New Study Reveals Key Attributes of High-Performing Finance Teams
- 29.03.2018 08:11 am
FinancialForce, the leading cloud ERP vendor on the Salesforce Platform, published its State of Finance report today. The report, based on insights derived from 1,000 finance and accounting professionals across industries and company sizes, reveals that finance teams that become business partners and embrace next-gen technologies — cloud, integrated platforms, mobile, AI — are best positioned for success; those that don’t adapt leave their businesses vulnerable to competition. The report is produced in partnership with third-party market research firm Lab42.
The report found finance teams are focused on more than just accounting today, and have evolved to become a key player supporting business growth. Currently, a supermajority of finance leaders (85.6 percent) see their teams as having an important role in helping their organizations avoid disruption in the new services economy, and nearly all (93.1 percent) say finance plays an important role in giving the business a competitive edge.
As finance departments evolve, so too must the ways they generate revenue and measure success. Revenue Recognition guidelines have placed a heightened value on software, and a majority of business leaders approaching full compliance (85.1 percent) agree that software will factor heavily in helping them cross the compliance finish line. Nine, of 10, businesses with high-performing finance teams (89.8 percent) generate revenue from services. The importance of services is expected to grow significantly; in fact, the majority of respondents (57.3 percent) report that services will be more important one year from now than they are today.
In today’s business landscape, flexibility and an embrace of innovative technologies separate modern business leaders from the pack. Finance leaders overwhelmingly agree (88 percent) that the agility to change or add business models increases the chance of ongoing success. Three in four (75 percent) respondents believe it’s important to have access to their financial systems from mobile devices, while 80 percent say it’s important to have access from the cloud—signaling an accelerating demise for older, on-premise systems. Finance professionals who haven’t migrated to cloud-based systems must upgrade and innovate quickly to remain competitive and be able to provide real-time strategic insights to improve revenue.
“The services economy is expanding at an unprecedented pace and challenging businesses across the globe to redefine strategies and adapt to changing business models,” said Gordy Brooks, CFO at FinancialForce. “Companies who quickly embrace the opportunities provided by this new market can have a better chance to increase revenue opportunities and business success.”
“Businesses with integrated systems and data sources are able to collaborate more quickly and efficiently, accelerating business productivity,” Brooks continued. “With the proliferation of mobile devices, cloud technology, and real-time information, financial departments are no longer the revenue recorders; they’re now the drivers.”
According to the report, financial executives believe:
Cloud and mobile are paramount
More than two-thirds (75 percent) of respondents believe it’s important to have access to their financial systems from mobile devices.
80 percent say it’s important to have access from the cloud, signaling a potential end for older, on-prem systems. Finance professionals who haven’t migrated to cloud-based systems must upgrade and innovate quickly.
Business flexibility reigns supreme
The overwhelming majority of respondents (88.0 percent) said having the flexibility to change or add business models (e.g. new product, new service, or new revenue stream) helps increase the chance of future business success.
Businesses must be able to act quickly and adapt to new technology and regulatory changes to be competitive and successful.
High-performing finance teams embrace AI
Two-thirds (63.1 percent) of respondents agreed that AI will transform the way finance teams work over the next two years, although there’s slight uncertainty (58.6 percent) around how AI will transform their own organizations.
Nearly half of respondents (45.9 percent) say they are already using AI, while more than a third (38.0 percent) have defined plans to expand their use of AI over the next two years.
The vast majority of those that do use AI (70.3 percent) are seeing equivalent or greater ROI from their investment in the technology.
New revenue recognition rules offer an opportunity to update revenue management tools
A majority of businesses approaching full Rev Rec compliance (85.1 percent) agree that software will play an important role in reaching full compliance.
75.8 percent of respondents reported that they are not “nearly” or “fully” Rev Rec compliant, suggesting the Rev Rec project has been a larger task than expected.
Nearly half of respondents (48.9 percent) report their sales departments as being involved in their revenue recognition projects, and between 20 and 40 percent cited additional departments as being involved.