Prompted by a desire to improve the effectiveness and efficiency of their finance functions, a growing number of companies are launching finance transformation efforts and investing in emerging technology tools.
Members of FEI’s Committee on Finance & IT (CFIT) heard presentations during their September meeting about topics including the role of technology in transformation initiatives, robotics process automation, the growing use of analytics in internal and external audit, cloud ERP advantages, and other subjects.
Financial transformation efforts are often viewed primarily as technology projects, but process improvements and people are more important to an initiative’s ultimate success than software tools.
“For technology to work, you have to develop the proper process improvements or it’s not going to work,” said Robert Michlewicz, chief revenue officer for financial reporting software provider Trintech. “We see too many companies saying technology is the answer, but without addressing the process and people components, the transformation effort is not likely to work. Without evaluating process, people and technology, financial transformation is a false strategy.”
Michlewicz cited the common perception that most ERP projects fall short of an organization’s objectives. In many of those instances, Michlewicz said, the company and its technology partners fail to understand the organization’s needs, don’t enhance the underlying processes the ERP was trying to manage, or don’t consider how the organization may evolve during (or soon after) the ERP implementation.
“What we find is that a lot of times when there’s a technology initiative, it’s not taken in conjunction with a financial governance map,” Michlewicz said. “That’s a step a lot of companies miss before they start implementing technology.”
Similarly, the Record to Report (R2R) process has traditionally involved a number of sequential manual processes — journal entries, the financial close, and account reconciliations — that a growing number of organizations hope to streamline and automate.
Michael Ross, executive vice president of product management for Trintech, said more companies are evaluating the potential benefits of robotic process automation to reduce R2R’s reliance on manual processes.
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