PA’s Simon Tennant, a finance transformation specialist, is extensively quoted in an article in the Financial Times The Connected Business special report on IT & the Chief Financial Officer (CFO). The article looks at the importance of integrated IT systems in providing financial directors with an accurate view of their company’s financial situation, and why they are not being used as widely as they should.
Simon points out that financial directors are not embracing this technology partly because of a tendency to stick to their own “personal spreadsheet islands.” Simon also points out that these do not integrate easily with the “shiny new enterprise resource planning (ERP) systems” in use across companies.
Typically there are “multiple versions of the truth” because of this, with disagreement between a group’s financial departments about information such as spending on IT or the number of people on the payroll. Simon says: “Spreadsheets are extremely prone to errors, do not have an audit trail, and are massively difficult to keep synchronised.”
Another reason for a lack of consolidated systems in corporations is a cultural divide between the financial department and IT. Simon points out that IT and finance people have different perspectives: “IT tends to spend money buying equipment and employing people, whereas accounts teams want to justify expenditure and don’t buy much.
“For successful integration, you need a happy marriage between finance and IT, both in decision-making and implementation.”
Simon concludes that the main challenge is to wean financial directors from their fondness for personalised spreadsheets and that this is partly an age issue, relating mostly to people in their 50s: “Younger people will be more used to ERP systems such as SAP and Oracle, so this can only get better.”
You can read the article in full here.
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