Grading Financial Technology Vendors

The Financial Education and Research Foundation (FERF) surveyed 150 Financial Executives International (FEI) members – all senior-level financial executives – to discover their satisfaction with  technology vendors and how they would grade them. Surprisingly, although financial executives spend billions a year on accounting, enterprise resource planning (ERP) and compliance systems, there were no easy A’s.
Below are results of the survey and interviews with senior-level executives regarding their perception of  financial technology.
Complacency Cost
Why do senior-level executive tolerate a “B” or “B- “experience with their software and systems?  

When speaking to FEI members the consensus tells us that is has less to with the disappointment with vendors and more to do with internal constraints. This includes a combination of the burden of legacy systems, myopia when it comes to leveraging data and a strong embrace of the status quo in the finance suite.
The short answer is: Often it’s us, not them.
“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 devising workarounds,” says Amy C. Shelly, Senior Vice President and Chief Financial Officer at Options Clearing Corporation.
Shelly adds that since investment in the finance function’s technology is often constrained, it’s easier to be complacent about the current state of tech systems.
“Many companies figure that as long as they have a functioning general ledger system and – maybe – budgeting and forecasting systems, that they are okay,” she explains.  “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.”
The “good enough” mentality within resource constrained finance suites  often leads to years, sometime decades, of stasis and missed upgrades within finance systems. And if enough time goes by the missed opportunity cost coupled with the real upgrade cost can rise exponentially.   
“We’ve using the same [ERP] system for around 13 years. Unfortunately, we have let ours get behind, so we’re in the process of determining whether to upgrade or replace,” says a FEI member and financial executive at small wholesale distributor. “As of today, I am not happy, but it’s primarily due to the fact that we’ve allowed the software to fall behind and as a result we don’t currently have access to some of the current functionality available in today’s ERP systems.”
Most financial leaders that find themselves in this position are aware that they have let time and technology pass them by, especially the shift to on premises systems to software-as-service (SaaS) models. So, when they are ready to take the plunge into a new technology paradigm the shift is often filled with doubts and resource roadblocks.
“It’s human nature, budgets, and everything else means that people probably aren’t happy with their technology, because they have failed to embrace newer, proven technologies,” says the same small company FEI member. “I’m guilty of this, I didn’t embrace the SaaS model sooner. We have an in-house system, but since we didn’t stay current with upgrades, we don’t have some of the latest and greatest tools available in current ERP systems.  There are things that I want to be able to do that I can’t get out of my system because of our failure to keep the software up to date.”
Taking a Look at the Whole Technology Challenge
Even though resource constraints can challenge financial executives, that does not mean a holistic approach can’t overcome those challenges.
“When finance people look for software solutions, they tend to look in isolation to solve a specific problem without understanding the context of how that solution fits into the larger architecture,” says Melissa Thering, head of financial digital transformation at Cargill, Inc. “Finance also does not always consider what is it going to feel like as a user to actually interact with these tools.”

“One of the things that we're doing in Cargill is making a very concerted effort to understand what the user experience is across different applications. You need to really take a step back and look at the total technology landscape and how is it going to be interacted with by the users,” she adds.
Thering explains that her organization’s digital journey is based on “five pillars”:
  • Build a Master Data Backbone: “Developing solid, foundational master data that we use within our finance function.”
  • Develop a Data Analytics Strategy: “How are we governing and owning data? Then, how are we allowing or enabling data analytics to unlock the value for our businesses?”
  • Focus on User Experience: “Measuring the way users interact with the system we have implemented and the processes that we have adopted is critical step in the journey.”
  • Push Process Automation: “This means standardizing processes to make them as efficient as possible. We are always asking ourselves can we automate to enable our processes to get to the top quartile. We are exploring things like RPA to drive and increase our efficiency.
  • Wrap It Within a Solid, Cohesive Technology Architecture: “When we started our digital journey few years ago, we had over 140 application uses just within finance and many of those were redundant. Our target architecture has around 30 applications within the finance platform. It's a significant push, and it comes from multiple different angles that will enable finance as a function to be most efficient and effective.”
Thering adds that her efforts around shared services is being driven by a Cargill-wide initiative that looks at how business can best leverage its operating model of how to “get work done.”
“We are in 60 plus countries and have 61 businesses around the world, so it's a very large company.  Just a handful of years ago we were structured in a way where finance existed in all of those countries and in most of those businesses,” she says. “Finance became very localized and tailored to a very, very small parts of the company. We believe that we can do things better and faster and that we can be in the top quartile of finance in efficiency. That’s our goal.”