Recent global crises have permanently changed the face of finance. Still adapting to a rapidly changing market, organizations are striving to embed data processes that can help guide them through these uncertain times.
In the wake of these changes, the finance function has transitioned to a more forward-looking approach as well. Tangibly, this means more planning, more accurate and deeper forecasting, and more strategic decision-making based on real-time reporting.
insightsoftware recently partnered with Hanover Research for the second year in a row to survey finance decision makers regarding changes they are seeing in their daily finance roles. This year, 514 respondents from North America and EMEA revealed some of the trends shaping finance and the progress being made in the journey to digitization.
One key finding? Finance teams are striving to achieve agility.
Agility Is Key to the Finance Function
In this year’s survey, 41 percent of finance team leaders considered strategic decision making to be a priority, compared to 29 percent in 2021. The reasons for the uptick are clear. The Office of Finance is now firmly seated at the strategy table within organizations, as leadership looks to financial data to inform key strategy questions.
That reality is further confirmed by the 42 percent of respondents who listed “enabling the organization to make flexible and timely decisions” as a top priority. Other related tasks that saw big jumps in prioritization for finance were “management of company’s investments,” “internal risk management,” and “short-term business strategy,” all of which carry strong strategic importance.
As Finance’s role in organizational strategy continues to grow, the need for agility becomes more urgent. Organizational leadership is looking for quick answers to rapidly evolving situations. They want the right analytics to provide the right answers to the right people at the right time.
That’s a tall order, but it is not necessarily out of reach for the finance team.
Effectiveness and Efficiency Is Growing, But Agility Remains Elusive
The survey indicated signs of improvement in both effectiveness and efficiency across multiple finance responsibilities and tasks. More than three-quarters of finance decision makers described the process they use to address each finance task as effective. Respondents also reported that their processes are significantly more efficient in 2022 than they were in 2021.
That sounds great, but here’s the rub. Among the tasks with the least amount of improvement in effectiveness were budget and forecasting (up just 4 percent since 2021) and strategic decision making and short-term business strategy (both up just 7 percent since 2021), all of which require agile processes. On a positive note, long-term business strategy effectiveness was noted as being up 13 percent from 2021 levels, with 83 percent of respondents reporting increases in effectiveness in that key finance function. Even so, it’s clear there is still much work to be done.
How Finance Can Achieve Agility and Support Organizational Decision Making
A significant reason for increases in effectiveness and efficiency is the rising adoption of technology designed to automate and streamline finance tasks. More finance decision makers are either currently using new technology or planning to do so in the near future. Technologies seeing the biggest bump in adoption include:
- Automated reconciliation (up 14 percent from 68 percent in 2021 to 82 percent in 2022)
- Technical accounting (up 13 percent from 72 percent in 2021 to 85 percent in 2022)
- Disclosure management (up 13 percent from 67 percent in 2021 to 80 percent in 2022)
Respondents also reported using automation tools for:
- Budgeting and planning (91 percent)
- Financial reporting (89 percent)
- Operational reporting (84 percent)
- Revenue recognition (83 percent)
- Tax provisioning (83 percent)
Also of note was the 12 percent uptick in the use of data visualization tools. These tools are a great boon to decision-makers looking for quick answers to strategic questions.
Although 41 percent of finance leaders listed adoption of new technology as a top challenge, finance teams are still forging ahead on the digitization path. They understand that adopting new technology to streamline processes is the surest way to achieve true agility and support organizational decision making.
Leverage Purpose-Built Tools for Agile Decision Making
insightsoftware’s suite of financial and operational reporting solutions are purpose-built for the acute needs of finance teams globally. Our solutions layer directly over your enterprise resource planning (ERP) solution to provide you with the most current data analysis possible. With insightsoftware solutions, you can refresh reports in minutes rather than hours or days, and you can be confident that your numbers are accurate because they are pulled directly from the correct business systems with no need for tedious copy/pasting into manual spreadsheets.
Our budgeting and planning solutions help growing organizations scale their planning processes by simplifying and automating manual processes to drive faster cadences, more effective collaboration, and drive smarter decisions from more accurate data.
- Shorten cycles to support continuous planning – With an intuitive interface, planners can create any type of budget, forecast, or planning form to support a robust and cohesive planning process. By eliminating the manual processes associated with multiple disconnected spreadsheets saved on individual PCs, multiple participants can contribute to a plan, all working from a single source of truth, with access to up-to-date data at any time, and on any device. Your planners can create repeatable, standard planning processes that automatically reflect changes in your ERP system and use embedded analytics to monitor performance and detect trends, all without relying on IT.
- Break down silos and create planning transparency – Save time by taking control of your budget entry and approvals using powerful workflows and automated, coordinated email notifications to your team. Deploy budget contribution and accountability to the frontlines of the organization, having them input budget/forecast numbers at the relevant dimensional level, using the most relevant drivers. Sophisticated data access rules and a full audit trail of changes ensure adherence to governance and compliance needs.
- Increase Planning Accuracy – insightsoftware planning and budgeting solutions help organizations adjust and adapt plans and forecasts throughout the year, using rolling forecasts to drive agility and accuracy across the organization. Frontline workers enter their numbers, and the system automatically rolls-up and updates forecasts with a single click. FP&A managers can change existing models on the fly and model multiple scenarios to adapt to evolving business needs. Built-in version control allow you to keep track and compare current forecasts to previous figures.
Give your organizational leaders the right information at the right time and solidify your role as a strategic contributor to organizational agility and growth with insightsoftware.