It’s 2024, we are surrounded by magical AI that can converse like humans, electric cars that can (almost) drive themselves, and wars being fought with kamikaze drones. And yet CFOs and finance teams still think their fintech stacks are falling short.

This year’s Chartered Accountants Australia and New Zealand Technology Research report shows the gap between technology and implementation. While the number of quality tools for finance teams has exploded, dissatisfaction with fintech remains stubbornly high.

Key findings showed that, despite the boom in cloud-based software over the past 15 years, CFOs are still struggling to find the right tools to run their finance operations. Nearly half of the 284 respondents were unsatisfied with their current financial technology solutions. And one in four organisations don’t have a strategy in place when it comes to prioritising financial tech investments.

A third of respondents stated their demand planning system did not meet their needs at all, and 28% admitted their cash forecasting system did not meet their needs.

How can CFOs close these gaps and improve the operation of the finance function?

The human factor

Collaboration is the secret to building an app stack that helps the finance team deliver, says Sheila Lines CA, CFO of Nick Scali Limited. CFOs need to work well with the IT leadership team and make sure the business doesn’t expect software alone to bring about the desired change.

“Sometimes technology people can fall into the trap of thinking that behaviours will change with technology. They don’t,” Lines says. “People typically don’t change to systems, it takes a lot more organisational effort than just providing the tool.

“As well as providing the financial support and business case, the CFO can also lean in and make sure the project is set up correctly.”

A CFO can filter out overenthusiasm from the IT department and ensure that the IT project has a robust budget, a tight, realistic timeline and sufficient preparation in training staff. Without this oversight, financial software projects can underdeliver. The IT team is left exasperated with business users who fail to use the software properly. But the fault may be with the IT team for failing to consult or understand operational issues, Lines says. This turns an implementation into an exercise of frustration.

“I’ve seen it a number of times over the years, where people get a presentation on the tool from the supplier and they think, ‘That’s fantastic, that will change our business’,” Lines says. “Yes, it may, but it won’t change your business, unless you get people on the frontline involved who can help implement the system correctly for your processes.”

Fortunately, more organisations appear to understand the importance of change management to successful implementations. From the survey, 85% of respondents said their company provided on-the-job training when adopting financial technologies and 41% received formal training programs.

The top tactic for overcoming resistance to technology changes included clearly communicating benefits (77%), pilot testing and feedback loops (65%) and involving end users in decision making (57%).

 

Integration, the endless quest

Companies run on numbers. But getting those numbers is as difficult as ever. Just 7% of respondents said they had an all-in-one platform as their financial tech stack. The other 93% juggled a combination of budget and forecasting, CRM, analytics, human resource information system (HRIS) or financial planning and analysis (FP&A) software on top of the company’s ERP.

And this is after the majority (69%) of those organisations have made the move to cloud-based systems. Clearly, the advantage of specialised tools still outweighs the convenience of a single system for managing finance.

Often the system of record will be a highly specialised database customised for the industry.

Full integration between an organisation’s financial system and other business systems is still relatively rare (10% of respondents). Most finance teams have to deal with partial or limited integration (40% and 34% respectively). Only 16% of respondents reported no integration between their financial system of record and the rest of the technology stack.

The act of upgrading reporting can not only improve the flow of information, it can even change the culture of the business, says Michelle Symeonidis, Tahbilk Group CFO.

The change to a data-driven culture has had a transformative effect on the lives of the finance team, too. By automating reporting, a CFO can step back from grappling with raw data and analyse patterns and provide strategic advice to the leadership team.

 

“When you’re looking at figures to create a report you can get lost in the detail. You don’t see the wood for the trees. But when the information is provided, the questions pop out straight away,” Symeonidis says.

“The good news is that data-based decision making in finance teams has become the standard, according to the survey. More than 40% of respondents said they were extremely or very data-driven in their decision making. Another 38% said they were moderately data driven.

 

 

Specialisation drives complexity

Heterogenous app stacks usually give you greater flexibility and access to the latest features over a more generic, one-stop enterprise resource planning (ERP). However, these towering app stacks come at a steep cost; the need to corral data from multiple sources and herd it into a usable report.

Most companies are dealing with this by automating the data integration (47%), while 20% have built their own custom middleware. These two approaches translated to less time on data problems than the third of respondents forced to employ manual data entry.

But despite the effort spent on automations and custom software, a staggering 69% of all respondents said the main challenge to data accuracy and consistency was human error.

Other challenges reflected the complexities of large app stacks – incompatible systems (45%), data silos (43%), and data migration issues (35%).

 

Amazingly, a quarter of respondents still suffered at least five-to-10 hours of downtime per week due to data problems.

Those that had made the move from server-based systems to newer, cloud-based software showed a higher level of satisfaction. However, some industries had fared better than others. CAs working in health care and social assistance, and information, media and telecommunications, were more likely to be strongly dissatisfied (60%) than those in construction, transport and storage (40%).

Despite the pain of changing systems, the results are worth it. “Technology has enabled speed to information. That’s really changed significantly,” says Jaco Jonker, CFO of B2B marketplace Hipages Group.

The broad spread of dashboards, analytics and forecasting tools has helped CFOs make much better, more informed and quicker decisions. “And it gives us a much better view on the major metrics and enables us to keep a pulse on the business, and to be across multiple functions more easily,” he adds.

One of the key requirements of a CFO is to enhance operational efficiency through process automation, Jonker says. The reality is that one in four organisations still does not have a clear strategy in prioritising financial tech investments.

CFOs and financial controllers should be across emerging technologies, but they also need to encourage more junior accountants to identify opportunities and products, Jonkers says. This requires the CFO to create an environment where the finance team feels safe, encouraged and inspired to come up with ideas and drive process improvement.

“It is a great opportunity for financial controllers and financial managers to be empowered to explore technology solutions, learn what other businesses are using and bring that to the table,” says Jonker.

The most likely areas for improvement are likely to be in demand planning and cash forecasting. These two technologies were the most challenging for respondents, followed by financial modelling.

CAs may still be dissatisfied with fintech, but it’s clear that rising expectations could explain this, more than failings in technology. The shift to data-driven decision making shows how far businesses have come. The fact that most of that reporting still happens in spreadsheets shows how far it still has to go.

 

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The business benefits of better reporting

CFOs can fight for years with their system of record to extract better reporting. Sometimes it’s smarter and easier to leave it alone and use another tool altogether.

As CFO of the Tahbilk Group, Michelle Symeonidis uses a powerful enterprise resource planning (ERP) to manage operations for the company. Ezy Systems software is custom built for vineyards and tracks the quantity and variety of grapes through to the production of bottled wine.

“It was actually very forward thinking 20 years ago and all the data is there,” Symeonidis says.

The number of wine-related inputs still made it a very valuable database. However, the ERP is terrible at producing usable reports, with formatting errors very common.

The reporting process consisted of printing out stacks of PDFs and handing the raw data to the business managers. They then had to work out what the numbers meant and decide how it should guide their decisions.

Symeonidis turned to a business intelligence tool, Phocas, to extract the data from the PDFs and create interactive, drillable dashboards. Rather than a single list of numbers from one area of the business, Phocas creates multi-dimensional reports that can draw on sales, stock and purchasing data simultaneously. “It actually creates far better conversations and far better ways of making decisions,” Symeonidis says.

Now, managers can view the data in a report by any number of metrics. They can group wine by quantity and split it into dozens or six packs, or convert it to litres. They can look at quantity and sales value side-by-side and break it down by product group, customer group, or sales rep.

“We can look at a particular product [wine] and ask, ‘How many of those have we sold over the rolling 12 months? How many tonnes of grapes will we need for that product?’,” Symeonidis says.

If the winery has too many grapes left over, it can either sell them to another producer, blend them into another one of its products, or consider developing a brand new product.

Better reporting has a highly tangible impact on the speed of doing business. Business managers are no longer scared of looking at an impenetrable mass of data.

“Instead of the salespeople waiting for the next month to find out what their sales figures are, they are looking at them every day,” says Symeonidis.

“That drive for them is amazing. We now have a proactive salesforce that knows where the figures are, where they have to focus and what they need to do to achieve their budgets.”