Creating new capability and using the best technology is high on the agenda for many organisations, but there are some critical challenges you need to address before you start your journey.

This year has proved the strength of technology in finance. It has helped us survive and continue to operate, communicate, collaborate and plan our way to recovery. Those who were digital doubters are unlikely to be now.

A recent Raconteur publication on digital transformation provides some excellent insight into the impact of the pandemic. It includes advice on delivering the promise and lessons learned from previous projects by industry experts.

In a survey included in the publication, 32% of business decision-makers expect their companies’ software spend to increase. However, before you go out and invest in technology, here are a few practical things to consider.

Single platform or best-of-breed?

This is a debate that rumbles on. On one side of the argument is a ‘single platform’, delivering everything a finance team requires in one solution. The other, a ‘best-of-breed’ approach, selecting specialised solutions for each particular problem.

There are pros and cons to both. With a single platform, you can easily share data and metadata, using a single interface. The downside is that capabilities in a particular area may be inferior to a best-of-breed solution that focuses on it. An excellent example of this is expense management; a solution that is strong on process and control that may struggle with the flexibility a business needs, particularly during a crisis.

The advantage of a best-of-breed approach is that you invest in a solution that is functionally rich and likely to be at the cutting edge. However, with multiple solutions, some integration will be required. Users may have to interact with various interfaces. Strategic alliances are being formed between vendors to mitigate these weaknesses, although they may struggle to improve upon a single platform user experience.

In terms of cost, a single platform approach is likely to be more costly, and time-to-value may be longer. Ultimately, it is a higher risk strategy. A best-of-breed solution can achieve quicker wins, a faster ROI and is lower risk. See my previous article on the modern tech stack and how you can use it to deliver a low cost, low-risk transformation.

Decide which approach to take early in the planning phase. It will define your technology review and investment strategy.

For more articles on digital transformation, we recommend these.

Who manages the tool?

Aim to use solutions that the finance team manages. Reducing the reliance on the IT team can be beneficial to all, freeing up IT to concentrate on other vital systems and allowing finance to be more self-sufficient. For example, a cloud-based expenses management system with a local support team.

However, there are certain considerations. There is a tendency to under-estimate what is needed to manage software successfully, for example. Do you have the resource available to take this responsibility? Do you have the expertise and skills within the team? What support will you require from IT?

At the planning stage for transformation, you can take two approaches. You could start with the limitations that are in place, perhaps headcount or skillset, and use this as selection criteria for the technology. I would argue this approach does not embrace the principles of transformation, but it may be the only way pragmatic way forward for some.

The other approach is to look for the solution that supports your transformation vision and digitally upskill to manage solutions within the finance team. This is where softer skills, such as persuasion and influencing, are necessary.

How is the tech bought and deployed?

Organisations with SaaS or cloud deployments of solutions adapted quicker to remote working and with less disruption to productivity. The acceleration towards cloud deployments is only likely to accelerate as a result of the pandemic. Our partner Soldo.com is one example of a SaaS company.

It makes sense to plan for the finance team to work remotely in your tech strategy. You can achieve this in several ways, not only through a proper SaaS/Cloud solution. You can achieve the same result by hosting an on-premise solution on the cloud (e.g. through AWS).

There are issues to consider in the SaaS/cloud and on-premise debate. Licencing mechanism, the total cost of ownership, continuous development, free upgrades etcetera. Decide early on what are your critical criteria as this will impact the list of vendors that meet your requirements.

A good mix is required.

When discussing technology, we always reiterate the fact that tech alone will not transform your team. People, process, technology and data all have a critical part to play.

This article is co-authored by Chris Argent founder of Generation CFO and Soldo. Soldo is a spend management platform that helps you Escape the chaos of agonising admin, painful processes and blinkered visibility.