Finance teams look to gain better control in 2023
by John Stokdyk – Editor at Large, AccountingWEB
After a couple of tough years, UK finance managers are looking for improvements that will help them respond to the challenges of 2023, according to Unit4. But the stats show they are lagging behind their international peers.
Finance systems and their users came under greater stress during the pandemic, when senior managers discovered they lacked up-to-date information to adjust to cash shortfalls and falling demand. Nine out of 10 respondents to Unit4’s international 2022 Business Future Index survey said their financial management processes lacked the speed and agility required to respond to increasing economic uncertainty.
Outdated systems had a particularly acute impact on forecasting: 89% of those involved in forecasting faced challenges in this area and were looking to make improvements to allow more collaborative approaches (53%), scenario planning (52%) and access to more timely data (47%).
Having overcome the traditional inertia to make investments in finance system, over half (52%) of respondents said they planned to invest more in technology. The 2022 survey figures showed significant increases in the top areas of finance process investment compared to the previous year (2021 figures in brackets):
- Cloud migration – 84% (44%)
- Data management tools – 85% (45%)
- Real-time reporting tools – 82% (40%)
- Workflow automation – 81% (37%)
- AI/machine learning – 74% (32%).
During the pandemic, a majority of survey respondents moved to cloud software and self-service online tools to support remote working. During the past year, 45% of respondents said they had followed up with internal tools to improve productivity and employee experience. These tools help ensure people working remotely are “just as productive and engaged as they would be in an office environment” and should be, the study explained.
Companies that invested in these areas were more likely to have seen improvements in business performance: 25% of organisations that did make workflow automation investments reported being ahead of their 2021 targets, compared to 13% among those that did not invest.
The people factor
With 39% of respondents reporting that they had lost staff to rivals offering more flexibility during the past year, attracting and retaining talent was the top priority for 62% of survey respondents (64% in the UK).
On that score, technology investment also made a positive contribution: 82% of those who invested in workflow, real-time reporting and other initiatives said their staff were more collaborative; 84% said they were more productive; and 86% reported better work/life balance, according to Unit4.
These kinds of investment saw an increase in organisational resilience among 67% of respondent companies in 2022, compared to 63% the year before.
UK lagging behind
The Unit4 2022 Business Future Index was based on interviews with 3,450 managers in 12 regions during May and June 2022, including 400 from the UK, 1,200 from North Amercia and 1,250 from the rest of Europe.
While the reported figures identified strong correlations for the impact of technology investment on both productivity and team collaboration, the UK came last in the league table for adopting these tools, with 39% reporting activity in this area compared to the global average of 45%. Denmark topped the table with 58%. UK adoption rates for cybersecurity (21%) and AI (22%) were the lowest among the nations surveyed.
The UK also lagged behind on financial performance, with the fewest respondents (41%) reporting that their firm’s performance was ahead of target.
While the rest of the world struggled with Covid-19, inflation and uncertainty, the UK carried the additional burden of a labour and skills shortage resulting from a combination of Brexit and the NHS crisis, according to London School of Economics professor Ricardo Reiss.
Currently there are more than 1m unfilled vacancies for skilled workers, but investment levels in vocational training and technology transformation are also lagging behind international averages, posing further productivity challenges that are likely to slow the country’s economic recovery in the year ahead.
Introducing the report, Unit4 CEO Mike Ettling commented that CFOs, their teams and their systems play a critical role in helping their firms respond to uncertain economic and social conditions. “Now, organisations need to move beyond the emergency response phase to more holistic IT strategies, which will require additional adoption of technology to improve processes and, ultimately, benefit all employees and customers,” he said.
