Why it's time to re-invent finance with IT

Financial services is one of the more respected, highly-trained, and revered departments of any business. Accountants (both management and chartered), actuarial professionals, and financial professionals of all disciplines generally take on several years of post-graduate studies that put them in line for a potential slot in C-suite management, if they choose to pursue that course.

One would think then, on that basis, that finance would insist on using only the sharpest processes, the most contemporary technology tools, and the highest grade workplace systems possible.

Strangely—and somewhat paradoxically—this is typically not the case.

Skyrocketing slowness

According to Gartner, “on average, finance is the third-slowest operating corporate function behind legal function and IT. 73% of finance functions face pressure to speed up. As request volumes skyrocket and budgets stay flat or are reduced, finance leaders tell us they are looking for new approaches to finance operational efficiency to meet growing business needs”. (Source: Gartner: Build a Finance Function that Meets Business Demands, 2018)

We need to stand back and ask ourselves how we can improve the speed of these corporate functions, including finance. Much of the truth behind this predicament lies in tradition, custom, and ritual. Yes, accountancy has moved out of “bookkeeping” on paper and pencil ledger books into the fabulous world of spreadsheets, but many of the same age-old work processes are still resolutely in place.

We know that finance still uses many essentially manual processes, including emails and spreadsheets to manage workload. But these are disconnected platforms, software applications, and data streams that lack any discernible degree of autonomous intelligence and service automation.

As in finance, as in everything

But this whole discussion extends way beyond finance. The financial function may have been called out here for want of highlighting a trend that needs bucking, but there is an equally inequitable level of disconnectedness that pervades throughout every business function.

We should remember that finance is the broker for so much of what happens inside any business, i.e., it “signs the cheques” and makes things happen so to speak. But really, the IT department has the same brokerage responsibility. If it doesn’t provide the platform and connectivity conduits for information exchange to happen in a fluid fashion, then work doesn’t work the way it should.

Looking at the other workplace disciplines at play here, Gartner’s analysis pointed to finance as third slowest as a department. The analysis then ranked R&D, sales, human resources, the risk department, and then audit and procurement as the most sluggish company divisions, with marketing (both B2B and B2C) coming in last.

Steps for action

So how should organizations bring about change in the face of operational systems that are often weighed down by the anchor of traditional processes and archaic systems management?

A good starting point rests on an analysis of how any organization should think about redesigning the core operational building blocks of any business function. A business should also think about how it is going to deal with the impact of new information flows as they traverse the business. The reality of shared services that dovetail across new intelligent business functions means that there is an inevitable need for a new level of threading and connection.

Financial service institutions are under pressure to adapt to a rapidly changing environment. Those that do can turn the high pace of change into a competitive advantage with tremendous growth potential. But adapting to these market dynamics will require embracing new ways of working such as putting a single platform to work across your enterprise—to boost visibility, enable compliance, and deliver great service.

(Discover the platform being used to reinvent financial services.)

Coming full circle

We started with finance. Those highly trained professionals who actually need to embrace a new era of reinvention. But, it turns out that finance isn’t that different from all the other departments in any given business. As we have said, finance has a foundational broker effect in the business—so if it’s done right, then the effect throughout the business will be positively virtuous.

Monty Python’s classic comedy accountant may have wanted to grow up and graduate to become a lion tamer, but we’re not suggesting quite that much reinvention is needed. You don’t need to get into the circus to pull this act off.

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