By Rachel van der Merwe, Director of Product Marketing, EMEA North, SAP Concur
We live in a world where immediate feedback is now the norm. From continuous engagement on Twitter to the updating of Facebook – we can see thoughts and ideas forming in real-time. There may not be an immediate connection between social media and finance teams but look a little closer, strip back the filters and hashtags and you’ll see there is a valuable lesson that can be learned from a particular feature of Instagram.
Instagram Stories enable users to get immediate answers from their followers through its polling feature – do I buy this top in black or white? Should I wear these trainers with these trousers? Within minutes – if not seconds – their followers have cast their vote; the results are in and a decision has been made. At users’ fingertips, they’ve got the insights to forecast the trends that are relevant to them.
In direct contrast to this, to get the insights needed to inform their decisions, finance managers often have to pour over, compare and analyse financial reports in order to spot patterns, identify inconsistencies and understand behaviour. This isn’t a process that takes minutes and can sometimes take weeks. And by the time they have the data the business has moved on, or goals and targets have changed, and the data is no longer useful.
The issue often lies with the lack of financial visibility that stems from the disparate legacy systems that are being used by finance teams; they are layered one on top of the other, without the interfaces required for an easy connection of financial information to get one big picture of all data. Quite simply, it’s an arduous process for information to be inputted, and even trickier to get the necessary information back out again.
Further issues also appear owing to the technology infrastructure itself. The traditional makeup of this is bound to two different issues that can lead to difficulties when updates are needed: legacy technology and on-premise solutions being used. Couple legacy technology with a prevailing use of on-premise hardware, as opposed to cloud-based solutions; this combination can prove difficult to adjust and expand when needed, to connect data sets its is often a more expensive route to take.
Taking this one step further, many businesses today are still handling certain finance processes with a combination of paper invoices and spreadsheets. Manual processes are extremely time consuming for staff. Entering data in this way is an incredibly slow process and as a company grows, so too will the time needed to dedicate to it.
But what if finance could take a little inspiration from the social media giants? Much like the polling feature, using mobile apps, expense and accrual information can now be captured in real-time. Expenditure and cashflow is now just a dashboard away for finance teams, rather than through the onerous analysis of reports. This means that spend can be tracked in real-time – giving that social media style instant form of feedback, rather than only being available at particular times.
On a more granular level, this means, for example, you can identify a peak in client entertaining in December across three key restaurant chains and next year look to negotiate a discounted rate. Or due to having increased financial oversight, you can invite more people and create a better experience at an event you’re hosting by using someone else’s budget who has spare to use up.
Cloud connectivity and platforms, underpinned by powerful data analytics, mean that this data can all be collated and accessed in real-time. Just like their insta-savvy peers, finance teams can put themselves into a position where they have their finger on the pulse.
Companies are increasingly seeing their CFO and finance teams as valuable drivers of innovation and growth. For them to continue to contribute to businesses in this way, they will need access to the technologies that enable them to influence positive change. Having tools that are intuitive, easy to use and speed up the processes for these teams, will allow them the freedom to do what they do best – rather than being tied up in paperwork and spreadsheets.
Ultimately, they will be able to see when and where spend is happening, identify out of policy activity, set more accurate budgetary levels and introduce more dynamism into how finances are managed.