If you have read the recent research on finance of the future, there is a consensus on what 2025 will look like. Technology will run most aspects of the finance function as data for decision making takes centre stage.
The current state of the finance function
A majority of businesses are working on transforming their finance function – and rightfully so. If recent events have showed us anything it is that managing our profit and loss has never been more critical. Anyone in a decision-making role now has the requirement for data that is accurate, reliable, and quick to access.
However, the reality today is a little different to the potential future of finance in 2025. Many organisations are still operating in a low state of data maturity. Meaning, they are not benefiting from access to real time data and predictive analytics. FP&A teams are struggling with extracting data from legacy systems and transforming it into something meaningful. Excel models are still the ‘go-to’ and serve as many organisations ‘source of truth’ when it comes to final reporting. In saying this, most organisations have no shortage of technology available to them, although it is not fit for purpose. While there are good intentions from IT and Data teams, many are still not achieving the results they want. Research has shown around 70% of transformation efforts fail to realise the benefits originally intended.
Finance of the future needs to adopt digital transformation
For those that can see the major opportunity in all this, the right approach can deliver profound benefits. By adopting a wider digital strategy and agile execution, you can accelerate digitisation in your environment. An agile approach can allow you to adopt items on the 2025 wish list today. Organisations that embrace the future of finance and test new technologies will outstrip their peers in performance.
So, if this is the case, what does the future of finance function need?
From our experience, the finance team of the future needs access to accurate, ‘on-demand’ data, without complex back-end builds. Similarly, there needs to be a smoother approval process, with the removal of bureaucracy.
Digital infrastructure should be the bedrock of your data driven operations and high levels of automation need to be adopted. The finance function teams of the future need a skill set that includes the ability to analyse, and model data in order to maximise interpretation and support decision making.
What is holding companies back from the future of finance?
The most common roadblocks to achieving a functional future finance team is overcomplication and legacy thinking. A mixture of both can almost guarantee your finance function will not evolve.
As a consulting organisation we focus on simplifying Data Architecture and delivery roadmaps. Overdesigned Data Architectures may ‘look good’ on paper but internal data teams and end users need to understand how they work.
There is also a big difference in attitudes between ‘forward thinking leaders’ versus ‘legacy thinkers’. Forward thinking leaders tend to be early technology adopters, and are willing to trial lesser known brands with better technology. In contrast, legacy thinkers choose comfort and will tend to prioritise ‘well known’ technology solutions over fit for purpose. In our experience, choosing the best technology for the project goals, regardless of brand recognition, always results in better ROI.
We recently saw this first hand with a client. The company’s internal BI team had just wasted 4 weeks making data from their legacy warehouse usable for Power BI. We then took to work on a similar project for them with a different use case and completed it in less that one week! How did we achieve the same goal 3x faster? by using better technology. In this case we employed Snowflake’s cloud data warehouse. We showed that the ‘legacy’ approach was outdated and by using the right technology we were able to complete the use case with more speed and accuracy.
Why wait for 2025?
The good news is, you don’t have to wait until 2025 to take advantage of technology and accelerate the future of finance. A mid-to-large size organisation can complete a digital transformation in 12-24 months, depending on complexity.
However, it is important that business teams continuously tweak, improve and adjust to their ever changing environment and new requirements. It is critical to have the data infrastructure accessible to users when they need it.
I recently spoke with an executive regarding his modern technology ecosystem which is the backbone of their data strategy. On the topic, he said, “it really can be so easy”. For the organisations willing to change, leading edge technology will simplify the process.
As we move into 2022, now is the time to step on the accelerator and make next year your most innovative. If you want to experience the benefits of the future of finance today, why not contact Minerva Partners.