Data-driven agility key to survival

The finance function of today is about much more than just balance sheets. Technology available to finance leaders allows for real-time data about all incomings and out-goings, enabling businesses to become agile.

This puts the finance function in a position to lead the business with informed and controlled decision making when reacting to change and growing the business. However, legacy technology, particularly in banking, is holding finance teams back.

“Finance is the custodian of the fuel that powers the engine of business,” Carlo Gualandri, CEO of the spend management company, Soldo, said speaking during a webinar with Financial Director.

“Everything a business does is powered by money, so you must have proper control but also availability when it is needed to grow.”

Agility is of paramount importance when leading a business. For example, being able to react quickly and intelligently to external factors like the Covid-19 virus, will help a business navigate the challenges they will face in the coming months.

Robin Owen, Senior Finance Director of global business services and global procurement at pharmaceutical company AstraZeneca, said that agility is now more important than ever.

“The pace of change, the need to react, the need to gain competitive advantage all relies on the ability to be agile,” he said. “Finance functions are thought of perhaps as some of the least agile functions in a business, but if we’re to enable success in the business and growth in the business, then we have to be agile.”

Owen said that there’s more to being agile than just reacting, however. “Agility covers lots of different bases – agile thinking of course – but agile in terms of rolling out new pieces of insight, or new systems, new processes. It’s not just about thinking quickly and acting quickly, but it’s about moving fast in ways that impact broad spectrums of the business.”

Gualandri argues that a big factor in holding businesses back from being agile is not just outdated technology, but legacy banking systems.

To have a full understanding of the business’s financial activities, the finance function must have access to real-time banking data (or as close to real time as possible) which is currently unavailable with most banks.

A lot of work is required to translate the logic of a business into the requirements of the banking system, said Gualandri. “I think this is a more fundamental inefficiency than the technology legacy problem. You can translate one with the other only through people doing a lot of work, and that’s a big block to the agility of a business.”

Ideally, finance teams would see finance data in real-time to see their business’ finances at any given time, as opposed to just at the end of a month. This allows the business to react to damaging factors while taking advantage of opportunities.

But what is the viability of real time data, and are finance teams going to be in a position where this is something they will be able to utilise soon? Owen believes so.

“Real time accuracy of your transactions and data summed up in a single set of numbers would remove that requirement to do month end, and I think that is entirely possible in the medium-term,” he said.

However, he also said that while having real-time data available is a benefit to business, the ability to utilise it depends on an organisation’s agility. “The power of real time data depends on your organisation and how quickly it can or needs to react to new data.”

This comes down to the mindset of the organisation. If an organisation works hard to be agile, and has agile structures and processes in place, then real time data would be a powerful tool.

To hear the full free on-demand Webinar and conversation between Gualandri and Owen, covering agility, data, open banking and more, click here.

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