As the crisis continues, I thought I would write something that provides a bit of light relief and looks to the future, for when we start to think again about buying new software to help transform the Finance Team.
I have been involved in software technology in and around the Finance Team for over 20 years. During this time I have been on both sides of the fence; as a customer and as a vendor of software and related services. The software selection process is one that has engendered a range of emotions, from hysteria to frustration, from despair to elation!
As Head of Research at GenCFO, I now have a fantastic opportunity to help guide others who are (or thinking of) embarking on a selection process. The objective of this article is to give you some food for thought to guide you on your way.
There are a number of points to cover so this article is split into two parts:
Part 1 – we give some background and what to do before you start the process.
Part 2 – some key considerations for the process itself.
Before we get into the detail, it is worth looking at two key points:
The software market has changed
Organisations tend to keep (finance) software for an average of 5 years. Given the recent pace of change, this is a lifetime when it comes to technology. If we go back a handful of years, there were fewer solutions on the market and the finance software space was dominated by the large players; offerings from the likes of IBM (or Frango as it was), Oracle/Hyperion, SAP, Comshare etc. Due to slower development and release cycles, functional change in software happened slowly. A consequence was that legacy products tended to have a differential level of functionality.
In recent years, the change in the technology landscape has lowered the barriers to entry to the market and enabled several vendors to become competitive, if not market leaders. Many are on the back of newly developed solutions that leverage cloud technology and related agile design principles. These products are undergoing continual development and update (such is the world of cloud) and, in respect of core functionality, have diverged in terms of functionality. If you were to take planning as an example, there are over a dozen solutions that deliver, what I would consider, a best-practice planning process.
We only use limited features and functions
As a result of the factors above, software solutions now come with a substantial depth of functionality. There is empirical evidence to show that only a limited number of software features are used frequently (20% has been mentioned), with most used infrequently (circa 30%). This means that most organisations use less than half of the features and functions available in their technology solution. The amount of functionality is only likely to increase in the future as more complex features are added to deal with customer and market demands. A great example of this is the integration of AI (specifically predictive analytics) into reporting and planning software.
In my view, this is good and bad news for the user. The good news is that you are getting more ‘bang for your buck’ and it also encourages you to continually assess and evolve (using the new functionality on offer) – a fundamental concept of transformation. This hopefully changes the current mindset where an organisation often implements a solution and ignores subsequent ‘new features’. The bad news is that this can complicate the selection process as this gives another aspect to consider i.e. the future vison – see below.
For help and guidance on the software selection or wider digital transformation process please get in touch by emailing firstname.lastname@example.org.
Before you even start the process
There is a significant amount of work to be done even before you start a selection process, and this should not be under-estimated. Below are some summary thoughts based on our experience.
Understand what you are trying to achieve
I know this sounds the most obvious statement, but it is amazing how many organisations do not cover this thoroughly. One of the common mistakes is to think of processes in silo’s e.g. consolidation, planning etc. Ultimately, all these processes are inter-connected, and your plan should be one that considers all aspects of the Finance Team. Granted, your vision may be at a high level in some areas and more detailed in others. However, you should have a future vision for everything you want to achieve otherwise you can end up with silo ’d solutions that increase manual processes such as system maintenance and reconciliation.
Understand the ‘art-of-the-possible’
This goes together with the comment above. As the saying goes, ‘you don’t know what you don’t know’. It is therefore important to seek advice or assistance to understand the ‘art of the possible’ so that your future vision is complete and covers everything rather than just what you know.
Break the vision into definable projects
We often talk about trying not to ‘boil the ocean’ as this is a major reason that (finance transformation) projects fail. You need break delivery of your vision into smaller projects whist still retaining an overall view of what you are trying to achieve.
Consider the role and impact on staff
There are two aspects to this; one is how much they are involved in the vision itself, how much input they have and the role that you want them to play in shaping the future. The other is the potential impact on their roles and the need to re-train/re-skill the team. This will be difficult at this stage but it does need consideration.
Selling the vision and how it will be achieved
Once you have considered the above, you need to sell the vision to the CEO and the board to get their buy-in. This is critical as they will ultimately sign-off on expenditure and, more importantly, will support and champion the project. At this moment in time you may not be able to accurately predict cost, so you need to sell the benefits to the organisation.
Accept that there is no perfect solution
The final point is to accept at this stage that you will not find the perfect solution for your organisation – it simply does not exist. You will have to compromise, the trick being to understand and identify where compromise is acceptable and where it is not.
Part 2 – key considerations for the process itself
In Part 2 of this article, to be released next week, we look at the key considerations for the process itself and how Generation CFO can help you.
Written by Mark Cracknell, Head of Research, Generation CFO. For more information on Generation CFO services, we recommend contacting us here.