Optimism Abounds in Finance Departments
Despite the challenges of last year, CFOs are altogether positive about the face of things to come. What’s bolstering their outlook? AppZen’s Andrew Foster reports.
The past year was full of surprises, with changes coming thick and fast on both a global and a personal level.
Finance departments have also seen rapid change. To explore how CFOs and their teams are adapting to the dynamic business environment, AppZen surveyed over 200 finance professionals across the US and UK, asking them about their business priorities, their use of IT to adapt to change, and how COVID affected their departments.
From evident optimism, to changing skills requirements for hiring, this blog explores five of those trends.
Most CFOs are very optimistic about the future
Despite the substantial financial challenges that organisations face in the current environment, 66% of the CFOs surveyed feel they are looking at a positive future, and around the same number anticipate growth. This positivity occurs across almost all business sectors.
Those expecting to see growth are focused on proactive use of technology moving forward. This group sees technology as critical, and their priorities include the increased use of analytics, better enablement of their remote workforce, and optimisation of working capital. Those who expect to struggle in 2021 are more focused on cost savings than investment.
Support from the C-Suite is the biggest inhibitor to digital transformation
A massive 86% of survey respondents said they have accelerated their digital transformation projects this year. In many cases this is based on their experience of needing to work remotely in 2020, and finding that IT offered a lifeline. Surprisingly the C-Suite is not universally supportive of this drive. The biggest challenge expressed by those implementing digital transformation projects was a lack of support from the C-Suite, a situation experienced by 1 in 5 organisations. This topped cost and training issues as the biggest roadblock to change.
If finance transformation projects do not ultimately have the support of the C-suite, the rapid pace of change may not continue in 2021.
Finance teams want technology and digital skills more than finance and accounting skills
Traditionally finance teams have required finance and accounting skills, but the increasing use of technology in the finance function is leading CFOs to value a different set of skills equally highly.
Our survey showed that recruitment requirements for finance currently show an equal demand for technology and digital skills as for finance and accounting skills, and in some industries the balance tips further towards technology skills. Around one third of survey respondents cited improving analytical skills as their key priority for the year.
This trend comes as CFOs bring digital and technology capabilities into their teams directly, giving them more control over their systems and reducing the need for IT involvement.
Almost half of organisations still take 7+ days to process invoices
Despite considerable advances in automation within finance departments, almost half of the organisations surveyed still take seven or more days, on average, to process an invoice. Comparing this to best-in-class invoice processing times of just under three days per invoice highlights that some finance teams still lag behind.
Indirect invoices, paper invoices and non-PO invoices cause the main problems. These are issues solvable with modern AI-based invoice processing solutions, but less than half the respondents said they automate ingestion and extraction of data from invoices.
Respondents clearly understand the benefits of AP automation, as 4 out of 5 organisations surveyed believe that adoption of AP automation would enable remote working and reduce errors in manual processes. Yet turning understanding into reality is still a challenge.
CFOs wish they had invested more in technology in the last five years
Our final finding is the admission that almost half of respondents wish they had invested more in technology over the last five years. Specific areas that the finance team would have liked to have implemented by now include advanced analytics, with two thirds of respondents wishing they’d paid it more attention. Other areas on the hindsight wishlist included AI, blockchain and RPA.
Conclusions
Despite some resistance to change, CFOs and their finance teams are increasingly drawn in by the lure of technology. 2020 saw remote working pile pressure on IT systems, but moving forward, strategically-astute CFOs will look more at how technology can add value within the finance function.
Those who have mastered the basics of automating invoice processing and expense management are now moving onto advanced analytics and using AI and RPA for more than just processing numbers. They are pulling further and further ahead of those still taking ten days simply to process an invoice.
Andrew Foster is VP of Consulting Services at AppZen – you can hear him at the Big Ideas Summit London
