We shared a few insights about the state of finance according to SAP customers in this past blog post. We’re back again with new insights on how to improve the relationships between finance and IT professionals. ASUG executed a second finance study in 2018 to look at technological trends within the finance department. This study took an even deeper dive into what’s happening with SAP S/4HANA Finance.
Here are seven key insights based on what we heard from the finance professionals within the SAP community:
Insight 1: Execution (and not innovation) still makes up the lion’s share of the work for those in (or supporting) finance. Among these professionals, 69 percent of their jobs are spent executing on current strategies, while the other 31 percent of time is spent planning for the future. Interestingly, these numbers are similar to what we saw among our entire ASUG community when we asked a similar question in our 2018 State of the Community study, so finance is a good baseline for ASUG members to consider when it comes to innovation.
Insight 2: Finance processes still demand heavy manual work—and this could be holding back innovation. When describing their key financial processes, 74 percent of those in or supporting finance say their current day-to-day work requires partial manual intervention, heavy manual intervention, or fully manual efforts. When asked about the most significant challenges facing financial processes, the top two responses are “too manual/time-consuming” (51 percent) and “moving data across too many systems” (46 percent), or what is known in the industry as “swivel-chair work.” Bringing in technologies and processes that can remove some of these manual tasks have the potential to increase accuracy and speed, while opening up time for finance professionals to focus on more fulfilling and valuable work to the organization.
Insight 3: Emerging technology is more of a long-term win than a short-term influencer. Given the choice between emerging technologies and updating core software, 77 percent of respondents say updating core software will have a greater short-term impact on finance processes. But the two options are evenly split when it comes to long-term impact. The “innovators” (those who spend more time planning for the future than executing current strategies) who participated in our study identified emerging technology as an important way to remain competitive for the long term.
Insight 4: Finance and IT do not agree on the role that the finance department plays in the purchase/implementation processes. Most in IT roles feel that the finance department is (or ought to be) more involved in purchase decisions and less involved in implementation processes. Those in finance roles believe the opposite. It’s clear that more inter-departmental conversations and defined decision-making roles for both parties will help align all influencers.
Insight 5: The most important opportunity to capitalize on while implementing SAP S/4HANA Finance is to optimize existing business processes. Reducing total cost of ownership (TCO) and staying current with the latest releases are less of a priority, indicating that users are currently more focused on strategy than appearances or expenditures. Yet this is truer of finance professionals than IT workers, who are significantly more focused on TCO. This suggests some ideological differences between the two departments that could make it difficult for an organization to prioritize their opportunities at a holistic/strategic level prior to an SAP S/4HANA implementation. It’s important to discuss these ahead of any implementation plans to make sure enough advance work is done ahead of the implementation to avoid bringing over inefficient processes that will slow down your new system.
Insight 6: A consistent environment across workloads is important to finance teams. More than half of users (53 percent) feel that it is extremely or very important to keep finance workloads in the same environment as other workloads. The level of importance also increases if the number of SAP instances across the company increases. Those running more instances may find that keeping workloads in the same environment allows for easier integrations and more efficiencies.
The importance of consistency also increases significantly the closer a company is to a go-live date for SAP S/4HANA Finance. Technical details become a much bigger focus as an implementation becomes real to customers, while those who are bit farther away from their implementation going live are more likely to take a big-picture approach.
Insight 7: Concerns about an SAP S/4HANA Finance transition vary depending on the implementation timeline. Cost of implementation (90 percent) is, by far, the biggest potential challenge for those farther away (three or more years) from migrating to SAP S/4HANA Finance. For those planning to transition in the next year, however, lack of skilled support staff (50 percent) and loss of customizations (41 percent) are significantly more important. Building a business case is also a concern for those one or more years out from their implementation.
If you are part of the finance and IT communities, you can start to address some of these issues by starting projects to remove the inefficient “swivel-chair work” that finance teams are still doing. It’s also a good time to make sure your teams are aligned strategically and in terms of the priorities associated with a major implementation like moving to SAP S/4HANA. You can learn how other professionals are tackling these same challenges by joining us for one of our events or by participating in ASUG’s special interest group (SIG) for the financial community.
Need more information on SAP S/4HANA Finance? Make time in your calendar to attend the SAP-Centric Financials event in Dallas in March 2019.