First Things First: Top Investment Priorities for Finance Transformation

Take a moment to think about all the manual processes you do every day. If there are more than just a few, you’re in good company. We all know it is time to kick disconnected spreadsheets and unnecessary data entry to the curb, but investing in CPM software can be a hard sell. Getting sign-off for tech investments from the C-suite can be tricky. FP&A is sometimes viewed as nothing more than a cost center that provides reporting and analysis. While the “P” of planning is all but overlooked. But we know FP&A can be a driving force for the business, given the right tools. Regardless of these roadblocks, digital transformation (and smart tech investments) is key to keeping up with increasingly complex and shifting markets, changes in customer behavior, unpredictable supply chains, and more. Although there are many ways to start the transformation to digital processes, it can be difficult to determine how to make the most out of your tech budget and get what you need. To help guide teams looking to invest in CPM, we asked expert analysts and consultants: “What type of technologies should take top priority within the Finance department budget?” The following experts gave their advice on tech and the future of FP&A:

• Gary Boomer, Shareholder, Visionary & Strategist, Boomer Consulting, Inc. Gary is a highly influential consultant and strategic planning expert. From client development to compensation, he identifies practices and policies that foster progress across the accounting industry.
• Richard B. Pototsky, President, Miami-CFO Richard is a seasoned pro at FP&A who has been helping clients achieve greater growth and profitability for over 25 years.
• Janet Schijns, CEO, JS Group Janet is a former C-Suite Fortune 500 executive with decades of experience in the high-tech industry, ranging from Verizon to Motorola to Office Depot.

Culture shift: FP&A as a Strategic Investment

With the right tools, Finance departments can help steer business decisions, improve profitability, and provide timely guidance about unexpected events. Scenario planning, in particular, is a valuable asset that FP&A can provide if the data and tech are available. But changing to a more forward-looking paradigm can be challenging. As Boomer observes: “The trap most businesses, including CPA firms, fall into with regard to technology spend is the majority of their budget is going to "keeping the lights on:" maintaining the existing infrastructure rather than innovation to improve productivity and the customer experience. ... Innovation and digital transformation cause disruption and those being disrupted often don't like the change and resist. Therefore, upskilling and external process reviews are often beneficial.” These reviews help the Finance department identify roadblocks and pain points and determine what their tech investment priorities should be. Boomer continues: “The important question becomes; how can we add more value and improve the customer experience? Legacy in-house applications often cause businesses to operate in a more expensive hybrid model.” Boomer highlights one of the key points that Finance leaders can use in building a business case for tech investment: The status quo is likely less efficient and more costly over time than new technology would be.

Tech Investment Priorities

Once the decision is made to invest in new technology, what functionality should your team be looking for? Richard B. Pototsky offers a few suggestions about where to start: “Organizations still growing their understanding of FinTech should focus on investing in software systems that will help them:

• better respond and anticipate changes
• improve business continuity
• automate repetitive financial processes
• streamline budgeting, forecasting, and financial reporting
• improve data quality.”

Pototsky suggests that CPM software is a foundational technology: “Advances in Corporate Performance Management (CPM) systems allow organizations to test the waters and make small changes in key areas rather than do a complete overhaul all at once,” he says, adding that, “Rapid and relatively low-cost experimentation is possible with the right technology.”

Three CPM Must-Haves

Our experts identified several core functions every CPM solution should have, and the top three are:

1. Automate processes
2. Improve data quality
3. Streamline department functions.

1.  Automate Processes

The experts all agree that one of the most important functions CPM software performs is automating processes. All Finance departments have at least a few, and often many, processes that are done manually that could be automated with the right tools. Furthermore, processes can be tied together using tech so that changes can be made universally. Janet Schijns says, “…I would automate core functions like FP&A to free up my team to work more on advanced Finance planning and analysis.” The right tech can be used to reduce errors from manual data entry and save time on reporting that can take days or hours to populate. One of the most valuable aspects of automated processes is that changes can be made quickly and results can be shared widely. Agile FP&A teams that aren’t bogged down with mundane tasks are better equipped to respond to questions and get in front of potential problems.

2. Improve Data Quality

No matter what you are doing, your outcomes are only as good as your data. Investment in CPM software must include accurate and timely data collection and validation. Data should also be housed in such a way that it is widely accessible and compatible with all FP&A tech. Schijns considers data quality to be the priority: “I would start with data and analytics investments, ensuring I was capturing the right data and was able to analyze the data to create learnings.” Pototsky highlights the importance of real-time data: “Real-time financial data is critical for managing the health of a business and creating growth opportunities. These upgrades and investments will help companies to do precisely that.” The right tech can centralize, validate, and maintain high-quality data that can be easily fed into automated processes.

3. Streamline Processes

Once your team has freed up time with automation and improved data collection and quality, the next priority is to streamline processes. Centralized data that feeds into your CPM software can streamline processes for budgeting, forecast, reporting, and more. Boomer points out, “We are now in the third generation of the cloud allowing for improved integration and most importantly the ability to work from anywhere at any time.” Pototsky adds, “Technology has provided us with innovative tools that streamline processes and provide detailed, real-time financial insights.” Streamlined processes save time and money and support more valuable reporting and analysis.

The Bottom Line

No matter how you look at it, investing in better tech is good for the FP&A team and good for the business at large. It empowers the FP&A team to concentrate on higher-level projects and reduces the amount of time spent on routine, repetitive tasks. Moving to a more robust data system allows for data-driven decision-making that can guide the business. Our experts all agree that the time has come for FP&A to get on board with digital transformation. To learn more about smart tech investments for FP&A, read the Scenario Planning for Finance guide.