Business leaders are constantly bombarded with new information technology solutions, including automation, Big Data analytics, and artificial intelligence. Experts expect that digitalization will fundamentally change, if not disrupt, most businesses. Many companies, however, can’t keep investing in new IT without some explicit benefits. What’s the right technology path for finance and accounting (F&A) functions? IMA® (Institute of Management Accountants), with help from Robert Half, conducted a survey of U.S. senior finance professionals in May 2018 to find out how the digital age is transforming organizations.
Of the 115 survey respondents, 38% indicated a high level of digital transformation in their organizations, with another 38% noting some change, and the remaining 24% indicating little to no impact. This transformation is occurring at companies of all sizes—although, as might be expected, the greatest amount of change has taken place at larger organizations.
This transformation is directly impacting the F&A function, with 78% of respondents noting that financial information is among the most impacted. Operational information is also being greatly impacted (reported by 73% of respondents), followed by information regarding costing (50%), strategy (31%), and taxes (32%). Very small and very large organizations were most likely to focus on improving operational information, while mid-market companies appear to focus more on obtaining better financial information (see Figure 1).
The majority of companies are reaping substantial benefits from adopting new technologies. Fifty-five percent of respondents report high to very high added value from the adoption of technology, with an additional 34% reporting some value-add. While companies of all sizes are achieving benefits, larger companies are again reporting the greatest gains (see Figure 2).
Where is this added value from adopting new technologies coming from? The most frequently mentioned benefits were:
- Achieving greater efficiencies (78%),
- Achieving cost savings (39%),
- Freeing F&A staff to spend more time on higher value-added work (85%),
- Enabling greater insights for decision making (54%), and
- Supporting new strategic initiatives (41%).
Most F&A functions have started to adapt to the new technological environment, but they still have a ways to go. When asked how well their F&A function is prepared for upcoming technological change:
- 8% felt they are well prepared,
- 65% felt they are somewhat prepared,
- 23% felt they are not very prepared, and
- 4% felt they are not prepared at all.
Previous IMA research has shown that the greatest challenge companies have with moving forward regarding new technologies is having staff with the necessary skills. The technology skill most in demand in the next three to five years is data analytics (both predictive and prescriptive), cited by 74% of respondents. This was followed by process automation (52%), data mining and extraction (41%), statistical modeling and data analysis (41%), and data governance (security, design, life cycle, and storage; 39%).
The results of this survey clearly show that companies of all sizes are implementing new technology in a variety of areas and achieving benefits from doing so. Where is your organization on the path to technological transformation?