Finance leaders would like staff to spend only 3% of their day creating and updating reports. In reality, they spend almost half of their time completing reporting tasks. The role of the CFO and finance department is changing. Now, more than ever, staff must focus on reducing the time they spend on manual data processing. By doing so, finance can focus on communicating analysis and insights to the business.
Digital transformation, through automation, promises to unshackle finance from their manual data tasks. To succeed with automation, finance teams must be willing to overcome:
In this post, we will discuss how finance can overcome each of the challenges above.
Research suggests that companies lose $140 billion dollars each year to disconnected data. Around 76% of organisations say that their data is often trapped in legacy systems. This has a direct impact on finance staff who need to combine data for reporting.
Based on FTE benchmarks, a company with $1b+ in revenue employs 35 people to create and update reports. In Australia, that equates to around $5 - 7m dollars a year!
As a result, finance spends only a small fraction of their time communicating insights to the business. With CEOs now demanding more analysis and insights from their CFO, things need to change.
To unshackle themselves from the burden of creating reports, finance must automate. By doing so, CFOs will be able to find resources to focus on communicating insights to the business.
For example, say a large company ($1b+ revenue) automates half of their reporting. That equates to adding 17 FTEs of resource to finance. This new found capacity can then be set to the task of analysis and insights generation.
Automation should be front of mind for all finance leaders. Surprisingly though, only 13% of CFOs have started using automation technologies. While there are significant gains to be had for the finance teams that do automate, there are first some key challenges that must be overcome.
The traditional role of the CFO and finance was one of financial stewardship. But things are different now. 85% of CEOs believe their finance teams ability to analyse data is the surest way to growth. The top performing companies spend 20% more time on analysis (vs gathering data).
A culture based on traditionalist thinking will be the Achillies heel of your automation agenda. Finance staff need to:
This can come as a bit of a culture shock to finance teams that have been playing a more traditional role. Change management will help with this.
As already mentioned, automation will reshape the culture of your finance organisation. The old finance team:
The new finance team:
Ignoring the discomfort that this type of change will bring is not advisable. You may find that staff are "too buys to automate" or are likely to use any hurdles in the automation journey as a reason to retreat back to manual reporting.
Finance leaders must educate their staff on how automation will improve their work. They need to find and support champions who will promote automation. They must prepare a response plan for when the automation produces an error. Finally, they need to capture and share success stories to help build trust and credibility.
Companies also need to invest in the digital skills necessary to automate.
According to Deloitte, many companies lack the skills to automate. Most finance teams have well-developed skills in areas such as:
Finance teams must now equip themselves with new skills for automation. These include:
You can learn more about these skills and download a free digital skills matrix here.
It is important to note that people with these skills most likely exist in your company. We often encounter staff within finance teams who have the five skills listed above.
It is clear that finance is spending far too much time preparing reports. To meet their CEOs expectations, CFOs need to embrace automation.
Finance teams that do automate can unlock significant benefits. In particular, they will create resource capacity to focus on analysis and communication. To achieve this, finance leaders must:
If you would like to learn more about the challenges and solutions for CFOs wanting to automate, download our free whitepaper.