At a glance
By Rosalyn Page
Like a dose of digital house cleaning, there are good reasons for organisations to regularly evaluate their finance tech stack – but without the right approach, their best efforts may miss the mark.
When it comes to new technology adoption, the key driver is improving operational efficiency, according to CPA Australia’s 2024 Business Technology report.
Here are five tips to help CFOs and finance leaders deliver a significant business dividend from their tech stack and avoid unforeseen risks and costs down the track.
1. Be led by business outcomes
Evaluating the existing finance tech stack against business objectives is the key to delivering efficiencies and ensuring the organisation will thrive. However, too often finance leaders begin with one goal in mind rather than being guided by overarching objectives, according to technological research and consulting firm Gartner.
“Finance leaders often erroneously start technology planning discussions with a technology in mind, say an ERP [enterprise resource planning] or financial planning tool, and then work backwards to figure out what capabilities or functionalities they need from that tool,” says Nisha Bhandare, VP analyst in finance transformation with Gartner.
The firm’s research shows that leading organisations start with a business outcome mindset, then work out what finance capabilities are required to support the outcome. From there, they search for the right technology to support the finance capability.
To start the search, organisations should check whether the latest release of their current software meets their strategic requirements and functionality gaps.
2. Think about security
In reviewing the finance tech stack, security considerations must be at the forefront in today’s environment and that means considering risk exposure, governance policies and how data is treated in the finance systems, advises Saurabh Verma, financial services lead at digital consultancy Avanade.
“Depending on where data is stored, it can increase the vulnerabilities and surface area for attacks, so the aim is to have easier, faster access to data in a more secure manner,” says Verma.
3. Do a gap analysis
The tech stack is the backbone of financial operations, helping support accounting, enterprise resource planning (ERP), business intelligence (BI) and other financial management systems.
A gap analysis of the existing finance tech stack will help identify requirements for new capabilities and areas that need better strategic alignment.
“This is a chance to discover what’s under-performing and where there are capability gaps that need to be addressed,” Bhandare says.
It needs to ensure the finance tech supports business goals, has capabilities to manage increasing data volumes, compliance with data security and cybersecurity requirements, scalability to meet future demands and integration with other systems to enable smooth flow of data across the business.
When considering adopting new systems, Verma says there’s a move toward simplification and the ability to do more with fewer vendors. Businesses should try to avoid over-complicating or over-subscribing on what’s needed when adopting any new systems.
4. Don’t fall for genAI
With vendors pushing innovation like generative AI and machine learning in traditional technologies such as ERP to attract new buyers, it’s important to consider the needs of the organisation and not be sold on the bells and whistles, advises Bhandare.
“With all the hype around AI and ChatGPT, it is tempting to run and buy the latest and greatest technology in the market. But Gartner research shows that finance is heavily under-using its existing technologies,” she says.
With finance tech and genAI, Verma says it’s still early days, but the key is to treat AI as a business opportunity rather than just a tech project to really unlock the value it can deliver to the business.
“Consider it in terms of the businesses’ customers or employees, and how they can augment and support business processes with AI,” he says.
5. Create a roadmap
A roadmap guides implementation and timeframe and needs to consider the upfront cost as well as ongoing costs for subscriptions, support and training, amongst other things.
“Finance leaders need to evaluate their existing vendor product capability and planned roadmap to see if it meets their needs before deciding to look for a new application,” Bhandare says. It’s a way to prioritise initiatives based on business need, urgency, risk, resource availability, impact and potential business disruption.
It’s also important to plan for early success to deliver value in terms of improved processes or new outcomes when developing the roadmap, advises Verma.
“Aim to be able to show that value early, then look to be delivering value releases perhaps every quarter,” he says.
“When looking at custom-developed solutions, the risks and costs need to be carefully considered, because the real risk lies in implementation costs and unknowns later on,” he says.
Instead of implementing a new system and making extensive customisations, finance leaders should aim to drive automation and simplification of business processes that are aligned to standardised systems.
Baking in value outcomes also means forging a strong partnership with any new vendors that is more than just transactional.
“They’ve got to understand what you’re trying to achieve and bring their expertise to it,” says Verma.
