The Secret of Working Smarter for Finance Teams
The Finance Team faces many challenges, and often have to quickly adapt plans and budgets to take advantage of the prevailing and fast moving changes to the business landscape, particularly in the era of extreme uncertainty that we have all faced over the last 2 years.
Limited team resources and pressing month-end deadlines inevitably mean long hours and having to overcome many obstacles just to get the routine fundamentals completed. FP&A teams in particular face the challenge of not only creating and maintaining plans and budgets, but also finding sufficient time to analyse the results and provide the insights expected of them.
The Fundamental Problem
Finance Teams will all use multiple spreadsheets within the FP&A team and generally these are the result of well thought-out, diligent design and work well. However, when dealing with the challenges outlined above, in order to address new requirements, the most obvious and easy thing to do is to go back to the Excel spreadsheet models, adapt them, and then go through the whole planning and budgeting approval process once again.
The result of this approach is that all this takes time and soaks up extra resource that many FP&A teams simply do not have. The only option available is to simply work harder to solve the issue and that brings additional challenges when it comes to analysis – there’s no time left to do the task that is going to provide the greatest benefit to the business. FP&A teams therefore need a smarter solution.
The Finance Planning Process – What’s Missing?
The finance planning process is the real soak of time here, so logically, it is the one thing which needs addressing if we are to improve the FP&A team’s ability to deliver valuable insights in a timely manner. Traditionally, many enterprise software vendors have pushed for the finance team to give up Excel, claiming that it is the millstone slowing progress. Our view is that the use of Excel itself is sound – and that simply because financial teams are so used to using it, it is actually a very good tool to develop financial models quickly when change is required.
So, if Excel is a vital part of the Finance Teams armoury, what else prevents the team’s ability to quickly adapt plans and obtain approval for the new budgets. The approval process itself slows this down of course, plus there are many other systems and databases used across all company departments which report financial data. What is needed therefore is a robust way to ensure data integrity right across the organisation, which also provides granularity of data to permit later analysis. The finance planning process then looks like this:
With that in mind, we now need to consider the difference between financial models and plans. As we have noted, changing financial models using Excel is usually quite quick. Financial plans are the process to obtain the results required. Now, with sound data and a robust planning process to work from, we have one final piece of the jigsaw to add – what technology to use to deliver the plan. Recognising and accepting the role of technology does depend upon business culture of course, but we are seeing that technology itself is the enabler and it is making very real difference for our customers.
Choosing the Right Technology
Much has been made in the past (significantly by the well-known enterprise vendors) of the functionality of the technology that a company might choose. However, the market has now matured to a level where most of the competing vendors software offerings are pretty much directly comparable to one another. Functionality is no longer a differentiator.
Added to this landscape, is the fact that the market generally has moved away from slow and cumbersome technology implementations delivered on-premise by large and expensive consultant teams, to a more agile and adaptable SaaS/Cloud environment where implementations are typically faster (because the technical infrastructure already exists with the vendor) and do not require large licence purchases, having moved instead to a PAYG subscription model, offering far greater user flexibility.
It is the time taken to execute the solution, rather than the detail of the functionality, that is now the driver of success.
Example of Technology as an Enabler
No one wants – or increasingly – has the time available to learn whole new ways to do the job that they are currently very good at and comfortable with. Learning additional skills is one thing, but throwing them out and starting again is not a sensible way to proceed.
When working smarter, the tools we need extend and improve our skillsets by efficiently providing us with precisely the capabilities we need, when we need them. The short video below provides an insight into what we mean:
Technology, in the form of an integrated financial solution for the Finance Department has become the driver of greater efficiency and insight.
Conclusion
Finance teams are now under increasing pressure to provide critical business insights to steer a successful path through uncertain times. But with limited resources, they are working longer hours to produce the various reports needed and usually have very little time left to them each month to do the really critical task of providing key insights into business performance from analytics.
Although spreadsheets are a vital and embedded part of every finance team, they do have drawbacks when change is required. For example, when a business is forced to change its structure to cope with the prevailing economic situation, very often budgets have to be revisited, submitted once more and go through the entire approval process again. Spreadsheet systems are not good at coping with this situation, and this drives delays and adds to the complexity of process. The answer is to work smarter.
Thankfully, technology is now at a point where this situation can be resolved quickly and at a much lower cost than used to be the case. Gone are the days of huge, lengthy, and costly enterprise-level implementations of cumbersome budgeting, planning, and forecasting solutions. Now, software vendors are focused on delivering cloud-based solutions which are flexible, fast to deploy, and intuitive to use, providing smarter working environments to busy finance departments and freeing up significant time savings as a consequence.
