Mark Jenkins, Chief Finance Officer At MHR International, explores how digital transformation has fuelled the need for finance teams to move away from outdated software and embrace a more suitable way of processing data.
A recent MHR survey revealed that over half (51%) of finance leaders depend solely on Excel for their processes – a figure more reflective of the industry’s lack of tech investment than of the usefulness of a software tool now over 30 years old.
Accordingly, many finance leaders are missing out on opportunities to reshape their role due to being weighed down by time-consuming and tedious manual tasks. This is also using up valuable time which could be better spent feeding into bigger-picture business strategy conversations. Should they continue to be left out in the cold, businesses risk missing out on a wealth of expertise, knowledge, and crucial financial data.
If finance professionals want to take their rightful place at the strategic table, they must become drivers of tech implementation.
Stuck with spreadsheets
Excel is still deeply entrenched in the culture of many finance departments. Often seen as a tried-and-tested, ‘safe’ tool, spreadsheets owe their ubiquity to organisations’ traditional reluctance to spend out on innovative software and processes. After all, it is daunting to ditch the only business analytics tool you have ever known in favour of something new, especially when to date your organisation has been completely reliant on it.
But while Excel is great for rudimentary calculations, its shortcomings in today’s interconnected global finance ecosystem are more obvious than ever. In a world that is increasingly driven by collaboration and information sharing, Excel is simply incapable of providing the multi-user support and complex, real-time data analytics needed for successful financial modelling and forecasting.
Furthermore, Excel cannot always be relied on to keep data safe and secure. Recent headlines have made this painfully apparent: in 2020, almost 16,000 positive Covid cases vanished from Public Health England’s contact tracing system in a high-profile IT glitch. The reason? Excel had run out of numbers. With almost a third (31%) of finance leaders rating unsaved spreadsheets and lost documents as the greatest risks of their role, such costly and embarrassing errors should spur businesses to prioritise data integrity and move away from outdated spreadsheet tools.
Leaders or laggards?
Reliance on legacy processes is also hindering the strategic growth of finance leaders and their teams. MHR’s survey found that almost half (44%) of leaders are left out of business strategy conversations, as they find themselves overburdened with cumbersome manual processes. Wasting time copying and pasting data from one spreadsheet to another, talented finance professionals are currently robbed of the chance to participate in long-term scenario planning, leaving them vulnerable to future market changes and missed growth opportunities.
As a result, technical debt and legacy mindsets are holding finance teams back from flexing in their role and using their expertise to shape important strategic initiatives. This seems thoroughly at odds with the digital transformation happening across all industries. If finance leaders want to be the drivers of the data analytics revolution, they must leave Excel in the past and embrace smarter tools.
From stagnation to automation
Accelerated digitisation has fuelled the need for finance teams to ditch outdated Excel software and adopt more suitable ways of processing data. By implementing agile and collaborative scenario-planning solutions, finance departments can seamlessly plan and model for the future, enabling them to use their insights to shape long-term business-wide strategy.
Automation is the key to future-proofing finance teams. It removes the need for professionals to reach down and perform tedious, time-consuming manual tasks, thereby freeing them to undertake more high-value endeavours and provide forward-thinking strategic advice at board level. Furthermore, automated processes support teams in boosting their compliance, accuracy, and data security, considerably lightening the load.
The right integrated corporate performance management solution goes beyond basic financial planning: new market entrants can incorporate extended planning and analysis (xP&A) to put finance leaders back in the driving seat to make more efficient strategic decisions. This enables teams to make considerable time and cost savings, setting themselves and the wider business up for a more productive and profitable future.
In today’s increasingly challenging and competitive commercial environment, financial data cannot sit siloed with individuals, nor be held in obsolete IT systems. The right tools and solutions will ensure greater data visibility across the wider business to help support long-term decision making. In addition, tech implementation can free finance leaders and their teams from low-value, repetitive manual tasks, securing much higher levels of efficiency, responsiveness, and agility.