by Joan Warner
Recapturing the value lost when employees do redundant work, or when rote manual chores consume unnecessary time, is among the fastest routes to better corporate performance. That’s why our new study, “How Finance Leadership Pays Off,” emphasizes automation-enhanced efficiency as one of six key traits of Finance Leaders. Leaders are organizations where the finance function:
- Drives strategic growth initiatives
- Has strong influence beyond the finance function
- Collaborates regularly with other business units
- Is very effective at core finance processes
- Works closely with GRC and is well equipped to handle regulatory change
- Improves efficiency with automation
Oxford Economics and SAP surveyed 1,500 CFOs and other finance executives across four global regions and multiple industry sectors during March and April 2017. Only a select 11.5% of respondents qualified as Finance Leaders. Furthermore, we found a clear correlation between efficiency and faster revenue growth.
Overall, nearly three-quarters of respondents—73%—agree that automation is improving the finance function’s efficiency at their company, giving executives more bandwidth for value-added tasks. Our results suggest the rest are sacrificing performance. Respondents whose companies saw revenues rise by 5.1–10% over the past year are twice as likely as slower-growing companies to strongly agree that automation is improving their finance function’s efficiency.
The responses of these fast-growing companies highlight the importance of automation in a strategically focused, value-driven finance function. “There’s a huge upside,” says Tony Klimas, partner and global finance practice leader at EY. “People can get their back office running more smoothly than ever, which allows them to turn their attention to more interesting topics, like ‘How do we have better insights? How do we help solve business problems?’ and other strategic issues.”
Efficiency is about more than cutting costs. It’s about freeing resources—whether personnel or cash—and investing them for long-term growth. When companies find the best tools to enhance efficiency, both within and outside the finance function, the whole organization wins.
With all these benefits, what keeps finance executives from enhancing their function’s efficiency? According to our survey respondents, the biggest obstacle is the difficulty of updating technology without disrupting daily operations. Insufficient workforce skills, lack of budget, and incompatible systems are all closely tied for second place.
Yet despite these roadblocks, 91% of our survey respondents say technology will be important to streamlining the finance function over the next three years. Among Finance Leaders, it is nearly unanimous: 98% agree. Clearly, flexible tools that minimize business interruptions while enhancing efficiency can get companies on the fast track to better performance.
Click here to read the full study.
Joanie Warner is the Thought Leadership team’s Managing Editor for financial services.