According to a recent Adaptive Insights survey, only 17% of a finance team’s time is dedicated to strategic activities. FEI Daily spoke with Adaptive Insights founder and Chairman Rob Hull about how CFOs plan to shift focus and handle the technology hurdle of data integration.
FEI Daily: A common goal of many CFOs is to dedicate more time to strategic activities. What do you think is preventing them and their teams from focusing on the right tasks, and how do they plan to fix it?
Rob Hull: The biggest problem is not a lack of desire or ambition, but inefficient processes. It’s not just the process, but the tools. The two biggest areas that we see are the planning process and the reporting process. Each of those processes tends to get bogged down with very manual steps that almost inevitably end up using Microsoft Excel as the key planning application or the key reporting application. Essentially, they spend time working around the shortcomings of Excel as a business application and not just a personal productivity tool.
When it comes to reporting, what ends up happening is twofold. One, they spend a lot of time trying to gather the right data to get it into Excel, then they end up having to validate and verify that it’s accurate. Then they spend a bunch of time trying to format it. They end up not taking enough time to improve the tools they’re using in the planning and reporting processes, and so they’re just bogged down by spending time trying to manage those tools. Gathering data, writing reports, editing, validating it, disseminating it.
Download our CFO Indicator Report Q3 2015: “Strategic CFOs Break Down Silos to Harness the Power of Data”
Then on the planning side there’s a very similar issue. It’s hard to gather data, it’s hard to consolidate data accurately, and so all of the time ends up being spent on process and not in analysis of the results of that process.
FEI Daily: Data integration was identified as the biggest technology hurdle for CFOs. Why is that, and how do they plan to face the challenge?
Hull: It’s a hurdle because it’s a very manual and error-prone process. If you’re manually exporting data from multiple different sources or trying to gather it together from multiple different sources and then validate that you have the accurate information, that’s time-consuming and it’s an inefficient process. What are they doing to try to address that? They’re trying to automate the gathering of data. They’re trying to automate the creation of a single source of truth: one data source that they can go to, to report against that has already gathered information from multiple other operational data sources and financial data sources all in one place.
If they can automate that process, create the single source of truth without having human touch involved as much, it cuts down on processing time and on the work that their teams have to do. It cuts down on the validation time. It’s been automated and the logic behind it has been baked into what’s been done, and ultimately it frees up their staff to not spend time trying to gather data, but actually be able to analyze the information that is at their fingertips.
FEI Daily: Sixty eight percent of CFOs expect a continued rise in report volumes. What do CFOs need to do to focus on the weaknesses of their current reporting platforms and increase efficiency?
Hull: There are a couple of things going on there. There is so much more data available to organizations today, and as a result, people are expecting to get more information at their fingertips. There’s a constant increase of, “Hey, I know there’s more information, I need more reports to help me get access to that.” That rise continues.
The other issue is with all of that data, one of their problems is creating a single source of truth to create all of the reporting from one place. And can they do that effectively and efficiently? They’re trying to respond to requests for more information they’ve not yet found a way to do that very efficiently today.
FEI Daily: What surprised you most about the survey findings? What did not surprise you?
Hull: It’s surprising that people are still struggling when there are good solutions out there from data aggregation and data integration capabilities to better automated reporting capabilities to improved, integrated planning and reporting capabilities. All of that can be so much more efficient, and yet it would appear that the people are just simply not quite getting there.
One of the things we were talking about as we were going through some of this was it doesn’t feel like finance teams have quite yet caught up to the pace of business today. Business is changing so quickly and when they’re bogged down in this reporting process, I think it’s very hard for them to keep pace with business. Getting reports out in a timely fashion becomes challenging, or getting reports out as frequently as they’d like to get them out becomes challenging and having holistic views of the business becomes very challenging. We hope to see people begin to embrace some of the technology that’s out there to help them.
FEI Daily: What’s a growing trend you’re hearing about when speaking with financial professionals?
Hull: One of the things that we hear a lot that finance teams would like to see is more self-service capability within their organization so that the burden isn’t all on the finance team. To actually help with, in particular, some of the ad hoc report requests that they get on an ongoing basis from their operational team.
I think what’s implicit in some of this is that finance teams have not yet figured out how to help enable a more self-service reporting mechanism within their businesses, which would relieve them of some of the burden.
Rob Hull is founder and chairman of Adaptive Insights.
This article originally appeared in FEI Daily.
Our CFO Indicator Q3 2017 survey explores CFOs’ confidence relative to data and technology, as well as their progress in moving toward a “single source of truth” (single source of financial and operational data). Results reveal that Finance has successfully cleared what we believe to be one of the most significant hurdles—their hesitancy to store data in the cloud. Read our other CFO Indicator reports here.