by Andrew Hicks, Chief Financial Officer
Our latest Annual Trends Survey Report was released at the end of 2019, with over 1,000 UK business professionals having their say on key topics affecting British businesses. We explored a number of key challenges that organisations are facing today, which include IT spending, legacy systems, cyber security, leadership and digital skills – not to mention the distraction of Brexit.
In recent years, Finance teams within the public sector have been held back due to decreased IT spending and the prevalence of legacy systems – which has been evidenced in the results of our survey. Both of these issues hamper finance professionals, at a time when they are being asked to extend their areas of responsibility and undertake increasing data analysis to advise their organisation on potential growth plans and strategy.
The emergence of new and innovative technologies can help empower the modern day finance team to drive business objectives for the future. Our Trends Survey Report reveals the attitudes of finance professionals in the public sector towards these new technologies, and highlights the trends they can expect to see within their finance function going forwards.
Below, we discuss three key stats to come out of the survey which are important for Finance teams within the public sector:
“36 per cent have IT software that gives them business intelligence to make the right decisions”
Finance teams need intelligent data analysis technology to be able to report accurately on key performance indicators (KPIs) within their business. This stat shows the lack of confidence that many public sector Finance teams have in their current system, and a growing need for the introduction of business intelligence solutions. Only one in three respondents felt they had been provided with the right analysis software. These tools are vital if finance professionals are going to contribute to a wider review of the business as a holistic whole and gain greater insight for successful decision-making.
“66 per cent see cost as the biggest barrier to modernising their systems”
Modernising legacy systems is seen as a costly task by the majority of public sector Finance teams, who are currently hindered by large budget cuts. These cuts are across all public sector organisations, for example, Newcastle City Council who have confirmed £20m in cuts and job losses. It is vital that the public sector are making informed decisions about the future of their existing technology systems in the midst of economic uncertainty and reduced funding.
Senior finance professionals need to understand new technologies to appreciate what they are truly investing in, what these innovations can do for their organisation – and the implications, including cost, of doing nothing. If a leader lacks technology knowledge they may let the cost of upgrading become an issue which will negatively affect their organisation in the long term. As Mark Krajewski, CIO at PRS for Music says: “Cost is a mind-set. Businesses need to consider the ‘cost of doing business’ – thus evaluating the cost of modernising versus the cost of doing nothing”.
“47 per cent see technology as their biggest spending priority in the next 12 months”
A key question in our Trends Survey asks whether technology is the most important spending priority over the next 12 months. Just under half of the participants think their organisation needs to prioritise this spend – down by five per cent from last year. Perhaps some organisations have already started to invest funds in modern technologies. It is reassuring to see that nearly half of respondents agree that technology should be a spending priority in 2020 – despite budgetary restraints there is a keen appreciation of the impact innovative software solutions and digital transformation can have on an organisation. Forward thinking CFOs are seeing technology as an investment rather than a cost, and are educating other departments within the organisation on the benefits.
The role of the finance department is evolving, becoming more operational and future-focused, helping organisations to meet strategic goals. The finance professionals responding to our survey, who are increasingly dealing with more than just financial data and reporting, are keen to look to new advances to help improve their performance. They want to see investment in technology so they can focus on value-add activities and ensure their organisation isn’t left behind. The results of our Trends Survey Report are encouraging, but show some organisations still have some way to go to deliver the technology their finance professionals need.
For further information on the changing role of the CFO, please read our blog “The Top 5 Traits of The Digital CFO”.