best positioned to drive value when they free up time and money spent on routine activities, allowing the function to invest more in data, technology and talent-improving outcomes.”
Finance leaders in any kind of organisation can benefit from investing in technology to take care of the routine work. Mark Preston, Head of Business and Finance at Blackpool Grand Theatre, was responsible for a digital transformation which involved switching the accounting system to iplicit and getting better visibility of financial information.
“There were other systems that might have been cheaper, but you were going to spend a lot of time downloading data into spreadsheets for analysis and trying to make that arrangement work – rather than having everything in one system that talks to other systems,” he says.
“With iplicit, I’m free to spend more time looking at forecasts and budgets – and when we present information, it’s current information, not from a month ago.
“There’s a marketing plan for each show and all the invoices get matched and entered against a budget for each individual show. When an invoice comes in, it’s matched with a production and saved – whereas in the past, we had people going into 500 spreadsheets and loading this information.
“It saves a lot of time which is freed up for all the things that are more important than matching invoices.
“Now, after each show, we can see virtually straight away how much profit it made, how much the bars have taken and so on. In the past, because the bars are run by a separate trading entity, we’d have to put the two companies together and download things into spreadsheets, whereas now it’s just there at the click of a button.”
Other organisations to have transformed their finance function include Edinburgh International Festival, which brings thousands of people to Scotland’s capital each summer.
It moved from a Sage 200 finance system to iplicit, saving two days of staff time each month from the automation features alone. Crucially, its team are better able to analyse how each event and each venue performs.
“We pull out some of that information and use it to try and inform some of the programming decisions for the next year,” says Andrew Brownlie, the festival’s Head of Finance.
“We can have a coherent conversation about it, using numbers that we are confident in. That will really help us in years going forward as we build up that history.”
At the charity Yorkshire Wildlife Trust, rapid growth drove the decision to move on from its Exchequer finance system to iplicit.
“We also wanted better and more timely information to help inform decisions,” says Darren Tiffney, Director of Finance and Central Services.
“In the past, my colleagues were often receiving information after quarter-end. That’s relatively normal for charities. Now we’re moving towards real time accounting.”
His vision is that the digital transformation will continue through “collaborative data”, analysing information from geographic information systems (GIS), customer relationship management (CRM) systems and other datasets.
“Our wealth of data on species ecology, carbon geographic information – it’s so rich. It would be wonderful if it could be used to help us inform how to deploy our resources in a particular part of the world,” he says.
To find out how iplicit can transform a finance department, take a quick tour of the software or get in touch for a demonstration.