Dear Finance Group
That’s right. I am calling you out because I think you’re better than this. I think you can do more. I think you spend too much time running around.
What’s that you say? Your company won’t shell out for the right analytics tools? You’re mired in data work, manual processes, and barely have time to see family? Turns out, I get it. And so do others.
One of the more recent in a string of studies tells us that corporate leaders who skimp on IT for their financial teams get exactly what they pay for – not much.
Just earlier this year, the Association for Financial Professionals surveyed 255 Financial Planning and Analysis staff and found that the more companies spend on technology, the less time their people spend on grunt work. Specifically, companies that spend 10 percent to 20 percent of their budgets on IT systems cut in half the number of FTE days spent performing routine tasks compared to companies that dedicate less than 10 percent of their budget to technology. Further, companies that go above and beyond – 20 to 49 percent of the budget – cut the number of FTE days by more than 80 percent.
Make the Case to Finance
I tell you this because I’d like to help you build a case for better analytics tools, especially if you, like many of your peers, are still using spreadsheets. If you are, don’t be ashamed. Just know that you’re bringing a water pistol to a fight where increasingly more of your peers have machine guns and drones. In fact, per the survey, just 55 percent of respondents claimed they still use spreadsheets to deliver analysis from planning, budgeting and forecasting processes. While that percentage is down a lot from recent years, it’s not down enough. So c’mon people! Let’s get with the times!
There’s no doubt; countless studies spotlight with glaring brightness the benefits of advanced, automated analytics. It’s quite simply the best ROI out there — way less time on menial tasks and way more accurate results. That means handsomely paid financial staff can bear down with their weight on higher-value work. Is that not what we all want? To put those MBAs and other advanced degrees to work?
Tell ‘em to Just Look at the Returns (to Finance)
What if I were to tell you that for every $1 you invest in advance analytics, you’ll get a $3 return? How about a $5 return? A $10 return? Try $13.01. Yeah that’s right, a 13 to one return. That’s according to a study on analytics technology investing by Nucleus Research, a Boston-based research and publishing group.
Part of the reason for the sky-high returns is the simple reduction in labor hours. But the biggest paybacks stem from the quality and accuracy of your outputs. The core improvements to your baseline numbers ripple out across the organization in the form of reliable sales forecasts, optimized campaign spending, optimized inventory levels, better-timed capital investments, and a whole lot more. At the end of the day, we’re talking about more revenue and higher profitability.
Problem is, too many organizations are still unaware that they are scampering around in a bygone era. In finance, for example, where data accuracy is paramount, people are still double and triple checking columns, testing formulas, normalizing data, and emailing and reformatting spreadsheets. This is inefficient and unnecessary.
Perhaps your organization has a sense of prudence about its aversion to IT investing. I would say this is penny wise and pound foolish. They’re forcing not just Finance, but people in Sales and Operations to work overtime, and on overdrive for relatively meager returns. In the end, it’s actually costing your organization more, perhaps 10 times what it seems.
Again, the vast majority of data work such as basic forecast preparation can be automated, error-free and statistically enhanced. And we can take it a lot further than exceptional baseline figures. There’s a couple of advanced modeling and simulation tools out there that with a couple of clicks can run exhaustive what-if tests – examining thousands of possible business scenarios in seconds. Not to mention, the best of these tools also integrate seamlessly with your core systems and scale effortlessly as your company grows. No amount of people or spreadsheet add-ins can do that.
What Risk? The Only Risk is Doing Nothing
Now, I often hear from clients that the IT group has a backlog or a systems compatibility fear. Or that IT is so busy with this and that project that they have no time to dig into new things. While these are often true statements, they are by no means valid reasons for not investing now in enterprise-grade analytics software. Why?
It’s simple. The best and brightest tools are actually cloud-based applications. All you need is a web browser and you’re in. The application can sync with your business systems and processes in days, not months. And the best of the best of the best of these applications also feature super-intuitive user interfaces (UIs) with built-in workflow processes for collaboration, approvals, audit trail, and multi-level security access. Best of all finance folks, you don’t need much of anything from IT. All of the configurability is up to you, no technical expertise required. In some cases, we’re talking about a total self-service environment for the entire finance group. We’ve got you covered in the cloud.
I’ll close now with a quote from a past president: “The price of doing the same old thing is far higher than the price of change.”
He’s right. Don’t be mousy. Don’t cling to the status quo just to avoid change or a conversation with IT. If you don’t make a move, your competitors surely will and snatch your place in the market.