Who's embracing the latest finance technology?

While some dynamic businesses are reaping the benefits from the introduction of enterprise management software applications, robotics, and advanced business intelligence tools, for others there is a significant risk of being left behind and even making costly strategic errors.

Our recent survey* of senior executives shows that only around half of organisations have a clear strategy and business case for enhanced digital transformation within the finance function. Is your organisation ready to make better business decisions?

Why is a clear strategy so important?

Almost a third of companies are yet to construct a strategy and business case around digital finance transformation. Grant Thornton UK partner Mark O’Sullivan says: “This matches our experience that many organisations don’t recognise its importance. All too often we see ownership and responsibility for decisions on IT systems and technology delegated to the IT function with minimal or no business input. They are then surprised when they come to implement that technology and the affected areas of the business have no engagement and it ends up being a poorly implemented, poorly used technology.”

Emerging markets keen to implement the latest technology

A regional breakdown of the figures suggests that many organisations may be sitting back, waiting to see how digital technology develops. Mark says: “In developed markets we’re finding many organisations aren’t making progress because they want additional assurance around certain aspects of the cloud technology model, whether that’s security, integrity of data, functionality, or the overall financial situation in terms of balancing operating expenditure versus capital expenditure. There is a nervousness about being early adopters.”

But while there may be hesitancy in some mature markets, emerging markets are increasingly taking a positive approach and implementing the latest technology. As Mark says: “When you’re coming from a legacy position that is behind markets like EMEA, it’s easier to make the business case. Mature markets are more risk averse and holding off to see how cloud develops.”

Data holds the key to successful business intelligence solutions

More than 30% of respondents have indicated that they plan to invest in business intelligence and enterprise performance management (EPM) solutions, with enterprise resource planning (ERP) also scoring highly at 28.6%. Mark says: “The results are in line with what we expected. Around 50% of the conversations I’m having are focused around organisations that want to employ business intelligence.

However, it often comes back to challenges around the quality of data. Organisations know they want business intelligence, but don’t understand what it takes to deliver it, the steps you need to take in creating integrity of data. Similarly, they often don’t understand the possibilities.”

What’s the ‘biggest source of inefficiency’ in finance functions?

North America is leading the charge on business intelligence, visualisation and data dashboards, while there is a solid adoption across the globe of EPM tools, such as financial planning, close and consolidation software.

Mark says: “The EPM side is reassuring as this is basic ‘housekeeping’. When I go into finance functions the failure to properly embed quality EPM is the largest single source of inefficiency in a finance function. Whether it’s the amount of manual effort taken to close down the month-end or the amount of effort that goes into planning, budgeting and forecasting without really yielding any better quality in terms of the outputs.

“It’s the biggest single source of waste that I see and therefore it’s reassuring that those markets are seeking to address that. We can also see that the US is a bit further down the line, as shown by its lead in business intelligence and advanced analytics.”

Better business decisions

These survey results back up the points made in How can the finance function seize digital opportunities? article which highlighted the importance of planning, strategy and having a business case. Mark explains: “If you think about what drives an organisation, there are three key areas: people, processes and technology. Together they underpin your strategy, whether it’s strategy for the finance function or your entire organisation. If you align the decisions that are made around technology to your strategy, you’ll make better business decisions.”

Stefano Salvadeo commented: “The introduction of IT tools in businesses a few decades ago gave rise to a first technological revolution. Nowadays, with the development of new technologies, artificial intelligence and the digitalisation of business processes, companies are facing a new challenge, which needs to be met promptly and systematically to seize the opportunities it entails and improve the business. Avoiding to take on the challenge could put them at risk both in terms of business sustainability in the medium-long term and in terms of visibility.

The data above, unfortunately, show that only about 30% of the businesses interviewed has a clear vision and a structured business case. This will inevitably result in innovative businesses becoming leaders in their markets, against other companies being left behind. There is still time left, people within businesses need to identify areas where the digital transformation can create value and appoint project leaders to lead change”.

*The Grant Thornton International Business Report (IBR) is the world's leading mid-market business survey. The report surveys more than 10,000 senior executives in 37 economies on an annual basis, providing insight into the economic and commercial issues affecting both listed and privately held businesses.