Digital Transformation » Systems & Software » From spreadsheet-centric to platform-first: Why it’s time for finance to modernise its approach

After the turbulence of the past 18 months, CFOs and finance directors (FDs) are demanding a more structured and robust approach to managing their finances. They’re faced with fast-changing market conditions, a much greater level of scrutiny from investors and stakeholders, and a hybrid workforce that continues to evolve. The old ways of budgeting are simply no longer fit-for-purpose amidst this new volatile environment. Agility is everything, which means adynamic rather than static planning – with real-time data powering modern planning platforms.

Ninety-three percent of senior finance leaders told Gartner last year that their vision for the function in 2025 featured on-demand data and “digital by default”. There’s still likely to be a role for spreadsheets in this future world of finance, but one that is much more limited than it is today.

The problem with spreadsheets

There’s nothing intrinsically wrong with spreadsheets. After all, there’s a reason the software has been with us for decades. The problem is when the software is pushed beyond its single-user limitations. Spreadsheets are highly limited as “quasi-databases” because the information contained within will not necessarily be accurate and up-to-date. In fact, it may never have been accurate, as human error has a way of creeping into data entry. Spreadsheet errors are now the stuff of legend—causing billions in losses and countless red-faced finance teams over the years.

Spreadsheets are also a poor fit for current working practices. UK employers predict that around a quarter (23 percent) of staff will work from home in two years’ time, with a further 41 percent following a hybrid working model. That makes syncing, sharing and collaborating via spreadsheets even more challenging. We see that managing multiple versions of spreadsheets hugely impacts the time which finance team members may otherwise use more productively on high value tasks.

In short, finance teams are constrained by legacy ways of working and static planning processes. The world is moving too fast today to persist with the old “plan, execute, plan again” model. CFOs need something altogether more agile and collaborative.

No looking back

There’s already a huge demand for going digital in the finance function. Global IT spending is set to grow by over 6.2 percent this year to reach in excess of $3.9trn as CFOs accelerate pre-pandemic digital transformation plans “by at least five years” to survive post-COVID, according to Gartner. Separate research by McKinsey reveals that 43 percent of CFOs are keen to streamline budgeting to become more agile in how they react to events. A further two-thirds (65 precent) predict they will use more rolling forecasts going forward.

They have good reason to digitalise. The best-performing 10 percent of “digitised incumbents” earn as much as 80 percent of the digital revenues generated in their respective industries, according to another McKinsey study. Yet at the same time, at least 30 percent of IT budget is usually wasted. Given the large sums being spent on digital, CFOs must ensure it’s being directed to the right areas.

Why digital works

So how can agile, digital planning tools help today’s CFOs? Firstly, in helping to determine how initiatives launched during the pandemic impacted corporate performance, and whether assumptions they made during that time were correct or not. CFOs can then use data-driven tools to stress-test future plans.

Financial leaders can also use intelligent planning tools to support zero-based budgeting – now back in fashion after the stresses of the pandemic forced many organisations to take funding from previously ring-fenced areas. A comprehensive spending review along these lines could fundamentally reimagine how the business looks. However, nothing’s set in stone in the new post-pandemic era. CFOs must continue to be more flexible about budgeting and re-forecasting, which requires real-time visibility into all areas of the business, so they can react with agility to evolving priorities.

It’s important that finance teams aren’t driven to burnout by the demands of a more proactive function. Once again, intuitive digital tools that feature a high degree of automation can help to lift the strain of repetitive tasks from these individuals. CFOs can also do their bit by ensuring high priority areas have enough experts assigned to them, and that they check in regularly to check how teams are doing. This is no time to be losing talent because they’re overworked and ill-equipped.

Finally, the visibility digital tools deliver can help CFOs get buy-in across the business for these new, more fluid planning processes. It’s all about replacing backward-looking business reviews and static planning with rapid decision-making, transparency and continuous planning. CFOs and FDs are on the front lines in the new post-pandemic business environment. To give themselves the best chance of success, they first need the right team, and the right tools.


To find out more about the value of platform planning and the best ways to implement new technology, watch the on-demand webinar ‘Plan better to succeed faster- the importance of planning, budgeting and reporting platforms’ here.