By Dominick Fatibene, Finance Industry Principal, Senior Product Marketing Manager at Workiva – Winner of Best SaaS Product for Management Accounting and Budgeting in 2021 SaaS Awards
The unpredictability and rapid pace of change during the pandemic forced many organizations to accelerate innovation and tackle transformation head on. Transformation continues to be a hot topic across every industry as organizations look to keep the momentum going—and no one is feeling the heat more than finance and accounting teams. These teams are under pressure to make finance transformation happen and expected to consistently deliver strategic value, yet they’re often last in the pecking order for new technology to help in this effort.
In the landscape of more data, less resources, and increasing demands from stakeholders, the chaos of finance transformation can take a toll. Where do teams begin with finance transformation? How can they take a proactive approach to remain agile and resilient in a world where the only constant is change?
There’s a lot to consider and many misconceptions when it comes to finance transformation. Let’s examine common myths and debunk them once and for all so your team can propel forward on your finance transformation journey.
Finance transformation is only focused on ERPs
Unfortunately, enterprise resource planning (ERP) tools have given transformation a bad name. For many finance and accounting teams, finance transformation paints a picture of complexity: a complete—and overwhelming—ERP system overhaul.
That’s because these systems were never originally created for finance and accounting teams. When ERP systems were first introduced, they were mainly used by manufacturing businesses as a way to better track, manage, and control inventory. Once organizations saw the advantages of these systems, they were quick to implement ERPs for financial processes owned by accounting and finance. To better suit the needs of financial teams, many ERPs required customization and patch work, which eventually led to siloed and disconnected systems.
With the massive time commitment needed to migrate current customizations or start from scratch, it’s no wonder teams put this off. The good news? Finance transformation encompasses so much more than ERP modernization—and there’s no size that fits all approach either. Plus, there are now cloud technologies purpose-built for enterprises that can aid in finance transformation efforts.
While ERP system modernization might be an essential aspect of transformation, it shouldn’t be the only consideration. Once you start digging in and discovering ways to simplify your work, you’ll start to see that small, quick wins can have a dramatic impact.
Take, for example, something as simple—yet fundamental—as reporting. Reporting is one of the most visible and important parts of your business, but it’s often overlooked in finance transformation. Boards, executives, and other key stakeholders rely on accurate reporting to get the answers and insights they need to make critical business decisions. And with modern cloud-based platforms that can simplify reporting across all business units, the lift is light in comparison to implementing or upgrading an ERP system.
Reporting is just one instance of transformation organizations can pursue without a time-intensive ERP project. Other common areas that organizations can transform outside of the ERP include account reconciliations, forecasting, task management, analytics, data preparation, and more.
In short: Your finance transformation strategy doesn’t need to solely focus on ERPs. In fact, smaller initiatives can have the biggest impact on your organization’s bottom line.
It will take months—even years—to see progress with a finance transformation strategy
Even outside of the ERP modernization discussion, finance transformation still gets a bad reputation for being complicated. Too much time, too many resources, and too much ambiguity. You don’t need to boil the ocean to make a big, and immediate, impact. As mentioned previously, finance and accounting teams can start small to make major improvements that support business needs.
In fact, one way to begin making an impact and continuously improve is through agile finance transformation. According to IMA® (Institute of Management Accountants), an agile approach provides tremendous benefits, allowing teams to quickly and responsibly respond to change, provide timely and transparent insights, and maximize value delivery: “The future of the finance function will be shaped by the success of the transformation underway. Embedding agility within the function’s organizational culture is integral to that success.”
In addition, success stems from the recognition and acceptance that finance transformation is ongoing. While there’s no right or wrong place to start, one approach is to first address common pain points across your teams. While challenges will vary from organization to organization, they tend to circle back to three key themes: siloed data, disparate systems, and manual processes. In their report on agile finance transformation, IMA notes that removing these obstacles is critical: “To deliver the timely insights the business needs, finance teams must rid themselves of manual, time-consuming, siloed work and incorporate new, streamlined approaches to collaboratively delivering value.” Breaking down these barriers will open the door for more high-value, strategic work.
Outside of ERP transformation and reporting simplification, other areas to consider for finance transformation include:
- Close management
- Account reconciliation
- Spreadsheet elimination
- Budget and forecasting
- Dashboards and data analytics
- Shared services/CoE
- Robotic process automation (RPA)
To hit the ground running, many teams turn to cloud-based technology to automate repetitive processes and tasks, connect data, and streamline collaboration. As you evaluate technology to jumpstart your efforts, look for a solution that connects to multiple systems of record. This ensures you can access everything you need in one place for full transparency and control.
As you set the stage for a holistic strategy, think where technology might fit in along the way and don’t be afraid to dream big (unlike that recurring real-life nightmare of copying and pasting or reformatting data). Cloud-based platforms empower teams to do more with less. And while finance transformation has a long-term outlook, the short-term opportunities for success are endless.
Finance transformation is too expensive
It’s always going to come down to cost—you are in finance after all! You might be asking yourself: How much is finance transformation really going to cost us? Where do we invest first? How can we budget for such a large initiative that will likely span several years (or more)? Justifying the cost when you’re already looking to cut in other areas of the business makes it all too easy to label it as too expensive.
While cost is always a concern, finance transformation is not as costly as it sounds. In fact, cloud-based technology is more affordable than ever—and can deliver a quick return on investment.
Investing in technology that enables teams to not only automate manual tasks but also to transform entire processes also supports the larger vision: transformation that helps the business scale to address future needs. And according to Gartner’s “Hallmarks of Winning Finance Transformations” guide, this forward-thinking type of transformation is at the core of a winning strategy. With an immediate improvement in efficiency, finance and accounting teams can spend their time on what matters most—not repetitive, menial tasks.
However, an investment in the right cloud-based technology can quickly pay off by shifting highly skilled and highly paid employees’ focus back on strategic projects. In fact, at Workiva, we’ve seen one finance and accounting team reduce their report creation time by 92% and eliminate three days in the financial close.
At the end of the day, finance transformation is going to cost something—time, resources, or technology—but the long-term benefits outweigh the upfront costs. What teams can’t afford to do is to put off finance transformation any longer and risk innovating and losing business opportunities.
Finance transformation initiatives require too many IT resources
It’s clear that transformation and technology go hand in hand. But with the implementation of technology comes great responsibility—IT responsibility, right? Not as much as you might think! While there is IT involvement with any new technology purchase or implementation plan, you don’t need a ton of IT’s time to get started. And that means weeks (maybe only days) to get going—not to mention, a lot less time spent managing IT tickets.
Modern cloud-based platforms are intuitive and come with an array of resources to help teams onboard and learn quickly without additional IT training or setup required. What’s more, cloud-based technologies enable seamless global collaboration—providing an accessible way for teams to work together in real time, no matter where they’re located.
So while IT will likely play a role during your implementation process, you won’t need to rely on them to start achieving your finance transformation goals.
Finance transformation in action: The ROI of simplified reporting
Putting the spotlight back on high-value work is a common theme for many organizations’ finance transformation strategies. Let’s take a look at how one organization is doing just that with a focus on simplified reporting. Jordan Brackett, Vice President and Controller at Solenis, set out to improve efficiency and empower his teams after merging with BASF.
Solenis, which produces specialty chemicals for water-intensive industrial operations, already used Workiva—a leading cloud platform for transparent reporting—for their financial reporting as a private company when it merged with BASF. After the merger, Solenis gained more warehouses, more plants, and more employees around the world, adding complexity to the finance function’s work.
Mr. Brackett looked to expand their use case by adding global statutory reporting to the mix. With the benefits of connected data, improved visibility, and automated audit trails, the team projected a 43% ROI over three years for its 30 reporting entities in Europe, the Middle East, Africa, and Russia.
In addition, he looked at streamlining how his team created its monthly 100+ page operating report packed full of consolidated financials by region and business, staffing information, margins, pricing, inflation, and much more.
This, along with other projects dedicated to internal controls, drove Solenis to expand their use of Workiva enterprise-wide—to connect all kinds of reporting to internal controls with a single platform. The results tell a convincing story—simplifying reporting processes in finance made all the difference for Solenis:
- Reduced the internal audit report from dozens of pages to a 10-page presentation
- Maintained productivity, even after losing resources to cost-cutting measures
- Projected annual benefit of more than $400,000 tied to improved productivity
While not always thought of in conjunction with finance transformation, connecting data, simplifying reporting, and streamlining processes can make a big splash, especially downstream.
So as your organization ventures out on a finance transformation journey, just remember—it’s not a single system, single step, or a single project. It’s an ongoing process meant to change as business needs evolve. Flexibility to respond to new disruptions and keep up in an ever-changing environment will be key. Committing to finance transformation with a cloud-first, technology-enabled approach ensures your teams will be ready to bring their best to the stakeholder table.