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Shape Up With This Five-Step Plan For Finance Department Fitness

a set of colorful kettlebells

Feeling a bit pudgy these days? You’re not alone. In one recent survey by WebMD, 54% of respondents reported having gained weight due to coronavirus lockdowns. It makes sense: people were not going to the gym, many were subsisting on takeout (OK, basically all of us), and we weren’t getting in the daily steps one gets when strolling around the office every hour on the hour to socializ– er, collaborate with colleagues.

As the world opens up again and we reacquaint ourselves with the gym, perhaps it’s time to consider if your finance department is in need of a fitness plan of its own. And no, not the kind of plan that has you up and lifting weights at 5 a.m., we’re talking about a digital transformation strategy.

The digital finance revolution has been underway in finance departments around the world for some time now. But like many of us turning to fitness and diet to shed the Quarantine 19 (that’s the cute term for the pandemic’s version of the Freshman 15), progress is slow. The reasons are numerous and varied, but here are just a few: legacy systems and an unhealthy attachment to them due to fear of change, manual processes, an overreliance on Excel (blasphemy, I know), too much data and not enough time to make sense of it, and changes to regulatory reporting and compliance requirements in virtually every industry.

Finance departments in organizations of all sizes have been outpaced by every other department in the organization when it comes to automation and digital transformation. Sales and marketing are a decade ahead — they’re doing CrossFit four days a week while finance is out of breath just from going to the mailbox to fetch the mail. Marketing, for example, is mixing AI with social media to reach the right audience with precision, and customer service has been using chatbots to offer their customers self-service options and lighten the load for their human agents.

While technology has greatly influenced the world and how business is conducted, finance teams still find themselves surrounded by piles of paper, manual processes, and quarterly binders with nicknames as though they are a part of the finance family. Just check out this 2020 survey from the Association of Accountants and Financial Professionals (IMA) and Deloitte. In it, 75% of respondents said their company’s accounting processes are either largely manual or still a considerable manual effort.

To some degree the reluctance to modernize finance is understandable. There is limited risk to a marketing team failing with new innovative technology; it’s not like a regulatory agency is going to come down on them because an Insta post didn’t get many likes. The risk is much higher where financial reporting is concerned, especially for public companies. However, this is a risk that at some point has to be taken. In order for organizations to remain competitive, they have to innovate and automate. For many organizations, the pandemic was the needed push.

In a podcast late last year, Allen Narkiewicz, national leader of financial services, Finance Transformation Practice at KPMG, explained how the pandemic exposed just how manual finance processes were.

“When COVID hit, it really highlighted how many manual workarounds there were within the finance and accounting processes at the banks,” he said. “Trying to go and solve these regulatory issues and questions that arose, linking them to your financials, reconciling all this data that might have been dispersed, not in one place, not linked through your systems, all of a sudden it was highlighting people not having job satisfaction. One of my clients — when we asked them what they wanted to stop doing — it was all of this work that could be digitized, you could automate these flows, you could have the lineage of data and have it linked.”

He continues with a story of a client whose finance department is using 50-year-old technology. And no, the client is not some mom-and-pop corner store with a paper ledger that the owner’s wife handles. It is an actual large client. “Right now, you know, one of the banks that I interact with, their ledger is actually about 50 years old. The ledger before their current ledger was pen and paper. It was literally a paper ledger. And so that’s what we’re dealing with. This is a bank that has, of course, had to have manual processes built around how that ledger has been installed, built, designed because we’re dealing with technology that’s 50 years old.”

Fifty. Years. Old. Reminder: Even Excel isn’t that old, it’s not even 40.

Alright so we’ve established that finance departments are the chubby kid in high school gym walking the entire mile on the day class has to run the track. Thankfully there are solutions for finance to get digitally fit. As you think about how to transform your finance department from flab to fit, keep these five things in mind:

Embrace composable architecture

According to Gartner, by 2023, organizations that have adopted a composable approach will outpace competition by 80% in the speed of new feature implementation. “Composable business is a natural acceleration of the digital business that you live every day. It allows us to deliver the resilience and agility that these interesting times demand,” said Daryl Plummer, distinguished VP analyst, during the opening keynote at virtual Gartner Symposium IT/Xpo®. “We’re talking about the intentional use of ‘composability’ in a business context — architecting your business for real-time adaptability and resilience in the face of uncertainty.”

A composable architecture offers agile, best of breed, automated finance management capabilities and processes enabling progressive modernization, finance innovation, and accelerated speed to value. And it can be adapted along the way (unlike 50-year-old ledgers around which clunky processes have to be built). Solutions must be vendor agnostic and integrate easily with source, target and complementary systems; your department needs to be able to “work out” even when you change gyms.

The finance user needs a custom “workout plan,” not a solution with someone else in mind

Finance solutions should be designed with the finance user in mind and should opt for solutions that include built-in finance IP to accelerate implementations and leverage finance best practices. Finance users should be empowered to configure rules in a non-code environment. Think being able to do perfect squats at home at your convenience instead of only exercising when there’s a trainer there to walk you through every step.

It’s cloud or nothing

Finance has been the slowest department to accept and adopt cloud solutions. Historically, they have been hesitant due to security concerns, with the loss of control and ability to customize the solution (SaaS solutions typically require more standardization), but that time has passed and finance needs to get on board with cloud solutions that offer much higher levels of scalability, automation, performance, and control.

As the pandemic taught us, organization-wide access is critical not only in finance but especially in finance. Now that we have experienced for ourselves trying to organize and access data 100% virtually, it’s time to take those lessons and make sure we never have to be without critical info again. The cloud offers a current, fully available solution that, despite its “newness” in the tech space, has proven itself to be invaluable.

Technology moves fast, and the finance architecture needs to be future-ready

The world is getting less predictable and finance teams need to respond to both business risks and opportunities. Any implemented solutions need to stand the test of time. They need to provide the building blocks, performance, and scalability to react with agility to market factors. Solutions need to natively embrace emerging technologies (AI, MI, blockchain, etc.).

As we learned in March 2020, there will be things completely outside of our control that can have sweeping effects on all aspects of life and business. The best CFO in the world can only control internal factors, and the tools to help these CFOs do their best work need to be responsive to real-time market data and events to allow finance departments necessary agility in changing conditions.

Data is your most valuable commodity and you need access to it at all times

In today’s internet-focused, always-connected world, data is widely considered to be among the world’s most valuable resources because of how much potential revenue and business value it can provide. Data affects all our lives in ways most of us can’t even imagine, and this data can be leveraged in spectacular ways by organizations.

Today’s CFO must have the ability to not only access real-time data but have full traceability of where that data came from and the ability to visualize it to surface trends and insights for the business. Using a data fabric approach to access multiple data sources reduces the duplication of data, storage costs, and complexity.

The finance transformation may not be an easy journey, but neither is getting fit. As with physical health, there are tools available to help finance departments make that difficult journey a little bit easier. And like all good fitness plans, the rewards reaped from investing in health are far-reaching and so worthwhile.

Transforming your finance department into an efficient, automated, high-performance powerhouse can seem daunting. Luckily Aptitude Software has been focused on the office of the CFO for decades and brings deep finance, accounting, and technology expertise. Aptitude has solutions to help you comply with challenging regulations, drive holistic revenue automation, and lead a successful finance transformation.

Curious to hear more about organizations that have improved their digital finance fitness? Listen to an on-demand webinar, Mistakes to avoid for a successful digital finance transformation and hear finance leaders share first-hand experiences from their transformation journeys. Or, peruse our Resource Library for other assets that can help you achieve your finance goals and ambitions.