Think technology is taking the human factor out of finance? Think again. When finance embraces technologies, it only becomes a better business partner. Finance organizations that rank higher on a technology enablement scale have more effective relationships with their business counterparts.
The Hackett Group took its extensive benchmarking data, which splits organizations into world-class and peers, and ran the data through a proprietary model that defined which finance organizations are more technology-savvy based on a set of “markers.” (World-class organizations are in the top quartile based on comprehensive effectiveness and efficiency metrics.) Next, we profiled those companies to see what other qualities they have in common.
We found that tech-savvy finance organizations are better business partners:
- Their analysts have higher business acumen compared to peers—13% higher and within 0.01% of world-class finance teams. That’s because they have more time to learn about the businesses they serve. They can find out what makes them tick, who are their competitors and how they go to market. Consequently, they can then lead more productive conversations with operational management and build stronger ties.
- They are 28% more likely to use both financial and operational KPIs than peers when analyzing the performance of the company, providing a bridge the business and financial management and connecting the dots between business choices and financial outcomes.
- Finally, tech-savvy finance organizations spend more time on proactive decision-making and planning rather than historical reporting. This way they can provide their business counterparts with the insight they need to make forward-looking, smart business decisions.
Source: The Hackett Group Benchmarks 2017
Why is this important?
Digital transformation is changing the very nature of the business environment. The onus is on finance to up its game and help the enterprise keep pace with the fast-changing business environment. That means working closely with business leaders by understanding their operations inside-out, and giving them insightful answers that can help them steer their areas in the right direction.
Tech-savvy finance organizations have the tools to do both. They can free up the time of finance executives to build collaborative relationships with their partners. They can develop strong business acumen. And they have the integrated system environment to supports the adoption of digital tools that drive new solutions like Big Data and advanced analytics. Ultimately, our research proves that companies that rank high on the tech enablement scale are far ahead of peers in closing the performance gap with world-class finance organizations.
For more on how technology is influencing the future of finance, see Jobs Of The Future: The Collaborative Financial Officer.