Growing Businesses Win When Finance Keeps Up with the Technology Curve

Finance leaders from small and midsize businesses have plenty of reasons to stay up at night – and a wave of changing trade policies, growing instability in individual countries, and pervasive attacks from ransomware are just the start. The last thing they need is to have internal systems get in the way.

Unfortunately, for 37% of companies with revenue below €1 billion, outdated technology is keeping finance leaders from achieving their business goals and addressing emerging financial concerns. This finding from the Oxford Economics study, How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” sponsored by SAP, echoes a growing concern over the missed opportunities from underestimating the potential of technology adoption.

There’s no single simple answer to explain why finance leaders are lagging behind in their digital investments. But the impact is clear: as they become increasingly involved in company-wide decision-making, finance leaders who aren’t supported by the right technology could single-handedly restrict the competitive agility and speed inherent in small and midsize businesses.

Undervaluing Technology Puts Business Growth at Risk

From predictive analytics and shared services to the Internet of Things and integrated systems, there is an incredible variety of technologies that provide real-time access to insight and enable highly automated processing and decision-making. Finance leaders can help drive the success of technology investments in areas such as security platforms, cloud applications, and ERPs.*

Unfortunately, not all small and midsize businesses have a clear view of which digital investments will deliver the capabilities and advantages they need to optimize working capital, improve efficiency, and drive strategic growth. Perhaps, for some companies, this confusion may emerge from a limited grasp of the vast potential of large volumes of data stored in their systems. Or it could be that they are overwhelmed by the thought of introducing more complexity or disrupting daily activities.

Whatever the reason, this fear can put future growth at risk if finance leaders ignore the digital tools that are important to top-performing businesses. I view the finance leader, who sits next to the CEO, as the co-pilot with the deep understanding and influence needed to drive and build the future strategic direction of the company. Without the tools to gain comprehensive insight easier and faster, decisions will eventually prove incomplete or, in many cases, inaccurate.

Setting the Right Foundation for Growth Should be on Every Finance Leader’s Radar

It may seem easier to leave technology decisions solely to the IT team, but that doesn’t mean that’s the right course of action. The competitive landscape is changing in a matter of days, not years. Business growth is happening overnight, not in months. Customers are evolving their behaviors in a matter of moments, not weeks. So why not get involved in building a foundation that can help your business anticipate, shift, and respond as quickly – or even faster – than everyone else?

The latest digital innovations – from advanced analytics, rolling forecasting, and Big Data to artificial intelligence and machine learning – are elevating the importance of running on a scalable ERP platform. Finance leaders can gain the 360-degree view they need to further strategic growth, pinpoint oncoming risks, and sense opportunities quickly by integrating real-time predictive analytics.

More important, finance leaders can set the stage for connected and automated business processes – ranging from order processing and production to financial close – to develop a level of efficiency and speed company-wide that can catch competitors by surprise. This approach not only lifts the finance role out of everyday support and manual reporting, but also deepens their authority in strategic planning and consultation for the enterprise.

Discover how finance leaders from small and midsize businesses are building a reputation for driving strategic growth. Read the Oxford Economics study “How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” sponsored by SAP.

Peter David is regional chief financial officer of Europe Middle East and Africa at SAP.

This story originally appeared on the Digitalist.

*“How Finance Leadership Pays Off: Small and Midsize Companies Can Boost Performance Through Finance,” Oxford Economics, sponsored by SAP, 2017.