Identifying Process Challenges in Finance IT

Our CFO workshop found a range of common issues.

Finance organizations requiring IT support of their business processes often enter into projects without sufficient preparation. Common mistakes include failures to identify actual requirements and to understand existing practices before beginning. Also affecting projects are cultural considerations such as eliciting buy-in from all concerned, managing IT budgets and getting finance and IT on the same page. Ventana Research believes organizations need discipline and methodology to execute these projects successfully.

At the end of September, Ventana Research conducted a workshop for senior finance executives as part of CFO Magazine’s Strategy Execution Conference in San Francisco. The workshop, titled “How to Use IT to Support Performance Management,” focused on the importance of integrating business and information technology requirements. It also explored finance department activities where the proper application of IT would have the greatest potential for creating business value: budgeting and planning, closing, reporting, compliance and profitability management. From an implementation perspective, it covered “Bridging to IT,” the methodology Ventana Research has developed to ensure companies create the right set of requirements, structure projects properly to achieve objectives and, where applicable, select the software best suited to their needs.

When we asked workshop participants what major process challenges they face, they responded with a surprisingly broad range of issues. Responses fell into four major categories: high-level business issues, tactical business concerns, priorities and funding, and IT-related problems.

Aligning information availability with strategic planning requirements was a high-level issue cited by one of our breakout groups. This has been a long-standing challenge. Our research has found that a majority of companies get timely data about standard financial and operational results. Yet even after spending billions on business intelligence systems, companies either do not collect all the data they need for more long-term decision-making or do not understand what data they require for strategic planning.

Using undefined processes was another issue that came up. Too often, companies rely on tacit knowledge (“Everyone knows you have to …”) to guide process execution. Of course, not “everyone knows” the same things; as a result, activities based on these assumptions rarely are performed consistently, and they often take longer and require more resources than they should. A third daunting challenge is considering politics and culture in designing or re-engineering processes and projects. A related issue mentioned in the breakout groups was eliciting buy-in. Executive sponsorship is always a good thing to have, but managers of business IT initiatives routinely fail to realize they also must sell the project internally to those who will be involved in or affected by it.

Our workshop participants reported they run into a number of tactical business problems as well. For one, organizations do not always have a process for developing a clear set of requirements for their finance IT projects, despite the fact that that clarity is critical to achieving success. Specifications may be too vague or the language one group uses may have subtle but important differences from another’s. As a result, the requirements may end up incomplete or may be an impractical wish list. At the other end of the process, participants identified post-implementation issues, such as user training and knowledge transfer from systems integrators or consultants to the in-house business owners, as important points to build into project planning.

Conflict over priorities and funding is routine. Many companies find themselves with more IT-enabled opportunities than money to fund them. Disillusionment with poorly managed projects has led finance to control IT spending more tightly and to demand ways to measure post-implementation returns. Governance boards are one common solution. Nonetheless, Ventana Research often finds inconsistent and poorly structured investment methodologies and assessment processes at work in large and midsize companies.

The IT-related issues the workshop participants mentioned most often included bringing finance and IT together from the start to improve the efficiency of the process, a point Ventana Research continues to stress as vital to maximizing return on investment. Integrating new systems with existing ones is a critical issue that must be addressed in the requirements-setting phase of the project. Failure to do so can yield less-than-optimal results, higher than necessary costs or outright failure. Participants also cited the difficulties caused by inaccurate or inconsistent data as well as the challenge of dealing with data that had an undefined context. For example, the designation “Sales” might mean gross or net, or it might mean contracted sales, not revenue recognized under generally accepted accounting principles. Ventana Research finds managing information, not just data, is a major challenge in Global 2000 companies.

Corporations face many challenges in managing the acquisition, implementation, use and maintenance of IT systems. Discussion among our workshop participants generated a long list. One conclusion is that, as is the case with any other capital asset, managing IT systems well requires expertise and experience. Ventana Research believes companies can benefit from using advisors to help them both explore and evaluate new business projects that have an IT component and achieve greater value from existing IT assets.

About Ventana Research
Ventana Research is the leading Performance Management research and advisory services firm. By providing expert insight and detailed guidance, Ventana Research helps clients operate their companies more efficiently and effectively. These business improvements are delivered through a top-down approach that connects people, process, information and technology. What makes Ventana Research different from other analyst firms is a focus on Performance Management for finance, operations and IT. This focus, plus research as a foundation and reach into a community of over two million corporate executives through extensive media partnerships, allows Ventana Research to deliver a high-value, low-risk method for achieving optimal business performance. To learn how Ventana Research Performance Management workshops, assessments and advisory services can impact your bottom line, visit

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