Since the pandemic began, everyone seems to agree that adopting cloud-based workplace solutions makes a lot of business sense. In the face of a remote work revolution, even the biggest office stalwarts have finally changed their tune.
But according to The New Yorker, the most forward-thinking organizations didn’t miss the forest for the trees—they were prepared for a future full of technological efficiencies and dependencies long before the pandemic. In fact, companies like Samsung, Ford, and even NATO were hiring futurists and science fiction writers to help them better visualize the future of work.
While we don’t expect most organizations to go that far, finance teams do have to think more out of the box than they ever have. Finance leaders are living through an unprecedented paradigm shift in terms of how we do work and where we spend money on and off the job.
Finance leaders must become strategic business partners
In order to stay ahead of the competition and make the best possible decisions for their organization, they need an edge. To really succeed, finance teams need to leverage the most valuable asset they have: their data.
Specifically, finance teams need to embrace automation in order to collect better data and free up more time for actionable data analytics. That’s the only way they’ll be able to deliver on lofty business goals while tackling expense management challenges and optimizing spend.
Of course, reaching this goal is easier said than done. For some companies, stakeholders may have to agree on a new enterprise expense management solution. For other companies, a total culture and tech stack overhaul could be required.
Whatever the case, automating efficiencies and implementing better data analytics can help any organization survive and even thrive—whatever the future may bring.
Automation saves time and money while improving morale
First, let’s talk about automation, why it matters more than ever for finance teams, and how it can help your company.
According to a KPMG study, even before the pandemic, 97% of CEOs saw technological disruption as more of an opportunity than a threat. The pandemic has only accelerated the inevitable: these days, just about every Finance department is transitioning towards or actively implementing a cloud-based financial or expense management solution.
Workflow efficiencies like robotic process automation (RPA) for repetitive manual tasks (e.g., creating purchase orders, reconciling transactions, flagging out-of-policy spend, etc.) just make business sense. Then there’s machine learning (ML), which can help with more nuanced, labor-heavy tasks such as contract review.
But in addition to reducing cycle times for essential, day-to-day finance and accounting processes and reducing manual labor by up to 70 percent, automation can also help finance teams in three key ways:
Gather more accurate data more frequently and reliably as team members across departments adopt automated systems and applications.
Quickly analyze data and generate actionable insights. This allows Finance to become strategic interpreters of data, providing invaluable insights into budgeting and spending.
Empower finance team members to focus on more meaningful, strategic, and high-impact work—which also improves team morale and productivity.
Of course, adopting automation is the first step to arriving at this data- and insights-driven approach to finance. KPMG encourages finance leaders to stop thinking in terms of FP&A (financial planning & analysis) and in terms of BP&A (business planning and analysis) instead.
Data-driven decisions are the only ones worth making
In a recent Forrester study that surveyed 311 global finance decision-makers, nearly half of respondents agreed that “increasing data-driven decisioning” would be critically important to the future success of their organizations.
Specifically, 46% of respondents in the Forrester study said that their organization plans to improve its use of data-driven decision-making to better inform strategy and tactics. This is critically important for any company that wants to thrive in markets that are rapidly changing and increasingly competitive.
According to a Deloitte study of 784 worldwide finance leaders and professionals, most finance teams recognize the need for advanced data analytics and visualization solutions. In fact, 39.7% of surveyed finance teams planned to implement or were currently implementing better data analytics. Yet only 10.1% had already implemented a solution.
Unfortunately, while most organizations recognize the need for more process automation and data-driven decision-making, they’re just too busy slogging through endless manual tasks to even begin thinking about how to approach data analysis.
As an example, many accounting teams are still bogged down by tedious manual labor: 75.7% of respondents in the Deloitte study reported that their company’s accounting processes were “still a considerable manual effort” or “largely manual” (i.e., less than 50% automated).
Put another way, nearly 80% of accounting teams still spend more than half their workweek on manual work that should have been automated yesterday.
The good news is that most finance professionals know they urgently need to get ahead of the automation curve. They recognize that manual workflows detract from strategic, high-impact work like data analysis. And they agree on how the type of work they do will change over the next five years.
While 8.4% of finance professionals believe their jobs will remain the same (it probably won’t), 91.6% of surveyed finance professionals believe their work will be “somewhat more analytical” or “significantly more analytical.”
Here’s the bottom line: data and insights-driven businesses that focus on automating efficiencies have an insurmountable edge over their competition. They can sync all of their data 24/7, analyze it from every possible angle (far faster than humans with spreadsheets), and continually optimize workflows by identifying new efficiencies.
Collect better data, gain deeper insights, do better business
Firms that have already implemented automated finance and expense solutions have seen immediate ROI in terms of improved productivity, efficiency, and accuracy. In fact, according to Forrester, the #1 business benefit observed by 75% of companies that have implemented an automated expense management solution is better data.
In 2021 and beyond, better data will be more important than ever for finance teams that need to grow revenues and increase profitability. Finance leaders need to stop thinking like they’re a separate department. They need to start embracing automation and giving themselves the time they need to make more data-driven decisions that reliably move the needle.
If you want to learn more about data-driven decision-making, read the next post in this series: Automating Finance Part 2: How Automation Helps Finance Achieve Critical Business Goals