Digital Finance Transformation Vs Replacement

Sep 9, 2019

Looking for a new Corporate (CPM) or Financial Performance Management (FPM) solution is a daunting task. Phrases like manual task automation, huge efficiency gains, critical time-saving functionality and digital transformation appear on every software provider’s website and the accompanying dashboard visuals appear to show that they deliver the goods.

Many systems and solutions will offer what you need, and will seem to match your existing needs and system requirements. But are you sure that your existing systems and processes are delivering maximum efficiencies?

Are they future proof?

As we all know, the role of the CFO and senior finance professionals has changed. Finance is expected to manage ‘big’ data and derive from it, value and actionable insight, often at the touch of a button. You could say that the role of the Finance Team has been through a transformation in the last 10 years – and now it’s essential that our technologies & processes follow suit, hence ‘Digital Finance Transformation’ has been a hot topic recently, and rightly so.

Too often when we need to replace something, we do just that, we replace it with what we know. In terms of the changing role of the finance team, do you really understand what your business needs to stay competitive and what system solutions your team needs to grow and evolve? The first step in choosing the right CPM/FPM solution is understanding amongst others, those key factors – identifying your team, business, customer and regulatory needs in terms of technology, service and offering. This will guide you in building the right finance processes and systems to keep your business future proof and competitive.

Yes, a simple replacement system might tick a few boxes. It’ll be faster, reporting will be more efficient, and it might look more modern. In fact, as long as you find one that matches your existing needs and system requirements, it may just do.

But the smartest CFOs know that the search for a new Corporate Performance Management solution goes way beyond the simple replacement of systems and software. In a climate of increasing economic instability, where finance teams must deliver so much more than their core governance and reporting mandates, the right CPM/FPM solution can be genuinely transformational.

The moral of this story is, turn away from simply looking for a replacement system, invest in a solution which will ‘Digitally Transform your Finance Team’.

But what does ‘Digital Finance Transformation’ actually mean?

What are the key things you need your finance team to do in order to truly Transform?

How do you make sure that your new solution is built to support this?

How do you make sure that it’s not just an aesthetically better-looking version of what you already have?

A closer look at Digital Finance Transformation

Digital Transformation is about more than just process efficiency improvements. It’s outward-looking and forward-thinking – bridging gaps that allow essential business intelligence to flow at pace. It’s about thriving, not surviving. Creating value, fostering a culture of analytics that enables deep commercial insight and strategic forecasting. Above all it’s about positioning the finance function as a key driver of improved business outcomes.

It makes great sense in theory. But how can you be sure that the new CPM/FPM solutions on your shortlist are up to the job?

At HAYNE, the UK’s leading Financial Performance Management consultancy, we suggest you consider these key areas when reviewing your CPM/FPM solution:

1: Is it people-friendly?

It’s tough to challenge the way things have always been done, especially where traditional methodologies have proven themselves faithful servants for many years.

But your enterprise won’t benefit from the full potential of new technologies if you can’t win the hearts and minds of your stakeholders. From colleagues and peers, to customers and suppliers, it’s essential to get people on board with new tech and help them understand their role in the transformation it can bring.

All this requires a personal touch. Change management, therefore, is an essential part of digital transformation. To a certain extent, you can change technology and you can change processes but neither will work without re-skilled, on-board people.

A couple of key features to look for then are customisable workflows which allow different people in different roles to be given logical tasks which exactly suit their needs and self-service reporting that empower users to write their own local reports to further embed solutions right across the business.

2: Does it offer next-generation analytical capabilities?

Gone are the days when finance teams simply monitored and reported on historic performance. Now CFOs are expected to harness the power of big data to provide real insight into what’s happened, as well as predicting what’s going to happen and making early recommendations for how this can be improved.

All this brings the need for streamlined data collection and powerful analytic technology. Capability that lets you close fast, meaning you spend more time analysing data, and less time processing it.

But powerful doesn’t have to mean complex. Often, it’s about breaking things down, being able to see your data at a more granular level e.g. transactions rather than balances, so you can drill down into your data, spot trends, make predictions and advise your stakeholders on the key drivers for business growth.

3: Is it future proof?

It’s worth spending some time checking out whether the system you’re considering can scale and adapt to both micro and macro changes within the business. Of course, these days we look for features like in-memory computing and performance engines that quickly process high volumes of data, giving you a platform that’s ready for your future needs. However, you also need to check out vendors’ past responsiveness to regulatory changes. Have they delivered point solutions for some of the recent “bumps in the road” like Insolvency II, IFRS 15, 16, 17 etc? In other words, are they going to support your future business needs as well as they claim to support your present needs?

4: Does it offer a user experience that’s centred around YOU?

The sheer volume of data available and the dizzying range of technological capabilities on offer by various vendors can be intimidating. But don’t allow yourself to be blinded by science. Remember that your chosen solution should make your life easier, helping you leverage technology to your advantage. Ask yourself, is this easy to use? Will it help my team be more self-sufficient, relying less on support from IT? Is it flexible enough to suit my specific needs?

A feature to look out for is ‘customisable workflows’ that enable you to tailor the solution to different user roles within your business and the capability to interface directly with existing ERPs. Alongside the obvious benefits these bring in terms of reduced risk, it makes your life so much easier. Equipping decision-makers with the intelligence needed to make informed operational decisions at pace, driving real business results.

Some solutions also integrate the MS Office platform with the native Excel, Word and PowerPoint tools that we’re all so familiar with. Transformation doesn’t mean ditching the stuff that’s working fine in favour of something newer and shinier, it’s about making it work smarter.

5: Does it drive demonstrable efficiency?

Come to a board meeting with a request for a new financial solution in the current climate and eyebrows will undoubtedly be raised.

Businesses are under greater pressure than ever to make cost reductions and optimise efficiency. Look for solutions that:

  • can speed up the financial close
  • buy you more time to do analysis before you publish to stakeholders
  • give you slick planning/ forecasting tools such as bottom-up top-down breakback and HR planning
  • push company consolidation journals back to ERP to avoid “Consolidation Clutter”
  • offer “Double entry” planning. So many clients either plan profit & loss or balance sheet (sometimes both but often not in tandem). e.g. modern planning solutions use financial intelligence to link debtors and VAT to revenue calculations.

It’s no secret that finance functions have been slow to adopt the intelligent technologies that are already benefiting their colleagues in marketing and sales. Naturally data-driven and risk-averse, CFOs are under increasing pressure to be tech-savvy and make tough strategic technical investment choices. They need to recognise emerging technologies and build adoption strategies.

What next?

Digital Transformation is now not just something we read about, it’s something we need to be strategically planning for and working towards. We regularly hear that businesses don’t just want to buy software, they want to see real transformation from their investment. This is why we focused our annual conference ‘Spotlight’, on this very topic in 2019. Titled ‘Digital Finance Transformation – People, Process, Technology’, this event was aimed at helping you develop a 21st-century strategic plan for your finance team.

Spotlight took place in October 2019 in London UK. Finance, Operations, IT and BI professionals, along with our inspirational Keynote speaker, Dame Kelly Holmes DBE, celebrated 10 years of HAYNE Solutions.

About HAYNE Solutions

HAYNE Solutions, formed in 2009, is a leading consultancy with deep domain experience of the finance team and related processes. We have significant experience in designing and delivering solutions for organisations of all sizes and across many industry verticals. We work with a select number of leading technology vendors including IBM, CCH Tagetik and Lucanet to provide an extensive range of solutions covering the needs of the finance team and beyond into the operational parts of the business.

HAYNE is based in Stratford-upon-Avon and has customers throughout the UK, Ireland and Europe. These range from global FTSE100 companies to the NHS and SME organisations.

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