From Malcolm Faulkner, Senior Director Product Marketing EPM, SAP
In the opening blog for this series, Technology Imperative for Financial Planning and Analysis, I will address two points that apply to most companies:
1. Thinking they are behind the technology wave and
2. Dealing with more fundamental issues
Addressing the fundamentals is top priority within Finance
The simple fact is that despite the plethora of stories about emerging software technologies and applications most companies are dealing with more fundamental problems that need to be addressed in order to survive and thrive, regardless of the technology employed.
Shaping the Finance Function of Tomorrow: 2013, a CFO Research study* sponsored by SAP, noted though that many analysts and vendors tout the latest trends and advancements in technology. It’s their job to do so. The CFO study also reported that “to fully take advantage of these innovations, finance executives will need to understand them better”. Respondents were equally split on how well they do or do not understand uses for big data (48% saying they get it and an equal 48% wanting to increase their understanding). Comprehension of cloud computing and mobile technology is becoming more within finance executives grasp.
But you could be forgiven in thinking that everyone is embracing the wave of technology now and that if you are not you are way behind. This is simply not the case. Innovators and early adopters make up 16% of the bell curve. That said the new technologies of cloud, in-memory columnar databases, mobile apps, predictive analytics are mature and production ready.
The reality is most companies struggle more with fundamental issues involving fixing broken processes and making them more efficient. Finance executives, it would appear from the above noted study, are a pragmatic bunch with the largest group (46%) recognizing better integration of existing information systems as most important for improving their ability to deliver services effectively.
Many organizations are simply nowhere near ready for new technology, like predictive analytics, regardless of how compelling it may sound.
Let me provide a couple of anecdotal examples
- In the late 1990’s, I taught Visual Basic (a popular language for bespoke applications at the time) programming courses. Some of the students programmed in COBOL, a language developed in the 1960s. So there I was thinking this is really great because all these COBOL applications would need to be replaced with Visual Basic apps. Now, I suspect many are still in use in what we call legacy apps.
- I once proposed a mash-up solution to a craft brewery that utilized GIS, BI, CRM , social media and point-of-sale data to provide a sales management solution to track and chart sales on maps, among other things. Brewers in the US struggle to get good POS data because the distributors own the sales data and not them (a legacy of Prohibition laws). This is compounded since many of these distributors are small outfits who still use paper based fax machines.