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Best Practices

Breaking the Curve: How to Have Better than B- Technology

How to adopt a problem solving mindset when championing organizational technology transformation.

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In FERF's 2019 Technology Priorities survey, financial executives gave their software and systems a B- grade. FERF spoke with Amy Shelly, CFO at the Options Clearing Corporation about championing technology transformation.

FERF: Why do you think companies tolerate a B minus experience in their software and systems?

Amy Shelly: There's a couple of reasons why that would be the case. First, the length of time your current system has been in place will determine how old the configurations are, which in turn factors into the amount of time required to make the appropriate changes to a system. This leads most finance functions to devising workarounds.

Second, not every company invests in the finance function’s technology. Many companies figure that as long as they have a functioning general ledger system and – maybe – budgeting and forecasting systems, that they are okay. At the same time, many financial executives might want to automate their procurement processes – which is part of most ERPs – they may have something else in place. They don’t realize the value of putting those systems in place, which increase efficiency and allow staff to spend more time on value-added tasks – like analyzing data, building relationships with business partners.   

FERF: How can finance executives help others in the company realize the value of having better technology in the finance suite?

Shelly: If you don’t have the technology available, you have to explain “hey, I’d love to provide you with this information. Help me, help you get there.” CFOs have an incredible purview into their entire organization. They can see beyond the numbers and think more strategically. We are the ones that have to ask the next order of questions beyond “how much are you going to spend?” or “how are you going to save me money?” to “what does this process look like?”; “what is it going to buy us in the end?”; and “how are you going to enhance your value to this organization. Once you ask those simple questions, once you take them beyond the numbers – your colleagues start seeing you as a valued partner. When they see you in that light, they are willing to help themselves by helping you.

FERF: What's something you wish your software and systems could do that they currently can't?

Shelly: We were an early adopter of ERP and the cloud. You would think that systems that have been around from on prem perspective and their APIs work very cleanly, talking from system 1 to system 2. For some reason, that doesn’t seem to translate into cloud applications, cloud-to-cloud.

FERF: What are some of the advantages, and I guess other disadvantages, of running your ERP in the cloud?

Shelly: From an advantage standpoint, I'm not paying for servers and system upgrades. My cloud provider is doing all of that for me. Their security is my security. I have the ability to get upgrades and bug fixes more quickly and timely, because it's just pushed through. Versus having it sent to me, having to schedule something with the technology team the supports us to do testing, and upgrades, and implementation. Some of those steps still happen, but it's a lot shorter window.

On the other hand, if there are bug fixes - I'm kind of at the mercy of the vendor. I'm not the largest customer. Even if I'm the loudest customer, I may be a small fix versus their other priorities.

FERF: What was the decision surrounding your system on the cloud? 

Shelly: I didn't purchase the system, but I'm the one that made the 'go, no-go' decision. My predecessor chose the system that we have today. It was fairly simple decision. The ERP we had been working on was probably 20 years old, and a system I'd never even heard of; it couldn't even do the basic functions. I had to trust my staff that had been part of the evaluation and decision making to say, "alright, have you thought of all these things? Have you configured it the way you want to do business going forward?" And say, "alright, if we're comfortable, let's go." The only concern I had was they wanted a January 1, and we are a December 31-year end. When I stepped back, I realized it was not a bad thing. For the first two months, I'm still working in my old system, and the only thing happening in my new system during that time is accounts payable and accounts receivable. That’s it. All the other stuff is still happening in the old system. So that gave us time to be able to flex over appropriately.

FERF: What is more important: purchasing technology for finance, or focusing on training or up-skilling existing employees?

Shelly: It really depends on your situation and the problem you are trying to solve. If you have the right systems in place, then you need to train your staff to utilize it. Other times, it might be a new technology or system that will help you in a better and faster way than trying to train a subject matter expert and doing something manually.

For example, at OCC we have had to implement the new leasing standard. We have less than 100 operating leases to manage and worry about. We could do this on a spreadsheet, but then we would have to put a lot more controls and checks in place. Or, we could spend $10,000 a year for a system to create the journal entries, do the valuations, help with the display. It’s really a cost-benefit analysis. What makes sense for you, given the problem you are trying to solve.

FERF: In what ways can technology be a strategic asset for the finance function? In what ways can technology be a liability for the finance function? How can companies make these liabilities or weaknesses, strengths?

Shelly: If configured correctly, it will supply you with a lot of information that can be targeted to help facilitate decision making – whether it's within the finance function or the enterprise as a whole.

A system is often a liability when it was not configured and implemented based on the problem that you’re trying to solve. In these cases, people weren’t considering “how do I want to work, not only today but moving forward?” Often, systems are configured and implemented based on how it was done last time. So, they programmed, configured, and implemented a bad process. That's where technology is a liability – that’s where the manual work-arounds happen.

Changing these liabilities to assets happens when you spend the time and energy upfront – when it’s like a clean sheet of paper. You look at the problems you are trying to solve, the risks that you have, the controls you need, how you define the process, or really whatever you need to put you in the position to be a better decision maker.

FERF: What are the factors that financial executives should consider when evaluating their current systems and software, when making that decision on whether or not to purchase new or additional systems and software?

Shelly: Again, you really have to start with the problem that you’re trying to solve. Then you go to evaluate the material risks; because there are risks everywhere, so you have to go with what’s most important. Then you work with your technology people to determine how the process should work and help them understand what you want to achieve. They can help you determine if there is something in-house that meets your needs, if there’s something that could meet your needs if you were to add a new module or reconfigure something, or that you need to go out and look for something new and different.