Finance Execs Turning to Cloud, Non-Financial Big Data and Enterprise Performance Management to Support Strategic Initiatives
Today’s finance professionals are optimistic about their companies’ performance and view themselves as strategic partners to the business with responsibilities that go beyond traditional finance and accounting roles. However, they are keenly aware of the organizational and technology barriers to success. These findings, along with other insights into the finance function, come from a recent survey of more than 250 senior level finance and accounting professionals commissioned by Host Analytics and conducted by Radius Global Market Research. The study set out to better understand the role that finance departments play in today’s organizations and uncovered perceptions and trends about the role of finance and technology in businesses today.
Perception and Reality: The Role of Finance in The Organization
According to the survey, 74 percent of finance professionals describe their relationship with other operational roles throughout the organization as “extremely good,” or “very good.” And when it comes to finance’s role, when asked “which of the following best describes the primary mission of the finance department at your company?” respondents answered:
- Work with investors to maximize company value: 25%
- Produce timely and accurate financial records: 22%
- Ensure the correct allocation of resources: 19%
- Be a strategic partner to the business: 17%
- Drive operational excellence through the company: 12%
- Ensure compliance with laws and regulations: 5%
While the majority of finance professionals report strong relationships throughout the organization and eight out of 10 report a positive outlook on the year, there are technology and cultural influences that impact the finance team’s ability to achieve their mission.
From a technology perspective, 50 percent of respondents cited a lack of systems and tools and 48 percent cited difficulty in accessing the necessary data or reports. The non-technology related factors cited by respondents were: “lack of time,” “the organization does not value input from finance,” and “high staff turnover.”
Spreadsheets Still Hanging On; Big Data, EPM, and Cloud Rising
Technology continues to play a bigger role in the finance department with the continued, widespread use of spreadsheets and the rise of Big Data, enterprise performance management (EPM) solutions, and the adoption of cloud-based platforms.
Spreadsheets remain ubiquitous in finance departments with 43 percent of respondents
reporting that Microsoft Excel plays a significant role. Today, Excel is also being used as an integral part of their strategic financial processes, with a full 57 percent of survey respondents using it to meet EPM requirements in planning/budgeting, financial reporting/disclosure, and analytics, either on a standalone basis or in conjunction with other tools.
Based on the survey insight, cloud-based EPM interest and adoption continues to grow as 41 percent of respondents currently have a cloud-based EPM solution, 29 percent are evaluating them, 23 percent plan to move to the cloud in the next few years, five percent are planning to move to the cloud in the next two to three years, and only two percent reportedly have no intentions to move to the cloud. But that doesn’t mean the use of Excel will end anytime soon, with 46 percent saying it will continue to play a role in their EPM processes in the next three to five years.
According to the survey, the two biggest concerns in moving to a cloud-based EPM are performance and security. However, businesses are getting used to the idea with 88 percent citing they are more comfortable today with it than they were two to three years ago.
Along with moving to the cloud, finance professionals are also turning to non-financial Big Data from sales, marketing, and the supply chain to help with the planning process. When asked, “In what timeframe does your company plan to use Big Data or non-financial data in the planning or reporting process?” 28 percent reported they currently use it, and 71 percent plan to use it over the next one to three years.
This research was completed by over 250 executives in the accounting and finance field, randomly recruited by Radius Research from a large pool representative of the market. 40 percent of the executives surveyed for the study were C-level, with 35 percent being directors, and 26 percent being vice presidents and/or controllers. Participants came from a wide range of industries including services, manufacturing, retail, software developers/vendors, healthcare, non-profit, and education with 19 percent of the respondents working at companies with $1 billion or more of revenue.
“When you do technology market research studies, you start to see how interconnected things are within companies,” said Michael Patterson, senior vice president at Radius Research. “If a department sees their focus different from others within their same organization, it’s important to drill down and investigate that discrepancy, and it’s often related to technology that would empower a team to do more things more efficiently.”
“While spreadsheets continue to play a significant role, it’s clear that finance professionals are looking to other resources to gain the much-needed process efficiency and insight into performance across the company,” said John O’Rourke, vice president of product marketing for Host Analytics. “With a cloud-based EPM platform, companies can handle the heavy lifting of collecting and processing budgets and forecast data on the back-end, while letting the users continue to use spreadsheets on the front-end for reporting, analysis and data entry. This, in turn, reduces the level of manual work, and chance for errors, and allows finance to shift more time to value-added analysis and being a strategic business partner to the organization.”