How to make IT work for your finance department in 2010
The past 18 months has been tough for finance chiefs with cost cutting and efficiency the order of the day. But 2010 looks to be more promising, so what technologies should CFOs be looking at to help drive their business forwards next year? Tim Ferguson takes a look.
Business intelligence and analytics
Many businesses have already been through the tough process of cutting costs through drastic measures such as redundancies and investment freezes and 2010 will see CFOs seeking out other areas in which to cut costs.
And to do this, they will need to look at how they can make better use of the data they have at their disposal through business intelligence and analytics tools.
Ovum research director Tim Jennings told silicon.com: "In a lot of cases, the information is there, it's that people just don't make particularly good use of it and I think CFOs generally understand that quite well and see opportunities to mine the information that the business has at its disposal better."
He added that this is about getting better insight into the data and using analytics to be able to predict developments or trends that could impact the business in a positive or negative way. These developments could be predicting new opportunities, customer behaviour and how markets could change.
Gartner senior fellow, Mark Raskino, echoed this, saying CFOs need to focus on more accurate and detailed data collection. He said the low hanging fruits of cost-cutting have already been identified but with the next two to three years also likely to be difficult, other areas need to be identified.
"[CFOs] have to look inside the company again and again in detail to find additional savings. [They have to] analyse the cost base in a lot more detail and you need data for that and you need analytics for that," he said.
Forrester VP of enterprise applications Paul Hamerman agreed that planning and forecasting tools will be increasingly important to CFOs in 2010 as they look to improve their competitive position.
An area related to business intelligence is the monitoring of IT projects and initiatives as they develop - otherwise known as performance management.
CFOs need to make sure they keep tabs on how IT projects are going in order to see if the investment they approve is providing the business with tangible benefits and that projects are being delivered effectively.
Ovum's Jennings said: "It's really the flipside of that analytics and business intelligence insight - use the intelligence and analytics to get the insight and performance management to guide your course of action and report back on whether it's working or not."
However, this doesn't mean they should get too involved in IT projects as that remains very much the CIO's remit. Jennings said: "I don't think it's the CFO's role to be involved in managing IT projects but the CFO should be more involved in the IT project portfolio. I think the CFO has got the financial discipline skills to help the CIO and the rest of the business to bring that discipline."
This approach means CFOs can...
...identify where investment in IT is generating benefits for the business but also where it isn't, meaning resources can be directed to the most useful projects.
Forrester's Hamerman agrees CFOs should become more informed about the progress of technology-driven projects.
He said: "We see the CFO becoming more involved because technology is embedded so much in the business that they are taking more ownership in terms of how the systems are configured, how they're managed, although IT still plays an important role in the data integration and support."
Greater use of collaboration technology is another area that CFO's should look into more during 2010. With the costs of physical meetings now becoming harder to justify, the use of shared workspaces such as SharePoint, videoconferencing and more effective use of email could well become even more prominent next year.
Using this kind of technology will allow CFOs to keep a lid on travel expenses and in many cases make staff more productive as they have to spend less time travelling to meetings in other countries.
Ovum's Jennings said: "It's really how technology can enable changing working practices and working patterns in order to save cost and time."
Greater use of software as a service
The use of software as a service (SaaS) by finance departments is likely to increase in 2010 as the technology becomes more suitable for the finance department.
Forrester's Hamerman told silicon.com: "We haven't seen that much adoption of software as a service to date but we think it's a big trend in terms of how applications are going to be deployed."
With business areas such as HR and sales (CRM) having already embraced SaaS the finance department is likely to follow as more products come onto the market and confidence in the technology increases.
Hamerman said there has been good adoption of NetSuite's ERP system - which includes financial software - while technologies such as the Coda and Salesforce.com-developed FinancialForce.com and wider adoption of SAP's Business ByDesign ERP could also play a role.
Automation and outsourcing of financial processes
Automation of financial processes is another area likely to become more important for CFOs in 2010.
CFOs will be keen to automate tasks such as expense reporting, accounts payable and internal cost controls in order to "streamline these financial processes" according to Hamerman.
As well as automation, processes may also increasingly be outsourced as businesses look to be more efficient.
Hamerman said: "I think there are opportunities within finance to outsource certain compliance-oriented processes whether it be tax processes or some transactional-based processes like disbursement or fixed asset accounting."