All finance teams want to move beyond tactical tasks to become more strategic players within their organization—and many studies show that CFOs want this as well.
Now while some finance teams have done great work to position themselves as a strategic department, the fact is many remain stuck in the tactical realm: They’re still doing an important job, but they’re also missing out on delivering tremendous value and insights that could shape the future of the organization.
Here we explore a few of the reasons finance teams stay stuck in the tactical world and what they should think about if they’re to cross the chasm and become strategic.
Too many manual processes
Manual processes are without a doubt the number one issue holding finance teams back. For all the talk of digital transformation in finance, many departments still rely heavily on paper, Excel, and cumbersome legacy technology. Until finance teams free themselves of the busy work of the analogue world, they will struggle to shift from a tactical to a truly strategic department
Too many bandwidth issues
The struggles with manual processes are only intensifying as management require finance teams to do more with less. Data from The Hackett Group shows that since the global financial crisis finance teams have faced significant budget and headcount costs. While at the same time the C-Suite is asking them to take on more responsibility and provide more business-focused insights. And although teams are looking to implement technology to solve this bandwidth issue, it’s not happening fast enough.
Too much short-term thinking
As a consequence of their struggles with bandwidth issues, finance teams are at risk of making short-term decisions, especially around technology. This is a big issue: Technology is not meant to be implemented as a short-term bandaid, it’s meant to be a long-term investment that adds value beyond just the finance department. If finance teams don’t implement future-proofed technology that’ll grow with their business, they’ll only end up having to undo it later and find themselves even more behind the curve than they are today.
Too many business silos
When finance doesn’t think holistically about the end-to-end process when they adopt new technology, they reinforce the same business silos they want to break down so badly. If finance can’t see what’s happening in other departments—and other departments can’t see what finance is doing—there’s very little chance of coming together to work towards common outcomes.
Getting to strategic
Depending on where you are on your journey, there may be many issues standing in your way, but the big question is how can you overcome these issues and switch from tactical to strategic? I’ll be honest with you, there is no magic formula. The actions each finance team must take will be different and impacted by legacy technology, in-house skills, business realities, and the like. But there are a handful of best practices that can help finance teams on their journey:
- Stay curious and keep up to date with the latest technologies impacting finance
- Take time out to talk to other departments to understand what’s happening and where finance can add value
- Invest in technology for the long-term and not just as a short-term bandaid
- Hire a digital specialist to project manage your transformation
- Run small scale pilots to test the impact of technology before you scale
- Build a culture with digital transformation at its heart
Time to take action
With the intensified focus on finance in all enterprises and the continued momentum behind FinTech, finance teams have never had a better opportunity to leave the tactical world behind and become strategic organizations. It’s time to get out there and overcome the challenges holding you back. We know you can do it and we’ve got your back.
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