A finance team preparing to embark on an automation journey is almost sure to lose its way without a good roadmap, which starts with a clearly-defined destination, according to Gartner analyst Nisha Bhandare.
When advising clients on how to achieve finance tech results, Bhandare likes to use the analogy of a family road trip.
“The starting point is not: am I going to take a bus or a plane?” she said in an interview. “You start with: what’s our destination?”
As with road trips, the most logical place for CFOs and their teams to begin a tech project is in a discussion about the ultimate goal, whether that’s automating the accounts payable process or improving cash forecasting, according to Bhandare, a vice president - analyst in Gartner’s finance practice. Yet, some teams immediately think about pursuing costly new tech investments that are not tied to strategic objectives, she said.
According to a Gartner report released last month, 92% of CFOs responding to a 2022 senior business executive survey indicated they were planning to increase their technology spending, up from 70% in the prior year.
Though tech investments by finance teams are rising, data shows that only 30% of these projects succeed, Gartner noted. The statistic highlights the importance of designing a technology roadmap before getting started, said Bhandare, who joined Gartner in 2019, according to her LinkedIn profile. Prior to that, she served various finance roles at GE Power & Water and GE HealthCare.
A roadmap is intended to be a high-level plan, typically covering a period of about three to five years, Bhandare said. It highlights all of the tech initiatives the finance department plans to execute within that time frame, laid out in sequence.
“A good roadmap should align with your business outcomes and strategy,” she said. “It should not just be a list of technology projects.”
Putting the road map together can involve weeks- or sometimes months-long discussions between the CFO and other senior members of the finance team in partnership with the CIO, Bhandare said.
She described a four-step roadmap development process:
Know where you’re going. Formulate a vision that will guide the overall project and serve as its “North Star.” The CFO plays a particularly important role in helping the team think through what finance objectives need to be achieved.
Know your starting place. Conduct a “current state” assessment of the organization’s technological maturity. A finance team that is still performing cash forecasting manually using Microsoft Excel spreadsheets is operating below industry standards, according to Bhandare.
Choose the best tools. Decide which suite of technologies can help the organization reach its desired destination. This can include tools the finance team is already using in addition to any new ones that may need to be purchased.
Set a sequenced course of actions. Decide in what order the various aspects of the plan will be executed, based on levels of priority. “Prioritization is important because, at the end of the day, we can’t do everything, especially in this economy,” Bhandare said. “You need a framework so that your organization is not just going around implementing things with no control of your spend.”