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From number-cruncher to forward-thinker: How technology can change the role of the finance director

From automating processes to tapping into fintech, 15 finance directors shared their experience using technology to free up their time for strategic planning at the FD Surgery London.
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Gone are the days when finance directors were written off as “number crunchers” in business. Today’s entrepreneurial FD wears many hats, taking care of human resources, IT requirements, planning for growth and overseeing compliance. The role of the FD is increasingly that of a key business partner.

According to a number of FDs we spoke to on the subject, it all comes down to leveraging data and providing analysis on every aspect of the business from products and inventories to customers and employees.

At a round table sponsored by Soldo, the London based fintech tackling the problem of business spending at the FD Surgery London, we explored the role of technology in driving this change, from new-generation finance technology to cloud-based business tools.

In the interest of being completely candid and free in sharing their experiences, the finance directors at the round table asked to remain anonymous.

Open banking and PSD2 have provided fintechs with the freedom to disrupt traditional businesses,” said Soldo’s head of content and communications, Julia Robertson. “Now is the opportune time for businesses to take advantage of fintech providers whose presence is ruffling the feathers of antiquated traditional banking systems.

“Fintech offers opportunities for companies to use new technology and shred hours that are currently reserved for managing spend, a concept business financial services are yet to master. This opens huge potential to streamline the systems that presently lead to significant levels of wasted money.”

FDs increasingly manage IT functions

Most of the finance directors who participated in the round table were quick to mention that IT in any small or medium business always seems to sit within finance.

“We used to have a discussion group, called the ‘reluctant IT directors’ forum. They were all FDs who found themselves responsible for IT,” according to an FD of a well-known London-based online furniture store. “It’s massively important in our business, and not just from a customer-facing point of view, because most of what we do is e-commerce. 60% of our revenue comes from our website.”

There was a general agreement that larger, more established companies typically have the greatest challenge. They’re weighed down by legacy systems and mindsets, unlike startups that can be agile. However, regulation and compliance requirements can be a huge pain-point.

“If you haven’t got the infrastructure, sooner or later it’s all just going to implode,” one FD said. “We did invest in infrastructure, and it was hugely painful. We talk about being a disruptive business but putting in an ERP system is the most disruptive thing we’ve ever done internally in our business. And it nearly killed us.”

Why? According to that FD, who heads up a leading online retail brand, part of it boils down to changing the way teams work and getting that employee buy-in for a truly digital transformation. It’s also partly because people don’t know how to use systems. 

Analytics tools allow for data-driven decision-making

For another FD at the table, technology is a decision-making godsend. Advanced analytical tools are crucial for one FD at a digital marketing agency. These tools provide real-time business information for quick decision-making. “Some of the tools we’ve invested in show us where the best opportunities for growth lie and areas we need to cut back,” she said.

FDs shouldn’t be worrying if the numbers are right. They should be spending time discussing what the numbers mean.

Technology can also help the finance directors up their game when it comes to using business data. Automating core processes and transactions frees up time to concentrate on strategic business performance. Reporting tools are also a huge hit among the FDs at the round table, who unanimously use automated reporting tools on a monthly basis.

One of the biggest challenges facing finance teams is ensuring they are working in the most efficient way. FDs need to identify the activities which are important and rationalise workloads, enabling finance teams to spend more time on analytics and innovation. It was suggested by some of the group that their organisations aim to spend 10% to 20% of their time on identifying opportunities and ways to innovate and better perform in their roles.

Idiot-proofing business tools: The skills gap is palpable

The group discussed the skill-set needed to develop future FDs. Financial fundamentals and rational thinking are a must, but digital skills can make or break an FD. In fact, they were in agreement that digital literacy is crucial for everyone in the business. 

“The success of anything we do; whether it’s integrating systems or automating processes, all depends on how people use the technology.” 

“It frustrates me massively, because you think that people are turning up to work without the basic skills they need. I’m talking about computer skills that every day parts of the business,” said one FD at an engineering firm. “Some people say the system doesn’t work well enough. It’s not easy enough for those people to use. Maybe that’s true, but I will also say those people don’t have the skills to learn those systems. Maybe it’s because they haven’t come out of the education system with those skills or as their employers, we’re not giving them those skills.”

Controversially, an FD of a digital marketing agency said part of it was people not using common sense. “Realistically, the IT system should have warnings when someone’s doing something stupid,” she said. “You need to automate all of your business tools to make it idiot-proof all the way through!”

“Idiot-proofing” can have unintended consequences, however. One FD in a financial services firm tried “dumbing down” his ERP system and it caused a huge issue. “We made some changes when we put our ERP system in. We dumbed down certain things to try and make it idiot-proof, but we had gone too far. It’s dumbed down to such a degree that people don’t need to know what else is going on in the background.”

“All they know is ‘I need to press that button. That gives me the list of things that I need to see or need to do’. But they don’t see all the other things that are happening in the business. That just adds to the skills gap.”

Training and encouraging a culture of proactivity may be the solution

The general agreement seemed to be that investing in technology isn’t enough. “It’s quite hard to use technology to get around some of the human failures we see in our business,” said one FD who works at a beverage association. “People aren’t prepared to read things properly. You can have the best system, but it won’t be effective if people don’t use it properly.”

“In my business, we need people to fill in time sheets. At the moment, they do it in Excel. They keep saying they’d do it more regularly if they had an app. Even if you have an app, you’ve still got to put those numbers in.”

For most of the FDs in the room, the slow rate of technology adoption indicates a failing in their business for not having trained teams appropriately.

“If you have obsolete staff who can’t keep up with new technologies, you’re going to fail,” said an FD of a business consultancy. “I’m hungry for any technology that can make things easier, but even when you introduce the best product on the market, which is apparently the easiest, if people aren’t adopting, it’s time to look at the culture and think, what can we do to change that?”

But who has the responsibility to change that culture? “No one likes change, and in our business, we’re agile and quick to adapt, but even so, we see blocks in adopting new processes,” adds an FD from an online furniture retailer. 

“For us, the biggest issue is it’s not the technology, it’s the people. And it’s cultural.” 

“I think it surprises me that even though it’s 2018, it’s England, people are still so technophobic! In a tech company! As soon as you put anything on the computer, they’re scared that if they press a button, something’s gonna break.”

Forget BYOD, bring-your-own-tools is the real problem

It’s one thing when employees use their personal devices to log in to work accounts. But for the FDs at our round table, the biggest annoyance is when they use personal cloud tools for work.

“If there’s one piece of technology I could get rid of it’s Google Apps. I’d take it out to a field somewhere and fight it. I hate it so much,” said the online furniture retailer.

“There’s a whole bunch of people in our organisation that think that using Google Sheets and Google Docs is the way to go. A part of me doesn’t like it because from an IT management point of view, I haven’t got any control over it.” 

The question of who owns that document or data arises as well. “It doesn’t sit within our organisation. So when you come back to GDPR, who’s putting what in Google Docs and where is it? Who’s got a link and who owns it?”

Another FD believes these online tools are holding up business siloes. “You try and build an infrastructure for the business for everybody to use. It’s supposed to be a safe and secure and accessible place for all of your corporate documents to encourage collaboration and inter-team work. And then you have a whole load of people that go and create something from Google Docs and then they share it with whoever they think is appropriate. It’s a nightmare!”

When it comes to managing sensitive information, the risk is maximised when people leave companies and understandably take their personal Google accounts with them.  

“We have had one example of somebody who left and then all of a sudden, the spreadsheet, or document, that they owned is no longer accessible for anybody. It’s not just ‘bring your own device’, but you can bring your own applications and infrastructure to work. I’d like to get rid of it.”

The group discussed cyber security as a growing concern. In light of all of the high number of  corporate data breaches making the headlines, the FDs believe protecting customer data and the company’s own data is critical to avoid reputational risks. This isn’t easy when company data may be floating around on various cloud apps.

What about disruptive tech?

The group touched on the potential impact of ‘disruptive’ technologies on the role of the finance director. Should automation be considered disruptive anymore? How will artificial intelligence and machine learning figure into the finance function? The general consensus was that these technologies are already having an important impact in the sector. The Big Four are automating as much as possible; major IT companies are investing massively in AI, and London is growing as a fintech capital. Looking forward, speech recognition software will also be a key disruptive technology.

There may be a conflict between IT and finance roles if managing and implementing these technologies becomes the industry norm. 

Enhancing communication through technology

Additionally, the group unanimously voiced concerns over finance teams feeling left out of the rest of the business. “Finance can sometimes be seen as separate from the business,” says an FD of an engineering consultancy. “Commercial teams and engineers don’t necessarily see our strategic value. This is where technology can help our teams. We’ve been staying connected over messaging systems like Slack or Yammer and it has been great for us.”

FDs feel the pressure to break these business silos and to be perceived by the rest of the business as trusted partners. “There’s definitely room for improvement in the way the finance function is perceived,” said one FD in a 400-employee-strong multinational consultancy. “This will require us as FDs to broaden our skill-set. We can’t be seen as just number-crunchers anymore.” 

The group concluded that FDs need to take the lead in changing this perception, mixing commercial savvy with analytical skills, which can be amplified through training and collaboration. When it comes to technology, tools that free up finance and accounting teams from the need to chase down receipts and reconcile spending can add the most value, including strategically implementing money saving processes and changes that go beyond the pre-internet 4.0 accounting job description.

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About Author

Praseeda Nair

Praseeda Nair is the editorial director of Real Business, and its sister publication for micro businesses, Business Advice. She's an impassioned advocate for women in leadership, and likes to write about management strategies, entrepreneurs, growth companies, and diversity and inclusion.

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