Central to the role that external providers can play in supporting the finance function is the use of rapidly evolving technology, which can reduce costs and risk, while adding value. But what is inescapable is that many finance functions are behind the curve when it comes to making the most of tech.
According to the EY DNA of the CFO survey, 47% of CFOs say their current finance function does not have the right mix of capabilities to meet the demands of future strategic priorities. Investing in technology now is seen as a way to future-proof that function.
CFOs and SFEs report the lack of a sustainable plan for data and technology is the biggest barrier to delivering on their finance function’s purpose and vision. This is very clearly disconnected with the fact that digitalization will underpin the vast majority of finance’s operations.
“The diversity of technology platforms and tools available in the market and the speed of new tools and new functional capabilities being introduced is amazing,” says Lapinskiene. “But it’s impossible for many businesses to keep up with everything that is going on and work out what is most relevant to them. And that is where we see clients need to make choices and prioritize things. What are the tools and the processes that they want to focus on in-house when they go through the digitalization process and which parts of process and technology can better be managed by the partners?”
The challenge for many is that the organization at large — with a finite technology budget — may well choose to focus on client-facing technology, dashboards and apps, leaving the finance function much further down the list. On one hand, CFOs and SFEs are flagging investment in technology as a priority — yet the average planned investment over the next three years is only US $3.1m, according to the TFO survey.
Regarding which technology to focus on, while there may be excitement about artificial intelligence, machine learning and robotics — with finance leaders saying the top priority over the next three years is advanced and predictive analytics (according to the CFO Imperative survey) — finance functions need to get the basics, such as ERPs and data, right.
“Before you end up with Blockchain and AI, you need structured data,” says Verhoeven. “And if you look at how data is still being presented today, it's not structured — it’s hard to do anything with it. So even if you are shouting out for new technologies, it will be almost impossible if you don’t have that structured data.”
Decisions around technology typically come down to “build” or “buy.” Considering the cost of building a solution, implementing it and constantly updating it, there are only so many businesses that have the scale to achieve this.
Others are turning to outsourcing because it gives them access to technology, people and infrastructure far quicker than trying to build their own. It typically also gives them a scalable model that can grow with their needs.