In an ever-changing business landscape, the COVID-19 pandemic has accelerated the need for organisations to be more agile and adaptable than ever. Particularly the finance function, who are increasingly the central hub of many organisations, who drive the priorities of the business and how they are going to be realistically achieved.
The cloud has fundamentally changed the way in which business technology is implemented and used, and it represents a huge opportunity for the finance function. In fact, cloud spending rose 37% to $29 billion during the first quarter of 2020. The cloud is freeing the finance function from administrative tasks, helping them win back valuable time from mundane tasks and, in doing so, giving them the opportunity to lead digital transformation.
According to Gartner, organizations have found that the move from on-premises to cloud solutions is typically not a simple technical upgrade. It represents an opportunity to redefine and transform a finance organization.
What does the finance function look like now?
In 2020, digital transformation of the finance function has not gone far enough. Technology adoption lags behind other corporate functions, such as marketing or human resources. As a result, finance can be perceived as a “traditionalist” team rather than innovative ground breakers. The finance function relies heavily on tools no longer fit for purpose and spends most of their time gathering data rather than analyzing it.
According to this Gartner report, many have often found their legacy solutions to be too IT-reliant and a hindrance to enterprise collaboration within finance departments and other finance areas. For example, many of those involved in rebate accounting still rely on Microsoft Excel because It is relatively easy to use. However, it does have limitations, many of which see professionals stretching the tool to its limits. That’s where cloud-based tools like rebate management software comes in.
There is also a consensus that the CFO and CIO don’t currently have a strong working relationship. In a workday report, 74% say that CFOs and CIOs need to collaborate to drive IT innovation in the digital economy. Plus, 66% say that IT executives are reluctant to collaborate with their finance peers.
The CFOs are the ones playing a critical role in driving digital transformation as they navigate COVID-19 recovery, but they face certain obstacles including a technology skills gap and internal resistance to change. While cloud technology can create greater value, there will be no real benefit to the business without the right people with the right skills to use them effectively. CFOs should begin preparing now for the finance function they will need in the future, or risk falling behind.
What could the finance function look like beyond 2021?
Looking ahead from now, the finance function still has many challenges ahead but also many opportunities to transform. They will need to find new ways of working, using powerful tools and technology and apply broader skills to deliver strategic objectives. But also save costs wherever possible while balancing business continuity and financial resilience. The finance function should also reprioritize their projects to improve financials during periods of economic recovery, according to this Gartner report, in 2023, many of the core financial projects that were slated for 2024-25 will be undertaken sooner.
One of those projects is moving their manual, outdated processes to the cloud. Protiviti revealed in their recent annual Finance Trends Survey that 72% of CFOs and VPs of finance ranked cloud-based applications as a top priority to address over the next 12 months. The cloud is also supporting the finance function in becoming fully remote over time with a recent Gartner survey of 317 CFOs and Finance leaders revealing that 74% will move at least 5% of their previously on-site workforce to permanently remote positions post-COVID 19.
The finance function has a clear opportunity to ensure that it remains highly relevant and can accelerate the digital transformation journey going into 2021. Embracing technological innovations is crucial to increasing efficiency, driving decision-making, and supporting the company’s growth strategy. It’s important to ensure that the finance function doesn’t slip back into the old manual methods of working once the pandemic fades.
The benefits of cloud computing for the finance function
Reduce IT spend & workloads
A report from Gartner revealed that more than 90% of a typical IT budget is spent on maintenance, leaving less than 10% to drive innovation and business process improvement. Moving to the cloud enables the organization to not only reduce IT spend, but also shift the IT budget from maintenance to innovation and focus on the adoption of key finance initiatives like revenue recognition, building reports and optimizing workflows.
Access from anywhere
The rapid shift to remote working due to the pandemic, has given a significant boost to cloud computing. With the right security and an internet connection, systems and data can be made accessible to the finance function no matter where in the world they might be, allowing fast decisions to be made. This is driving operations to be more agile and enabling flexible working and more cost-effective staff structures.
Speed, accuracy and efficiency
Moving to the cloud means that the finance function can speed up routine tasks, and process more data than ever before. Automating key processes can prevent duplication and other human errors, which saves time, effort and money in getting your financial data up-to-date and accurate. Streamlining your processes and driving efficiency can improve your bottom line.
When talking with suppliers or other members of the finance function, you can access, edit and share documents securely, from anywhere. Cloud-based workflow and file sharing means updates are in real time with better visibility. A Forbes survey found that 64% of respondents indicated that cloud-based collaboration tools have helped their organizations execute faster than before.
Due to the time-saving nature of the cloud, core tasks, such as inputting data and financial reporting can now all be produced in a shorter period of time. Automating these repetitive tasks has unlocked valuable resources within the finance function to enable leaders to focus on areas of real business value.
Now is the time for the finance function to prioritize a move to the cloud
Although the finance function has been far slower to embrace the cloud compared to other departments. Ultimately, it’s no longer a question of if organisations should move to the cloud – but when. CFOs need to rethink the role of their finance function plays and take the reins in driving digital transformation in 2021 and beyond.