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With all the time spent on transaction processing and having to contend with compliance and control workarounds, finance teams spend far too much time looking backwards, preventing them from partnering with the business to determine where to go next.

Yet while this notion is pretty much universally accepted, very few within our profession have fully realised this transformation. Why? It’s because legacy finance systems continue to stand in the way. They’ve stopped finance from mastering the elements of a true partnership: providing impactful business analytics, delivering clear plans and forecasts, and having the agility to adapt analyses, plans, and processes to business change.

 Let’s look at analytics first. Analytics that influence positive business outcomes stem from four traits that simply do not exist in legacy systems – a broad definition of the user, information relevance, simplicity, and availability on any device. Legacy ERP was designed in a command-and-control era, where information was delivered to a few who then communicated it to the masses. Today the audience for financial information is, quite literally, everyone.

This broad community is interested in analysis such as profitability, what-if-analysis, and cost model, but traditional ERP systems were built for IFRS/GAAP and regulatory output rather than delivery of contextual analysis. Finance teams have tried to tackle this lack of capability in their legacy ERP systems by looking for better reporting, achieved by bolting on aftermarket business intelligence or enterprise performance management reporting tools. But this approach hasn’t worked because the problem is not reporting – it’s the quality of the data and the ability to easily draw conclusions from analysis.

If the right data is not captured at the very beginning of the process at the transaction level, no reporting scheme will deliver relevant analysis. Modern systems such as Workday address this issue at the transaction level by capturing data-rich transactions so that relevant analytics can be delivered directly from the system without the cost, complexity, maintenance, and control issues of aftermarket solutions.

Having the right data is the first step; making it usable is the next. Because we can no longer expect that everyone using the system is a back-office system expert, analytics have to be easy to define and understand and simple to access. And because everyone is mobile, relevant analytics must be available anywhere at any time and on any device. Such tools must be designed from the beginning for delivery on mobile devices as standard, not as an optional and a chargeable extra.

The days of static plans that last a year or more are gone, and to support the evolving needs of the business, planning must be an ongoing activity. And in order to be effective, planning and forecasting needs to be combined with transactions, controls, reporting, and analytics in a single system that offers a single source of truth, a single set of data, a single security model, a single control framework, a single set of processes, and a single user experience. That’s why Workday has built planning and forecasting into the core system. Without this forward-looking approach, organisations run the risk of their plans becoming dated and redundant virtually as soon as they are produced.

That leads us to the third partnership attribute – agility. Legacy systems are inherently rigid, turning many otherwise very good finance departments into business prevention teams, because they’re unable to cause the change necessary to support new business initiatives. They need modern tools with the ability to change organisation structures, business processes, and even data models in minutes. Essentially, a finance system should be capable of converting a finance department into a change enablement partner to help the business rise to challenges and take advantage of opportunities, whatever they may be.

The journey to finance transformation isn’t easy, but it’s certainly doable. It requires an understanding of why previous efforts have failed, and reducing time spent on transaction processing. It also requires a rethink in terms of governance, compliance, and control, and how finance approaches this from a technology perspective. Finally, finance must become a more strategic business partner, by delivering insights from the right data, the ability to plan, and adapt to new opportunities as they arise. Only then can financial transformation take place.